How are providers reimbursed under traditional Medicare Part A and B?

Providers are reimbursed under traditional Medicare Part A and B on a fee-for-service basis. This means that Medicare pays for each individual service that is provided to a beneficiary. Each service is reimbursed based on a predetermined fee schedule, which varies depending on the type of service rendered. This model allows providers to receive payment for each specific procedure, visit, or service they deliver, rather than a lump sum that does not take into account the services provided to patients.

This system incentivizes providers to deliver certain types of care, as they are reimbursed based on the volume and nature of the services they provide. Understanding this structure is crucial, as it highlights how Medicare facilitates access to medical services and the financial dynamics involved for healthcare providers.