What Is Medicare Part A/B/C/D?
Medicare is divided into four parts: Part A (hospital insurance) covers inpatient hospital, inpatient SNF, hospice and some home health services; Part B (medical insurance) covers physician services, outpatient care, durable medical equipment, lab and X-ray and many preventive services, and home health services as well; Part C (Medicare Advantage) is private plans that provide all Part A and Part B services; Part D covers outpatient prescription drugs.
- Verify plan type at every encounter using the HETS 270/271 eligibility transaction (CMS's HIPAA Eligibility Transaction System).
- Per the HETS 270/271 companion guide, the 271 response returns every MA enrollment whose period overlaps the requested dates of service, with the MA contract number and, where available, the plan number.
Medicare Part A/B/C/D
Also known as: Medicare Parts; Original Medicare; Medicare Advantage; Medicare Drug Plan
Medicare is divided into four parts: Part A (hospital insurance) covers inpatient hospital, inpatient SNF, hospice and some home health services; Part B (medical insurance) covers physician services, outpatient care, durable medical equipment, lab and X-ray and many preventive services, and home health services as well; Part C (Medicare Advantage) is private plans that provide all Part A and Part B services; Part D covers outpatient prescription drugs.
Definition
Those scope descriptions follow CMS's own summary in Medicare & Medicaid Basics (MLN909330), and the detail matters because the shorthand version — Part A is the hospital, Part B is the doctor — misroutes claims. Home health appears under both parts. Outpatient hospital services are a Part B benefit even though a hospital bills them. Payment method follows the setting rather than the part: an acute-care inpatient stay at a hospital paid under the Inpatient Prospective Payment System is grouped to an MS-DRG, while practitioner services are paid from the Physician Fee Schedule's work, practice-expense and malpractice RVUs, adjusted for locality and multiplied by a conversion factor. Part C (Medicare Advantage) plans are Medicare-approved private insurers that must provide all Part A and Part B services and may add drug coverage and supplemental benefits, usually through HMO or PPO networks with their own prior-authorization and payment terms. Part D is outpatient prescription drug coverage from Medicare-approved private plans. Routing follows enrollment rather than service type: Original Medicare claims are processed by MACs, and Medicare Advantage claims are processed by the plan.
Example
A patient in Original Medicare is admitted for a CABG. Part A pays the hospital one MS-DRG payment for the whole stay, and which bypass DRG applies depends on what was documented and coded — MS-DRG 235 is 'Coronary bypass without cardiac catheterization with MCC' in CMS's FY 2026 IPPS final rule Table 5, with a relative weight of 5.8686, while a stay that included a cardiac catheterization groups instead to 233 or 234. The dollar amount is that weight applied to the hospital's own base payment rate, so there is no single national figure to quote. Part B pays the surgeon separately for the bypass itself (CPT 33533, single arterial graft), and because that code carries a 090 global period in CMS's Physician Fee Schedule relative value file, the allowance also covers the routine postoperative visits. Part D covers the post-discharge antiplatelet prescription. If the same patient is enrolled in a Medicare Advantage plan, the plan — not the MAC — pays the hospital and the surgeon, under its contracted rates and its own authorization rules.
Common Misconceptions
Medicare Advantage is not 'supplemental' Medicare layered on top of Original Medicare — a beneficiary who enrolls gets their Part A and Part B benefits through the plan instead. Do not invert the error either. Enrollment alone does not settle where a claim goes: CMS's HETS 270/271 companion guide documents an MA Bill Option Code returned with each MA enrollment in the eligibility response, and its values distinguish the cases where the plan processes all claims from the cases where the Medicare contractor does. Read the code rather than assuming.
Practical Application
Verify plan type at every encounter using the HETS 270/271 eligibility transaction (CMS's HIPAA Eligibility Transaction System). Per the HETS 270/271 companion guide, the 271 response returns every MA enrollment whose period overlaps the requested dates of service, with the MA contract number and, where available, the plan number. Treat that as routing information only: the same guide directs eligibility, coverage and payment questions for Medicare Advantage to the plan itself, and says CMS strongly recommends contacting the MA plan directly to confirm eligibility, adding that an indication of coverage does not guarantee payment.
Related Terms
CMS
CMS is the federal agency within the U.S. Department of Health and Human Services that administers Medicare, jointly administers Medicaid and CHIP with the states, and oversees the Health Insurance Marketplaces and HIPAA administrative simplification.
Read definitionMedicare Advantage
Medicare Advantage (Part C) is coverage offered by private insurers under contract with CMS, through which a beneficiary receives their Medicare Part A and Part B benefits instead of through Original Medicare — most often as an HMO or PPO product with a provider network and prior-authorization requirements, paid for by a risk-adjusted capitation from CMS.
Read definitionMAC (Medicare Administrative Contractor)
A Medicare Administrative Contractor is a private organization that contracts with CMS to process Medicare Part A and Part B claims (or DME claims) within a defined geographic jurisdiction, applying CMS coverage rules and publishing local coverage determinations.
Read definitionDRG (Diagnosis-Related Group)
A DRG is the inpatient hospital classification system that groups admissions with similar clinical characteristics and resource use into a single payment category; CMS uses MS-DRGs to pay hospitals under the IPPS for Medicare inpatient stays.
Read definitionRVU (Relative Value Unit)
An RVU is a unit of measure in the Medicare Resource-Based Relative Value Scale (RBRVS) representing the relative resources required to perform a CPT/HCPCS service, comprising work, practice expense, and malpractice components.
Read definitionWhere This Applies on MedPrecision
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