Certified Financial Consultant (CFC) Practice Exam

If a Medicare insured uses a health care provider who does not accept Medicare payments, which of the following is likely true?

1. The provider will deny service

2. The insured might need to sign a private contract with the provider

3. The provider is automatically out of network

4. All costs will be covered by Medicare

The correct answer is: The insured might need to sign a private contract with the provider

When a Medicare beneficiary seeks services from a healthcare provider who does not accept Medicare payments, it is likely that the insured will need to sign a private contract with the provider. This arrangement allows the beneficiary to receive care while acknowledging that Medicare will not cover any costs associated with the services received. In this scenario, the provider is agreeing not to bill Medicare for the services, and the patient accepts responsibility for the full payment. In this situation, options like denying service or the provider being automatically out of network are not definitive outcomes since a provider can choose to treat the patient but simply not accept payment from Medicare. Additionally, stating that all costs will be covered by Medicare is also inaccurate, as the fundamental reason for the situation is that the provider does not accept Medicare payments, leading to no reimbursement from Medicare. Thus, the requirement for a private contract solidifies the responsibility of the patient for the costs incurred, outlining their understanding of the payment arrangement.