What is the Approved Amount (Health Care) and Its Importance in Medicare?
Definition & Meaning
The approved amount in health care refers to the sum that Medicare considers reasonable for medical services, including procedures, therapies, and medications covered under Medicare Part B. This amount may be lower than what healthcare providers actually charge for their services. After meeting the annual deductible, beneficiaries are responsible for paying a co-insurance of 20% of the Medicare-approved amount for all covered services.
Legal Use & context
The term "approved amount" is primarily used in the context of Medicare and health care law. It is relevant for individuals navigating their health insurance options, particularly those eligible for Medicare. Understanding the approved amount is essential for beneficiaries to manage their healthcare costs effectively. Users can find legal forms and resources to help them understand their rights and responsibilities regarding Medicare coverage through platforms like US Legal Forms.
Real-world examples
Here are a couple of examples of abatement:
Example 1: A doctor charges $200 for a consultation, but Medicare determines the approved amount to be $150. After the beneficiary meets their deductible, they will pay 20% of the approved amount, which is $30.
Example 2: A patient receives physical therapy that costs $300, but the Medicare-approved amount is $240. The patient will pay $48 after the deductible is met (20% of $240). (hypothetical example)