The Impact of Medicare Program

Paper Info
Page count 6
Word count 1664
Read time 7 min
Topic Health
Type Essay
Language 🇺🇸 US

The Federal government payer program for healthcare services allows a diverse population to cover the cost of medical care. Medicare is for people over 65 and younger people with certain disabilities (, n.d.-a). Various parts of the program cover hospital stays, outpatient care, preventive services, and the cost of prescription drugs. For physicians and hospitals, the program provides an opportunity to cover the costs of services provided to patients. Due to the fact that Medicare is based on regulatory aspects and federal laws, it has a significant impact on legal standards. The program also improves the reporting system in the health care system. It also improves patient access to care and integrates health information management into its functioning. Thus, Medicare has an impact on many aspects of the healthcare system.

Impact on Standards

Medicare, as any federal government payer program for healthcare services, requires hospitals and physicians to meet US healthcare standards. To be eligible for the program, the healthcare provider or provider must first prove their qualifications. An enrollment to Medicare for physicians has three steps that require obtaining an NPI, completing a form, and working with a Medicare Administrative Contractor (MAC) (Centers for Medicare & Medicaid Services, n.d.-b). For institutions, this process includes the same steps and additional payment of a fee, as well as interaction with the State Agency, which can be performed by a survey of the facility (Centers for Medicare & Medicaid Services, n.d.-c). For physicians and institutions, there are conditions of participation that must be met.

For healthcare providers, the rules are reflected in the application form that contains all information about the physician’s area of ​​practice and activities. In particular, when enrollment in Medicare, it is necessary to provide information about the current licensing in Section 2 (Centers for Medicare & Medicaid Services, n.d.-e). The document also contains information about what licensing a physician must have in accordance with federal laws. Section 3 requires to identify “any current or past revocation, suspension, or voluntary surrender of a medical license” (Centers for Medicare & Medicaid Services, n.d.-e, p. 11). For hospitals, Medicare requires the State Agency survey, which specifically takes into account the licensing of the facility (Centers for Medicare & Medicaid Services, 2012). In particular, the document emphasizes that in order to comply with the rules of the facility, it is necessary to comply with all regulatory requirements of the State law (Centers for Medicare & Medicaid Services, 2012). Additionally, Medicare standards imply that only licensed and trained professionals can provide high-quality medical care.

Thus, Medicare has a significant impact on adherence to quality care standards. To enroll in the program, both physicians and hospitals must participate in the process of presenting and verifying all applicable practice licenses. For medical institutions, a survey is also conducted, which in particular determines how well the hospital and its staff meet the requirements. The Medicare enrollment process allows healthcare providers to comply with all federal laws and regulations, as well as constantly monitor the relevance of their licenses.

Impact on Reimbursement

Medicare impacts reimbursement as it allows determining how much a physician or hospital charges for their services. In particular, program participants sign an agreement according to which the patient pays only 20% of the most medical services and outpatient therapy (, n.d.-d). Some providers choose to be non-participating as private insurance companies often offer higher reimbursement rates (Norris, 2020). These physicians provide only part of the services within Medicare. In this case, the provider can bill the patient only 15% more than the Medicare rates require. Healthcare providers who do not want to provide services under the program “may ‘opt out’ of Medicare” (, n.d.-b). In this case, all costs are paid by the patient in agreement with the physician or hospital. Thus, the participation of hospitals and physicians in Medicare allows not only to control standards of care but also to significantly reduce patient costs. Working with Medicare also makes it possible to maintain the cost of services of healthcare providers, keeping them at a lower level.

Clinical Quality Reporting Systems

Medicare greatly affects the quality of the reporting system as it provides reimbursement based on the quality of the care provided by the hospital or physician. Physicians participating in Medicare are eligible for Merit-Based Purchasing Systems (MIPS) (Quality Payment Program, n.d). Under this program, “eligible clinicians (ECs) may receive a payment bonus, a payment penalty or no payment adjustment” (AAPM&R, n.d). The activity and performance of the provider are assessed in four categories, after which he receives various payment bonuses, adjustments, or penalties. For hospitals, the Value-Based Purchasing Program (VBP) applies, under which healthcare providers receive payment adjustments under the Inpatient Prospective Payment System (IPPS) (Centers for Medicare & Medicaid Services, n.d.-d). The program measures the quality of care the hospital provides, not the number of patients. There are also four criteria for hospitals, which are aimed at assessing not only medical but also economic activities of facilities. Specifically, the VBP evaluates either how well a hospital is operating or how well it has improved its performance (Centers for Medicare & Medicaid Services, 2020). This system affects both the quality of care and the cost of services.

MIPS and VBP allow Medicare to monitor the quality of services offered by health care providers. In particular, this is possible through financial incentives or penalties, which largely shape the economic fortunes of both hospitals and physicians. It is also important that these systems simultaneously maximize the efficiency of the reporting system. This is due to the fact that health care providers report more accurate and detailed data for assessment in the systems.

Reimbursement for Healthcare Services

Within the framework of Inpatient Prospective Payment Systems (IPPS) and Resource-Based Relative Value Scale (RBRVS), Medicare pays for services to health care providers on a resource-spent basis. In particular, for IPPS, the calculation depends on the base payment, labor-related and nonlabor share (Centers for Medicare & Medicaid Services., n.d.-a). The claim filing process for IPPS is relevant only for services that were provided before billing, and the hospital must indicate all the required information about the services provided (Centers for Medicare & Medicaid Services, 2021). Only in this case the assignment will be received and accepted for the reimbursements; otherwise, all claims will be rejected. There is no allowable fee schedule under IPPS since the patient does not prepay for Part A services (Centers for Medicare & Medicaid Services., n.d.-a). Therefore, under the IPPS, the patient insurance cannot be balance-billed for the contractual write-off amount.

