Medicare assignment for original fee-for-service Medicare

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Assignment

Many doctors and other health care providers agree to accept the Medicare approved amount as the total payment for their services, known as "accepting assignment." Assignment applies if you are in the original, fee-for-service Medicare program. It does not apply if you are in a Medicare Advantage plan, such as an HMO (Health Maintenance Organization), a PPO (Preferred Provider Organization), a Private Fee-for-Service plan (PFFS), or a Medicare Savings Account (MSA). Note: for more information on all of these types of plans and how they work, see our Medicare Advantage section.

When a doctor, other health care provider, or supplier accepts assignment, they also agree to bill Medicare, as you have “assigned” Medicare to pay the doctor, other provider, or supplier directly for your care.

Example: A doctor charges $120 for a service. Medicare’s approved amount for the service is $100. A doctor who accepts assignment agrees to the $100 as full payment for that service. The doctor bills Medicare who pays him or her 80% or $80, and you are responsible for the 20% coinsurance (after you have paid the Part B annual deductible of $135 in 2008.)

Who accepts assignment?

Doctors and other providers who participate in Medicare accept assignment for all their Medicare patients. Doctors and other providers who do NOT participate in Medicare CAN also accept assignment. They may accept assignment for some Medicare patients on a case-by-case basis, but not all their Medicare patients. Always ask your doctor in advance if he or she accepts Medicare assignment. Going to a provider who accepts assignment can often save you money.

For a list of doctors and suppliers in your area who participate in Medicare, call 1-800-Medicare (1-800-633-4227), or look up this information on the Medicare Part B Carrier’s (National Heritage Insurance Company) website.

Providers who do not accept assignment

Doctors and other providers who do not accept assignment can charge you more than the Medicare-approved amount, but they cannot charge you more than 115% of Medicare’s approved amount. The additional 15% is called an excess charge or limiting charge. The limiting charge applies only to certain services and does not apply to supplies or durable medical equipment.

Example: A doctor charges $120 for a service. Medicare’s approved amount for the service is $100. A doctor who does not accept assignment can charge you more than $100, but not more than $115 for that service. Even though the doctor does not accept assignment, he or she still has to bill Medicare. The doctor may ask you to pay the $115 at the time you receive the service. After Medicare processes the claim, Medicare reimburses you 80% of the Medicare-approved amount or $80, and the balance of $35 ($20 Part B coinsurance plus $15 excess or limiting charge) is your out-of-pocket cost, assuming you have met the Part B deductible.

Because of the excess or limiting charge, you often save money by going to a provider who accepts assignment, as illustrated below.

Review your Medicare Summary Notice (MSN). It will indicate:

• the amount charged by the provider;
• the amount approved by Medicare;
• whether the physician accepted assignment; and
• the amount for which you may be responsible.

The amount for which you may be responsible is a combination of deductibles, co-insurance, and any non-covered charges. Thus, if you go to a doctor who does not accept assignment, the MSN will show if the doctor has charged you more than 15% above the approved amount for the service. If he or she overcharged you, you are entitled to a reduction in the charge or a refund.

Doctors and some other providers may “opt out” of Medicare, which means they cannot bill Medicare for any Medicare-covered services or items for two years. If a Medicare beneficiary wants to see a doctor who has opted out and the doctor agrees to treat him or her, the doctor and Medicare beneficiary must enter into a private contract for services normally covered by Medicare. The contract must be in writing and signed by the beneficiary.

Doctors who have opted out may set their own rates; the limiting charge does not apply to them. If you enter into a private contract with a doctor who has opted out, you cannot get reimbursed from Medicare. You are responsible for the charges from this doctor. Call Medicare (1-800-MEDICARE) to find out if your doctor has opted out of Medicare or look up this information on the Part B carrier’s website: medicarenhic.com

Advance Beneficiary Notice

Medicare covers only those services and items that it considers "reasonable and medically necessary." If your doctor believes that Medicare will deny payment for a particular service, he or she is required to tell you before providing the service and present an Advance Beneficiary Notice (ABN). The doctor must use an approved ABN form and on the form identify the service; state that he or she believes Medicare will probably deny payment; and give his or her reason(s) for believing why Medicare will deny payment. The purpose of the ABN is to help you make an informed decision about the service or item. If you sign, you agree to pay the doctor for the service if Medicare denies payment. If you do not sign, the service will not be provided. Other providers, such as labs, and suppliers may also use the ABN.

If a doctor does not notify you, and does not present the ABN, the doctor can be required to absorb the cost of procedures that Medicare deemed “not reasonable and medically necessary.” You aren’t required to pay for the service(s) if you were not informed in advance that the service(s) might not be covered by Medicare, or if you did not sign an ABN. However, under some circumstances, if you were aware, or should have been aware, that the services are not covered, liability remains with you.

For example, services generally known to be excluded from Medicare coverage include routine physicals, dental care, and hearing aids. It is advisable to wait for the MSNto find out what Medicare covered, what service(s) Medicare did not cover and why, and what you are responsible to pay before making any payment.

If you cannot resolve a financial issue with your provider or supplier, please contact the Health Insurance Counseling and Advocacy Program (HICAP) which provides free, objective information and counseling on Medicare and other related topics. You can call 1-800-434-0222 with your questions or to make an appointment at the HICAP office nearest you.

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Page updated April 9, 2008