★

★

★

CENTERS FOR MEDICARE & MEDICAID SERVICES

Quick Facts About Payment for Outpatient

Services for People with Medicare Part B

This fact sheet explains how Medicare pays for covered hospital outpatient

department services if you have Medicare Part B (Medical Insurance) and

Original Medicare. If you’re in a Medicare Advantage Plan (like an HMO or

PPO), the plan’s rules apply. 

Medicare Part B pays for many of the outpatient services you get in hospitals, like

X-rays and emergency department visits. Part B also pays for partial

hospitalization services in hospital outpatient departments and community mental

health centers. In most hospitals and all community mental health centers,

Medicare pays for these services under the outpatient prospective payment system. 

How the outpatient prospective payment system works

Under the outpatient prospective payment system, hospitals are paid a set amount

of money (called the payment rate) to provide certain outpatient services to

people with Medicare. For most services, you must pay the yearly Part B

deductible before Medicare pays its share. Once you meet the deductible,

Medicare pays most of the total payment and you pay a copayment. For some

services, you don’t need to meet the yearly Part B deductible before Medicare pays

(for example, screening mammography). The payment rate isn’t the same for all

hospitals because it’s adjusted to reflect what people are paid to work in the area

where the hospital is located. It’s also adjusted for other factors each year. 

Part B services paid for under this system include,

but aren’t limited to, the following:

• X-rays (radiology)

• Stitches for a cut

• The hospital charge for an emergency department or hospital clinic visit

(doesn’t include an amount for the doctor’s services)

• Getting a cast

• Surgery that’s safe to perform on an outpatient basis

• Observation to decide if you need inpatient care for an illness or injury 

• The administration of certain drugs that you usually can’t give yourself
Publication No. CMS-11065

December 2004

★

Part B services paid for under this system (continued)

Medicare also uses the outpatient prospective payment system to pay for some

services you get from other facilities, including the following:

• Splints, antigens, and casts you get from a home health agency if you’re not

under a home health plan of care 

• Splints, antigens, and casts furnished by a hospice program outside the hospice

benefit

• Partial hospitalization services you get from a hospital outpatient department

or community mental health center

What you pay 

For most services paid under the outpatient prospective payment system, you 

(or your supplemental coverage) pay the following:

• The yearly Part B deductible if you haven’t already paid it for the year.

• A copayment amount for each service you get in an outpatient visit. For each

service, this amount can’t be more than the Part A inpatient hospital deductible. 

• All charges for items or services that Medicare doesn’t cover.

Example: Mr. Davis needs to have his cast removed. He goes to his local hospital

outpatient department. The hospital charges $150 for this procedure. His

copayment amount for this procedure, under the outpatient prospective payment

system, is $20. Mr. Davis has paid $85 of his $155 Part B deductible. To have his

cast removed, Mr. Davis must pay $90 ($70 remaining deductible amount + $20

copayment amount).

The amount you pay may change each year. The amount you pay may also be

different for different hospitals. 

Note: If you have a Medigap (Medicare Supplement Insurance) policy, other

supplemental coverage, or employer or union coverage, it may pay the Part B

deductible and copayment amounts. 
★

If you paid more than the amount listed on your

Medicare Summary Notice 

After Medicare gets a bill from the hospital, you will get a Medicare Summary

Notice. This notice will show how much you have to pay for the services you got.

It will also show how much Medicare paid the hospital for the services. If the

amount you paid the hospital or community mental health center at the time of

service is more than what was listed on the Medicare Summary Notice, call the

provider and ask for a refund. Tell them you paid more than the amount listed on

the Medicare Summary Notice. 

If you paid less than the amount listed on your

Medicare Summary Notice

If you paid less than the amount listed on your Medicare Summary Notice, the

hospital or community mental health center may bill you for the difference if you

don’t have another insurer who is responsible for paying your deductible and

copayments. 

Your Medicare rights 

If you have Medicare, you have certain guaranteed rights to help protect you.

One of these is the right to appeal. You may want to appeal in any of the

following situations:

• You don’t agree with the amount that is paid.

• A service or item isn’t covered, and you think it should be.

• A service or item is denied, and you think it should be paid.

The Medicare Summary Notice tells you how to appeal a Medicare decision. The

appeals information is on the back. For more information about your rights and

protections, visit www.medicare.gov/Publications/Pubs/pdf/10112.pdf to view the

booklet “Your Medicare Rights and Protections.” 

If you’re concerned about the quality of your care

If you think the hospital or community mental health center isn’t giving you

good quality care, call the Quality Improvement Organization in your state. Call

1-800-MEDICARE (1-800-633-4227) to get the telephone number. TTY users

should call 1-877-486-2048. 
★

CMS Product No. 02118

Revised January 2010

Notes