Billing Patients Who Have Both Medicare and Medicaid

Patients eligible for both Medicare and Medicaid are among the most straightforward to bill and the easiest to get wrong, because the rule that governs them is one most billing staff have never been told.

The sequencing

Medicare pays first. Medicaid considers the remaining balance, subject to the state's rules and its own fee schedule. That part is intuitive.

The part that is not

For patients in the relevant categories, the provider generally may not bill the patient for Medicare cost-sharing — deductibles, coinsurance, copays. Even where Medicaid pays little or nothing toward that balance, because its rate is lower than what Medicare already paid, the patient is still protected.

This is the trap. The remittance shows a remaining balance, the system routes it to patient responsibility, and a statement goes out. The balance was never the patient's, and billing it is a prohibited practice rather than a billing error.

The controls

• Flag dual-eligible patients at registration, so the account never routes to patient responsibility by default.
• Bill Medicaid even when you expect no payment. The adjudication is what establishes the balance is not billable.
• Write off the remainder as a contractual obligation, and record it that way rather than as bad debt.
• Review your statements for dual-eligible accounts periodically. This error is systematic when it happens, not occasional.

The financial exposure is small per claim. The compliance exposure is not, and it compounds quietly because the patients least likely to dispute a bill are the ones this affects.