What You Owe Is Based On If Your Provider Accepts Medicare Assignment

So you have navigated Medicare open enrollment and are now in need of a medical service.  But how to decide what medical services provider to see, how much will that cost, and how to save the most money?  The answers to these questions are determined by the providers and whether or not they accept Medicare assignment.  Knowing the assignment agreements of providers can help seniors manage their budgets and save money.

First, a Couple of Definitions[541]

  • Assignment - An agreement by a doctor or other healthcare provider, or supplier to be paid directly by, and accept the approved payment amount from Medicare, for a medical service.
  • Medicare-Approved Amount - The amount a doctor or supplier that accepts assignment can be paid.
  • Participating Provider - Medical services providers who have chosen to accept assignment.

Three Options for Medical Services Providers

Providers that choose to accept Medicare patients have three options when it comes to payment for services rendered.  Two of these options involve approved amounts.

Providers can:

  • Accept Medicare assignment - These providers participate in Medicare (a participating provider) and accepts the approved amount as payment.  Usually the approved amount is less than the amount billed by the provider, which saves money for the patient.
  • Participate in Medicare but not accept assignment - These providers are non-participating Medicare providers, but agree to accept as payment no more than 15% above the approved amount.  However, the payment that Medicare makes is still based on the approved amount.  Any excess charges by the provider are the responsibility of the patient.  In addition, while the provider will file the claim, the patient could be required to make a payment before the filing of the claim and wait for reimbursement from Medicare.
  • Enter into Private Contracts with the patient - These providers do not provide medical services through Medicare and do not base their fee structure on the approved amount.  The private contract stipulates the services that will be rendered and the amount due for these services.  No claim will be filed and the patient is responsible for all payment.  If the patient has a Supplement policy, it also will not pay anything for the services.

As you can probably see, a patient over age 65 that sees a provider that accepts assignment will enjoy lower out-of-pocket costs.

Payment Examples Based on Medicare Assignment

Consider a patient with Part B that has reached his Part B deductible.  Generally speaking, Medicare would then pay 80% of the approved amount for future charges, with the patient paying for the remainder of the bill.

Lets say this patient sees his doctor, the doctor charges $200 for the visit, and the amount approved is $100.  Here is the payment breakdown for each of the assignment scenarios.

  Participating Non-Participating Private Contract
Billed Charge $200 $200 $200
Medicare-approved Amount $100 $100 $100
Payment Owed To Provider $100 $115 $200
Payment From Medicare $80 $80 $0
Payment From Patient $20 $35 $200

How Do Medicare Supplement Policies Fit In?

Supplement policies are treated just the same as Original Medicare.  If a provider accepts assignment then the Supplement policies pay based on the approved amount.  If a provider is a Private Contract provider, meaning Medicare does not pay, the Medicare supplement policies also do not pay.

Claim Filing for Medicare Claims

Providers are required by law to file Medicare claims, whether they are participating or non-participating, although there may be some some cases where a patient might have to file their own claim using Form CMS-1490S.[541]  The form can be found at www.medicare.gov/medicareonlineforms

Even if non-participating providers file the claim, the patient may still be required to pay the full amount up front.  In that case, after Medicare processes the claim they will reimburse the patient the amount of their payment.   However, the patient cannot be charged a fee for the filing of the claim.

Obviously, since Medicare does not provide reimbursement for services rendered under a Private Contract, there is not file to claim.  In this case, the patient and the provider decide in writing the terms of payment.  Medicare does not play a part in the payment of Private Contract services.

Make Sure to Know if Your Provider is Participating

It is extremely important to know if your doctor is a participating provider.  The patient responsibility for services provided at a participating provider will almost always be lower than the patient responsibility for services provided at a non-participating provider or from entering into a Private Contract.

Other Resources

If you would like more information on assignment and other topics visit the Medicare website.  There is a very helpful - and long -  handbook along with Frequently Asked Questions.  Member services can also be reached at 800-MEDICARE.

If you want personal detailed help you can also consult a health insurance broker.  Brokers are great resources to answer your questions and shop for Supplement plans.

It is important that when budgeting for seniors, an understanding of Medicare assignment is in place.


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