Medicare and Medicaid — How Government Programs impact Medical Billing

Government programs medicare and medicaid

While similar in name, these two government established forms of healthcare coverage differ greatly. As of July 2019, an estimated 60 million people were enrolled in Medicare, while over 75 million people were enrolled in Medicaid ( At AMPM, we understand that many patients seen by our doctors will be enrolled in these programs. Because the government has strict guidelines for these plans, specific handling is often required. This will have an impact on submitting claims, handling denials, and receiving remittances. 

Eligibility for Medicare and Medicaid

In the simplest terms, the U.S. Department of Health and Human Services defines Medicare as an insurance program, while Medicaid is an assistance program.

To be eligible for Medicare depends on primarily age — beneficiaries must be over 65. There are exceptions to this rule, such as having kidney failure, or receiving Social Security disability. Both of these exceptions need to meet strict criteria as well. That being said, Medicare is most well known as the insurance of choice for retired individuals who no longer have insurance through an employer. 

In contrast, eligibility for Medicaid hinges on low income.  A patient must meet various income requirements in order to be eligible for Medicaid. Again, there are some exceptions to this. For example, if a parent’s income disqualifies them from Medicaid they still may still be eligible for the Children’s Health Insurance Plan (CHIP).

Federal or State?

Another difference between the two plans comes down to their governing bodies. Medicare is a federal program. Its rules and regulations remain mostly consistent across the United States, with little intervention from state governments.

Conversely, while Medicaid is established as a federal program, it is administered by the individual states. This means that the qualifications, income thresholds, and scope of assistance may vary greatly from state to state. The federal government has set down certain Medicaid regulations that all states must follow. Nevertheless, states are allowed to tailor Medicaid to meet their needs.

Considerations when billing for Medicare and Medicaid

Medicaid is administrated at the state level.

As touched upon earlier, it is important for medical billers to have an understanding of the rules when billing to government programs. For instance, Medicare will deny a claim if the patient’s name is not exactly as it appears on the Medicare card. Often when a claim is denied, a special reconsideration process is required in order to receive reimbursement. In addition, the appeals process is multi-leveled, and must be followed precisely in order to achieve a favorable decision. Fortunately, because the program is so widely used and is run at a federal level, multiple online tools have been developed to assist with claims inquiry and corrections. With a full bank of knowledge, medical billing companies can easily master the art of billing to Medicare.

On the other hand, Medicaid often poses a greater challenge. Because Medicaid programs vary from state to state, a medical billing company must understand the rules and regulations of each state for which they service. Contacting a state’s Medicaid department to discuss denials can be complicated and time consuming in its own right. Therefore, it is always advisable to gather as much information about these state requirements as possible before submitting a claim.

Disclaimer: The materials contained on this website are provided for informational purposes only and do not constitute legal or other professional advice on any subject matter. Advanced Medical Practice Management does not accept any responsibility for any loss which may arise from reliance on information contained on this site.