When does Medicare pay less than 80% of approved amount

[GFB]

Here is an example:
Service Approved- yes
Amount facility charged- $6,283
Medicare approved amount- $6,283
Amount Medicare Paid- $615
Maximum You may be billed- $157
Notes: B,C,D

B: amount Medicare paid the provider is $615
C: we have sent your claim to your Medigap Insurer
D: After your deductible and coinsurance were applied, the amount Medicare paid was reduced due to Federal, State and local rules.

This doesn't make any sense to me: looks like medicare only paid about 10% of approved amount?????????
Why or how does a clinic or hospital stay in business if it takes medicare patients?
I don't get it.
So if you use the 80% rule the bill should have been about $768 and my 20% about $153
Why did Medicare only pay $615 if the approved amount was $6283 they should have paid about $5026
BTW 20% of $6283 is $1256 which is what my Medigap insurer would have to pay.

Does anyone understand this?

 

[MBSC]

Here is an example:
Service Approved- yes
Amount facility charged- $6,283
Medicare approved amount- $6,283
Amount Medicare Paid- $615
Maximum You may be billed- $157
Notes: B,C,D

B: amount Medicare paid the provider is $615
C: we have sent your claim to your Medigap Insurer
D: After your deductible and coinsurance were applied, the amount Medicare paid was reduced due to Federal, State and local rules.

This doesn't make any sense to me: looks like medicare only paid about 10% of approved amount?????????
Why or how does a clinic or hospital stay in business if it takes medicare patients?
I don't get it.
So if you use the 80% rule the bill should have been about $768 and my 20% about $153
Why did Medicare only pay $615 if the approved amount was $6283 they should have paid about $5026
BTW 20% of $6283 is $1256 which is what my Medigap insurer would have to pay.

Does anyone understand this?

80% is a general guide and not a rule. Outpatient hospital facility fees can be reimbursed under different payment methods depending on the type of hospital. Instead of spending taxpayer funds to create unique EOBs for each type of payment method, CMS has chosen to shoehorn the values into a standard EOB format. This sometimes results in the billed charge value being moved to the approved amount field for the sake of simplicity.

Most hospitals are reimbursed for outpatient facility fees using the Outpatient Prospective Payment System (OPPS). You can read more about OPPS reimbursement here: https://www.cms.gov/Outreach-and-Ed...roducts/Downloads/HospitalOutpaysysfctsht.pdf