Medicare Part B

The component of Medicare that covers outpatient medical services including physician visits, diagnostic tests, preventive care, and durable medical equipment.

Medicare Part B is the outpatient coverage component of the Medicare program. It is what pays for physician office visits, outpatient procedures, laboratory tests, imaging, physical therapy, mental health services, durable medical equipment, and preventive screenings. If you are an outpatient provider, Part B is where your Medicare revenue comes from. To bill Medicare Part B, you must be enrolled as a provider through PECOS using the CMS-855I (individual) or CMS-855B (group). Your enrollment determines your participation status: participating providers accept assignment on all claims, non-participating providers can choose to accept or decline assignment on each claim, and opt-out providers do not bill Medicare at all. The Medicare Part B fee schedule is based on the RBRVS system. Each CPT code has an assigned relative value unit that is multiplied by a geographic adjustment factor and a conversion factor to arrive at the allowed amount. The fee schedule is updated annually and published by CMS every November for the following January. Part B has a deductible that patients must meet annually before Medicare begins paying. After the deductible, Medicare pays 80% of the allowed amount and the patient is responsible for the remaining 20% coinsurance. Many patients have supplemental insurance (Medigap) that covers the coinsurance, which means you collect the full allowed amount between Medicare and the supplement. For credentialing, Medicare Part B enrollment is usually one of the first enrollments you pursue because of the large Medicare-eligible population. The enrollment process through PECOS is well-documented, and CMS provides detailed instructions. Processing times are typically 45 to 65 days for initial applications. One important rule: Medicare does not retroactively pay for services provided before your effective date, except for up to 30 days before the effective date in certain situations. This makes early enrollment essential. File your CMS-855 as soon as you have your state license and NPI, even if your practice start date is months away.