The RBRVS calculation principle is significantly different from IPPS and applies to physicians. Particularly is “calculated by multiplying the combined costs of a service times a conversion factor (a monetary amount determined by CMS) and adjusting for geographical differences in resource costs” (AMA, n.d). Claim filing, in this case, does not differ from the process adopted for hospitals. The physician must also provide all relevant information in order for the assignment to be received and accepted for the reimbursements. There is a physician fee schedule under the RBRVS, within which a regular conversion is taken into account, covering required resources for the provision of services, and geographic indices are calculated (Centers for Medicare & Medicaid Services, n.d.-f). For RBRVS, a contractual write-off applies, and the patient’s insurance may be balance-billed for the contractual write-off amount (ASHA, n.d). Thus, the processes for hospitals and physicians are similar enough but have a number of differences.

The claims process is different for non-Medicare members who did not sign the assignment. They are “permitted to decide on an individual claim basis whether or not to accept assignment or bill the patient on an unassigned basis” (ASHA, n.d). The allowable fee, in this case, is reduced by five percent compared to the participants. Within the framework of the system, a non-member can charge the patient only 115% of the allowable fee, which is paid out of pocket (ASHA, n.d). Thus, the impact of Medicare on non-participants is expressed in the establishment of a limiting charge.

Patient Access to Care

Medicare is increasing patient access to care, especially for low-income people. In particular, this is possible since the program provides stable funds for physicians and hospitals through reimbursement. Additionally, Medicare can significantly reduce patient care costs by paying for medical services. Medicare also improves the quality of care through its licensing process, which is also important for patient engagement. It is important that this program allows the poorest strata of the population to receive regular and high-quality assistance. Medicare also plays an important role in today’s pandemic by providing coverage for the cost of vaccinations for patients (, n.d.-c). Such a measure is of decisive importance not only for individual patients but for the health of the population as a whole.

HIM Role

Health Information Management (HIM) plays an integral role in Medicare since it is a data-intensive system. This feature is determined by the fact that the program is associated with many regulatory factors, as well as control over their implementation. Medicare Impacts the Role of the Health Information Professional, which participates in the development of tools for assessing the effectiveness of the program (AHIMA, n.d). Additionally, this specialist makes predictions about possible changes in the stroma of medical services based on data analysis. It is also important that this professional is involved in assessing the quantitative aspects of Medicare. Thus, this role supports all the basic functions of the program since Medicare is about assessing the quality and cost of medical services.


Medicare, as a federal program, allows the most vulnerable groups of the population to receive affordable and quality medical care. For physicians and hospitals, this means increased attention to regulatory requirements to receive reimbursement. However, Medicare ensures healthcare facilities and providers with stable funding. Moreover, it allows constantly maintaining a high level of quality of medical care. Integration of HIM is one of the key features of this program, based on data analysis and application to the healthcare setting.


AAPM&R. (n.d). Merit-Based Incentive Payment System (MIPS).

AHIMA. (n.d). Health Information is human information.

AMA. (n.d). RBRVS overview

ASHA.(n.d). Calculating Medicare fee schedule rates

Centers for Medicare & Medicaid Services. (n.d.-a). Acute Inpatient PPS

Centers for Medicare & Medicaid Services. (n.d.-b). Become a Medicare provider or supplier

Centers for Medicare & Medicaid Services. (n.d.-c). Become an institutional provider.

Centers for Medicare & Medicaid Services. (2020). Hospital Value-Based Purchasing

Centers for Medicare & Medicaid Services. (n.d.-d). Hospital Value-Based Purchasing Program. 

Centers for Medicare & Medicaid Services. (2012). Medicare and Medicaid programs; Reform of hospital and critical access hospital conditions of participation. Federal Register, 77(95), 29034-29076.

Centers for Medicare & Medicaid Services. (2021). Medicare claims processing manual: Chapter 3 – inpatient hospital billing. 

Centers for Medicare & Medicaid Services. (n.d.-e). Medicare enrollment application

Centers for Medicare & Medicaid Services. (n.d.-f). Physician fee schedule (n.d.-a). What’s Medicare? (n.d.-b). Lower costs with assignment. (n.d.-c). Medicare & coronavirus (n.d.-d). Part B costs.

Norris, L. (2020). How does a doctor’s participation in Medicare affect reimbursement? Medicare Resouces.

Quality Payment Program. (n.d). Participation options overview

Cite this paper


NerdyBro. (2022, August 14). The Impact of Medicare Program. Retrieved from


NerdyBro. (2022, August 14). The Impact of Medicare Program.

Work Cited

"The Impact of Medicare Program." NerdyBro, 14 Aug. 2022,


NerdyBro. (2022) 'The Impact of Medicare Program'. 14 August.


NerdyBro. 2022. "The Impact of Medicare Program." August 14, 2022.

1. NerdyBro. "The Impact of Medicare Program." August 14, 2022.


NerdyBro. "The Impact of Medicare Program." August 14, 2022.


NerdyBro. 2022. "The Impact of Medicare Program." August 14, 2022.

1. NerdyBro. "The Impact of Medicare Program." August 14, 2022.


NerdyBro. "The Impact of Medicare Program." August 14, 2022.