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Medicare assignment refers to the amount of money Medicare is willing to pay for a given service. A provider who charges this amount has “accepted assignment”.
Nearly all healthcare providers accept Medicare, but those who have refused assignment may charge up to 15 percent more than the approved amount and may require you to pay upfront for services.
Medicare Advantage plans, as a type of private insurance, are unaffected by assignment. Instead, they have a network of participating providers.
Original Medicare, Parts A and B, is one of the most widely accepted forms of health insurance in the country. In fact, Medicare providers make up 93 percent of all doctors in the United States. However, just because a provider accepts Medicare, does not mean that they’ll accept all Medicare. How much you pay out of pocket depends on whether or not your provider accepts Medicare assignment. But what is Medicare assignment, and why does it matter?
Like all types of health insurance, Original Medicare has a network: a series of providers that have accepted a deal with the insurer to offer services at a specific price point. However, Original Medicare’s network is a bit different from private insurers. Because it’s a government-backed program, most doctors accept Medicare as a form of payment. In fact, only about 1 percent of non-pediatric physicians have opted-out of Medicare entirely.
If a doctor accepts any form of health insurance, they’re likely to accept Original Medicare. However, that doesn’t mean you can just show them your Medicare card and be done with it. For a service to be properly covered by Medicare, the provider must accept assignment.
A provider has accepted assignment if they have agreed to accept the Medicare-approved amount as payment for all services. All health services covered by Medicare have an approved price: the amount of money Medicare is willing to pay for that service. If a provider has accepted assignment, you are only obligated to pay the 20 percent co-insurance standard for most Original Medicare services.
Providers who have accepted assignment for all Medicare-covered services are considered participating providers. However, some providers will charge more than the Medicare-approved amount for some or all of their services. These are considered non-participating providers.
The Medicare Care Compare tool allows you to search for participating providers, while the Supplier Directory allows you to find participating durable medical equipment vendors. A participating provider will have a dollar sign under their entry, with a note reading “Charges the Medicare-approved amount (so you pay less out-of-pocket)”. You can choose to filter out non-participating providers by clicking the Medicare-approved payment drop-down on the directory. If the provider has a question mark in their entry, that means they selectively accept assignment.
Whether or not a provider accepts assignment depends on how they receive payment. A doctor with a private practice is free to accept or refuse assignment as they wish. However, a doctor working in a facility like a clinic or hospital is bound by the decisions of their employer. If the hospital accepts assignment, all doctors employed there must accept assignment as well
Be Aware: Some hospitals rent out space to private practices. These practices have separate billing systems and usually have separate check-ins and entrances than hospital-run facilities. The hospital’s name is usually absent from any signage or material the practice provides. Never assume your provider accepts assignment, even if their office is located in a facility that typically does.
Non-participating providers still accept Medicare as payment. However, the process of paying for covered services is a bit more complicated. Non-participating providers can charge more than the Medicare-approved amount for services. These extra costs are referred to as excess charges, and the beneficiary is responsible for paying them in full.
For most providers, excess charges are capped at 15 percent more than the Medicare-approved amount. This 15 percent cap is known as the limiting charge. Non-participating providers must inform you of these excess charges before rendering services. A Medicare Supplemental Insurance (Medigap) Plan F or G can help cover excess charges, though only Plan G is available to new enrollees.
Be Aware: Medicare equipment vendors are not bound by the 15 percent limiting charge, which can make buying equipment like wheelchairs and stair lifts quite expensive. Be sure your equipment provider accepts assignment before making a purchase!
If your provider does not accept assignment, you may be required to pay your entire bill at the time of service. Afterward, you can submit a claim to Medicare for reimbursement. Your doctor can also submit a claim for you but cannot charge you for doing so.
A non-participating provider may accept assignment for certain services while refusing it for others. Your doctor must inform you if a service is not covered under assignment.
If you are dual enrolled in Medicare and Medicaid, you may find that your provider only accepts the Medicare portion of your plan. Your local Medicaid provider should have a directory indicating local providers that accept Medicaid as payment. In this case, it is best to find a provider that accepts both Medicare (even if they do not accept assignment) and Medicaid, as Medicaid will cover the costs Medicare does not.
Medicare Part C (Medicare Advantage) is a type of government-subsidized private insurance. Rather than having assignment, Medicare Advantage plans have a network, just like typical health insurance. The type of network is dependent on the plan and the insurance provider, but the following network types are the most common.
Health Maintenance Organization (HMO): These plans limit you to a specific set of providers, considered “in-network”. They will not cover services rendered by out-of-network providers except in emergencies. However, this also means you don’t need to deal with filing claims or extra fees in most cases. You don’t need to worry about assignment with an HMO, as you can only see providers that have entered into an agreement with your insurer.
Preferred Provider Organization (PPO): These plans allow you to seek treatment from any provider but charge less for in-network coverage. Seeing an out-of-network provider is similar to visiting a non-participating provider under Original Medicare.
Private Fee for Service (PFFS): These plans allow you to get coverage from any provider, though you may have to file claims with your insurer, depending on the plan and service.
Special Needs Plans (SNP): These plans limit you to a specific network of providers, depending on the nature of your plan.
Check with your insurer to learn what kind of network you have and what providers are in-network.
Like Medicare Advantage, Medicare Part D is a type of government-subsidized private insurance. As such, it has a network of participating pharmacies. The price of services depends on the individual pharmacy, whether or not it is in network, and your plan’s formulary.
If you’re confused about Medicare assignment or your network, we can help. Call us at (800) 950-0608 to speak with a licensed insurance agent. We can help you find coverage that works for you.