What Is Medicare Assignment and How Does It Work?

What Medicare Assignment Means

Medicare assignment represents a formal agreement between a healthcare provider and Medicare. When a provider accepts assignment, they consent to accept the Medicare-approved amount as full payment for services covered by Medicare Part B. This ensures beneficiaries are only responsible for their deductible and coinsurance amounts. The provider cannot charge the patient more than these out-of-pocket costs.

This arrangement is governed by the Social Security Act, which outlines the terms under which providers can bill Medicare beneficiaries. Providers who accept assignment agree to submit claims directly to Medicare on behalf of the beneficiary. This streamlines the billing process, ensuring that the beneficiary’s share of costs is correctly calculated based on the Medicare-approved amount. By accepting assignment, providers forgo the ability to bill for any amount above the Medicare-approved fee schedule.

The Medicare-approved amount is the payment amount that Medicare sets for a covered service. This amount is determined based on various factors, including the service provided, the geographic location, and the provider’s specialty. Providers who accept assignment are legally bound to this amount, which provides a predictable cost structure for beneficiaries. This helps protect beneficiaries from unexpected medical bills.

The Financial Impact for Beneficiaries

When a healthcare provider accepts Medicare assignment, it directly impacts the financial obligations of the beneficiary. This protects individuals from unexpected medical expenses by limiting their out-of-pocket costs to the Medicare deductible and coinsurance. For example, after meeting the annual Part B deductible, Medicare typically pays 80% of the approved amount for covered services, leaving the beneficiary responsible for the remaining 20% as coinsurance.

Conversely, if a provider does not accept assignment, beneficiaries may face significantly higher costs. While these non-participating providers can still treat Medicare patients, they are not bound by the Medicare-approved amount as full payment. Instead, they can charge up to 15% more than the Medicare-approved amount for most services, known as the “limiting charge.” This additional charge is borne entirely by the beneficiary, on top of their deductible and coinsurance.

Beneficiaries receiving care from a non-participating provider are typically responsible for paying the entire bill upfront. They then submit a claim to Medicare for reimbursement of Medicare’s share of the approved amount. This process can be more cumbersome and result in a larger immediate financial burden compared to services from a provider who accepts assignment.

Provider Participation Levels

Healthcare providers interact with Medicare at different levels, each with distinct implications for beneficiaries’ costs and billing. These levels include participating providers, non-participating providers, and opt-out providers.

Participating providers have signed an agreement with Medicare to always accept assignment for all Medicare-covered services. This means they agree to accept the Medicare-approved amount as full payment and bill Medicare directly. Beneficiaries seeing participating providers are only responsible for their deductible and coinsurance. The provider cannot charge more than these amounts.

Non-participating providers accept Medicare patients but have not signed an agreement to accept assignment for all services. While they can still bill Medicare, they are not obligated to accept the Medicare-approved amount as full payment. These providers can charge beneficiaries up to 15% more than the Medicare-approved amount for covered services, which is known as the “limiting charge.” Beneficiaries are responsible for paying this excess charge in addition to their deductible and coinsurance.

Opt-out providers have formally chosen not to participate in the Medicare program at all. These providers enter into private contracts directly with beneficiaries, meaning Medicare will not pay for any services rendered by them. Beneficiaries seeing opt-out providers are responsible for the full cost of all services. Before receiving care, both the provider and the beneficiary must sign a private contract acknowledging that Medicare will not pay for the services and that the beneficiary is solely responsible for the entire bill.

Finding Providers Who Accept Assignment

Several resources are available to help identify healthcare providers who accept Medicare assignment.

The official Medicare website offers a “Physician Compare” tool, which is a valuable resource for finding healthcare professionals who accept Medicare. This tool allows beneficiaries to search for doctors and other healthcare providers by specialty, location, and whether they accept Medicare assignment. The search results typically indicate the provider’s participation status, making it easier to identify those who accept assignment.

Another direct approach involves contacting a provider’s office directly before scheduling an appointment. Beneficiaries can simply ask if the provider “accepts Medicare assignment” for the services they need. This direct inquiry provides immediate clarification regarding their billing practices.

For those enrolled in Medicare Advantage plans, the plan’s member services or online provider directory can also be helpful. Medicare Advantage plans often have networks of providers who have agreed to the plan’s terms, which typically include accepting negotiated rates similar to the Medicare-approved amount.