How Medigap Plans Work

Medigap, also known as Medicare Supplement Insurance, plays a crucial role in the patient billing and reimbursement process. For healthcare administrative staff, understanding how these plans work ensures accurate communication with patients, cleaner claims, and fewer billing delays. Unlike Medicare Advantage plans, Medigap policies do not replace Medicare—they simply fill the financial gaps left after Medicare Part A or Part B pays. This can include deductibles, coinsurance, and other out-of-pocket costs depending on the plan type.

In practice, Medicare always pays first. Once Medicare processes a claim and determines its allowed amount, it automatically forwards the claim to the patient’s Medigap plan (known as the crossover process). The Medigap insurer then evaluates the remaining balance and pays their portion directly to the provider. When staff understand which parts Medicare covers and how Medigap steps in afterward, they can confidently explain patient responsibility, navigate coverage questions, and ensure accurate claim routing.

A clear grasp of Medigap fundamentals empowers front-end staff to provide better service, reduce confusion, and support a smoother revenue cycle for both patients and providers.