Many doctors and health care providers agree to accept the Medicare-approved amount (the combination of what you and Medicare pay) as the total payment for their services. This is 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 (MA) plan, such as a Health Maintenance Organization (HMO) or Private Fee-for-Service (PFFS) plan. If you are in an MA plan, review your plan materials to learn which providers are in your plan and what copayments are required for provider visits.
When a doctor, health care provider or supplier accepts assignment, they also agree to bill Medicare, as you have assigned Medicare to pay the doctor, provider or supplier directly for your care.
Example: A doctor charges $120 for a service. The Medicare-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, which pays him/her 80% or $80, and you are responsible for the 20% coinsurance or $20 (after you have paid the Part B annual deductible of $162 in 2011).
Topics on this page
- Providers Who Accept Assignment
- Providers Who Do Not Accept Assignment
- Private Contracting Providers
- Advance Beneficiary Notice
1. Providers Who Accept Assignment
Doctors and other providers who participate in Medicare accept assignment for all of their Medicare patients. Doctors and other providers who do not participate in Medicare can also accept assignment for some Medicare patients on a case-by-case basis. Always ask your doctor in advance if he/she accepts Medicare assignment. Seeing 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 Medicare’s website.
2. 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. This additional 15% is called an excess charge or limiting charge. The limiting charge only applies 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. The doctor may ask you to pay the $115 at the time you receive the service.
Even though the doctor does not accept assignment, he/she is required by law to file a claim with Medicare. After Medicare processes the claim, it will reimburse you 80% of the approved amount or $80. 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 for the year.
Because of the excess or limiting charge, you often save money by going to a provider who accepts assignment, as shown in the chart below.
Assignment Savings Example
|With Assignment||Without Assignment|
|Actual Doctor’s Bill||$115||$115|
|Medicare Pays 80%||$80||$80|
|Your 20% Coinsurance||$20||$20|
|Total You Pay||$20||$35|
Review your Medicare Summary Notice (MSN), which is mailed to you approximately every 3 months if you had a Medicare-covered service during that time. Your MSN will indicate:
- Amount charged by the provider
- Amount approved by Medicare
- Whether the physician accepted assignment
- Amount you may be responsible for paying
The amount you may be responsible for paying is a combination of deductibles, coinsurance and any non-covered charges. Thus, if you go to a doctor who does not accept assignment, the MSN will show if the doctor charged more than 115% of the approved amount for the service. If he/she overcharged, you are entitled to a reduction in the charge or a refund if you have already paid for the service.
Note: To get personalized, up-to-date information on your Medicare account (such as copies of your MSN, and status of your claims and Part B deductible), register online at MyMedicare.gov.
3. Private Contracting Providers
Doctors and certain other providers may “opt out” of Medicare, which means they can set their own rates; the limiting charge does not apply. If you want to see a doctor who has opted out and agrees to treatment, you and the doctor must enter into a private contract for services normally covered by Medicare. The contract must be in writing and you must sign it.
If you enter into a private contract with a doctor who has opted out, you will not be reimbursed from Medicare. You are responsible for all 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 Medicare’s website.
4. Advance Beneficiary Notice (ABN)
Medicare only covers services and items it considers “reasonable and medically necessary.” If your doctor (one that has NOT opted out of Medicare) believes that Medicare will deny payment for a particular service, he/she is required to tell you before providing the service and give you an Advance Beneficiary Notice (ABN). The doctor must use an approved ABN form (Form CMS-R-131) to:
- Identify the service
- State that he/she believes Medicare will likely deny payment
- Give his/her reason(s) for believing Medicare will likely deny payment
- State the estimated cost
The purpose of the ABN is to help you make an informed decision about the service or item. If you sign it, you agree to pay the doctor for the service if Medicare denies payment. If you do not sign it, the service will not be provided. Other providers, such as labs and suppliers may also use an ABN.
If a doctor does not notify you and does not present the ABN, he/she 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 or services if you were not informed in advance that they might not be covered by Medicare, or if you did not sign an ABN.
Under certain circumstances, however, if you were aware or should have been aware that the services were not covered, you may need to pay for them. For example, services generally excluded from Medicare coverage include routine physicals, dental care and hearing aids.
Before you make any payments, either look at your Medicare Summary Notice (MSN), which is mailed to you approximately every 3 months if you’ve received Medicare services, or check the status of your claim on MyMedicare.gov to find out what Medicare covered, what Medicare did not cover and why, and the amount you are responsible for paying.
If you cannot resolve a financial issue with your doctor, provider or supplier, contact the Health Insurance Counseling & Advocacy Program (HICAP). HICAP provides free, objective information and counseling on Medicare and other related topics.