Medicare Assignment: What is it and How it Works

The Medicare program is administered by the Centers for Medicare and Medicaid Services (CMS). The CMS has preapproved amounts that it will permit Medicare to pay for a healthcare provider’s services. When a doctor accepts a Medicare assignment they are agreeing to Medicare’s approved costs for each service that they provide. This agreement protects beneficiaries from out-of-pocket costs since the doctor has accepted the assignment and will not charge more than the approved Medicare cost.

Do Many Doctors Accept Medicare?

More than 800,000 physicians accept Medicare. In fact, fewer than 3% of providers choose to opt-out of Medicare and refrain from providing services to Medicare beneficiaries.

When a Doctor Accepts Medicare, Do They automatically accept Medicare assignment?

No, accepting Medicare and accepting Medicare assignment are separate actions. A doctor can see a Medicare patient without accepting assignment. However, they cannot charge more than 15% above the Medicare allowed amount for the procedures that they perform. Doctors who accept Medicare assignment will only be able to be reimbursed with the Medicare-allowed amount. They are not able to choose to charge more.

What Options Do Providers Have When It Comes to Medicare?

Providers may choose one of three options concerning their relationship with Medicare. They may choose to participate, refrain from participating, or opt-out altogether.

Providers that Participate with Medicare

Physicians who accept Medicare assignment are considered participating providers. They choose to accept the amount that Medicare has established for the services rendered as full payment. Each procedure that the doctor offers has a designated allowable cost based on the Medicare fee schedule. Providers will submit all claims directly to Medicare, which will typically cover 80% of approved costs with the remaining 20% typically being paid for by the Medicare enrollee. For more information visit Medicare Parts A & B Costs.

Providers that Do Not Participate with Medicare

Providers that accept Medicare but choose not to accept assignment can charge up to 15% more than the amount that Medicare’s fee schedule has designated for the service. The extra amount is an out-of-pocket cost for the beneficiary.

Providers that Opt-Out of Medicare

Providers that opt-out of Medicare choose not to provide medical care to Medicare beneficiaries. Only a few doctors opt-out of Medicare, but before seeing a physician, it’s important to do your research. A doctor who does not accept Medicare may charge more than Medicare’s allowable amount, and you could be responsible for paying for the full price of the services that you receive out-of-pocket.

How Can You Be Sure That a Provider Accepts Medicare Before You Schedule Your Visit?

You can contact the provider’s office and ask whether they accept assignment. Additionally, you can use the provider comparison tool on Medicare’s website. The tool allows you to search for participating providers by type, name, specialty, or group.

Can a Non-participating Provider Accept Medicare Assignment on Some Claims?

A non-participating provider can choose to accept assignment on a claim when they choose. They affirm their decision to accept Medicare assignment on a specific claim by checking “yes” on their claim form. Medicare claims are submitted on the CMS-1500 claim form. The assignment is entered in item 27 of the form.

Do Doctors Automatically Accept Medicare Advantage Plans if They Accept Original Medicare?

Medicare Advantage (Part C) plans often include plan networks that indicate which providers participate in the Part C coverage. It is important to note that Advantage plans take the place of Original Medicare, and it’s not a certainty that a physician that accepts Original Medicare will accept Medicare Advantage considering Advantage plans will contract with differing providers based on the insurance provider’s own plan model.

If you have an Advantage plan and receive services from a doctor that accepts Original Medicare only, you may be responsible for paying the cost of the services out-of-pocket. With that said, Advantage Plans have many options including PPO’s and HMO’s that will typically enable the enrollee to select a plan that will address the person’s health care provider and coverage needs.

Do Doctors That Accept Medicare Always Accept Medicaid?

Doctors that accept Medicare do not automatically accept Medicaid. However, many Medicare providers also accept Medicaid. If you have both Medicaid and Medicare, it is best to ask the doctor if they accept both insurances before you receive services. Medicaid will pay the amount that remains after Medicare pays if the doctor accepts both types of coverage.

Do All Doctors That Accept Medicare Accept Medicare Supplement Plans (Medigap)?

Yes, if a doctor accepts Medicare, they must accept Medigap. Your Medicare Supplement is acceptable wherever Medicare is accepted.

What Is a Private Opt-out Contract?

Doctors who don’t accept Medicare assignment may ask that you sign a private opt-out agreement. If you sign the contract, you agree to pay the entire amount that the doctor charges on your own. Once the contract is signed, Medicare will not offer to reimburse you for the expenses. You are essentially signing away your ability to use your Medicare insurance for the services provided. Additionally, you are agreeing to the service prices that the doctor sets.

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