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What does ‘accepting assignment’ mean?

Accepting assignment is a real concern for those who have Original Medicare coverage. Physicians (or any other healthcare providers or facilities) who accept assignment agree to take Medicare’s payment for services. They cannot bill a Medicare beneficiary in excess of the Medicare allowance, which is the copayment or coinsurance. While providers who participate in the Medicare program must accept assignment on all Medicare claims, they do not have to accept every Medicare beneficiary as a patient. 

There are basically three Medicare options for physicians.

• Physicians may sign a participating agreement and accept Medicare’s allowed charge as payment-in-full for all of their Medicare patients. Use the Physician Compare database to find physicians who accept assignment. 
• They may elect to be non-participating, in which case, they make decisions about accepting Medicare assignment on a case-by-case basis. They can bill patients up to 15% more than the Medicare allowance. Some Medigap policies offer a benefit to cover this amount, known as Part B excess charges.
• Or, they may opt out of Medicare entirely and become private contracting physicians.  They establish contracts with their patients to bill them directly. Neither the physicians nor the patients would receive any payments from Medicare.

Accepting assignment can also be a concern for beneficiaries with coverage other than Original Medicare, including those:

• in a Medicare Advantage Private Fee-for-service (PFFS) plan who get services outside the network.
• in a Medicare Advantage Medical Savings Account (MSA) plan because this plan does not utilize networks.

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Find-A-Code Articles, Published 2014, August 1

What does accept assignment mean.

by   InstaCode Institute Aug 1st, 2014 - Reviewed/Updated Mar 5th

What does it mean to accept assignment on the CMS 1500 claim form - also called the HCFA 1500 claim form.? Should I accept assignment or not? What are the guidelines for accepting assignment in box 27 of the 1500 claim?

These commonly asked questions should have a simple answer, but the number of court cases indicates that it is not as clear cut as it should be. This issue is documented in the book “Problems in Health Care Law” by Robert Desle Miller. The definition appears to be in the hands of the courts. However, we do have some helpful guidelines for you.

One major area of confusion is the relationship between box 12, box 13 and box 27.  These are not interchangeable boxes and they are not necessarily related to each other.

According to the National Uniform Claim Committee (NUCC), the "Accept Assignment" box indicates that the provider agrees to accept assignment.  It simply says to enter an X in the correct box.  It does NOT define what accepting assignment might or might not mean.

It is important to understand that if you are a participating provider in any insurance plan or program, you must first follow the rules according to the contract that you sign. That contract supersedes any guidelines that are included here.

Medicare Instructions / Guidelines

PARTICIPATING providers MUST accept assignment according to the terms of their contract.  The contract itself states:

“Meaning of  Assignment  - For purposes of this agreement, accepting  assignment  of the Medicare Part B payment means requesting direct Part B payment from the Medicare program.  Under an  assignment , the approved charge, determined by the Medicare carrier, shall be the full charge for the service covered under Part B.  The participant shall not collect from the beneficiary or other person or organization for covered services more than the applicable deductible and coinsurance.”

By law, the providers or types of services listed below MUST also accept assignment:

• Clinical diagnostic laboratory services;
• Physician services to individuals dually entitled to Medicare and Medicaid;
• Services of physician assistants, nurse practitioners, clinical nurse specialists, nurse midwives, certified registered nurse anesthetists, clinical psychologists, and clinical social workers;
• Ambulatory surgical center services for covered ASC procedures;
• Home dialysis supplies and equipment paid under Method II;
• Ambulance services;
• Drugs and biologicals; and
• Simplified Billing Roster for influenza virus vaccine and pneumococcal vaccine.

NON-PARTICIPATING providers can choose whether to accept assignment or not, unless they or the service they are providing is on the list above.

The official Medicare instructions regarding Boxes 12 and 13 are:

“Item 12 – The patient's signature authorizes release of medical information necessary to process the claim. It  also authorizes payments of benefits  to the provider of service or supplier when the provider of service or supplier accepts assignment on the claim.” “Item 13 - The patient’s signature or the statement “signature on file” in this item  authorizes payment of medical benefits  to the physician or supplier. The patient or his/her authorized representative signs this item or the signature must be on file separately with the provider as an authorization. However, note that when payment under the Act can only be made on an assignment-related basis or when payment is for services furnished by a participating physician or supplier, a patient’s signature or a “signature on file” is not required in order for Medicare payment to be made directly to the physician or supplier.”

Regardless of the wording on these instructions stating that it authorizes payments to the physician, this is not enough to ensure that payment will come directly to you instead of the patient.To guarantee payment comes to you, you MUST accept assignment.

Under Medicare rules, PARTICIPATING providers are paid at 80% of the  physician fee schedule allowed amount  and NON-participating providers are paid at 80% of the allowed amount, which is 5% less than the full Allowed amount for participating providers. Only NON-participating providers may "balance bill" the patient for any amounts not paid by Medicare, however, they are subject to any state laws regarding balance billing.

TIP: If you select YES, you may or may not be subject to a lower fee schedule, but at least you know the payment is  supposed  to come to you.

NON-MEDICARE Instructions / Guidelines

PARTICIPATING providers MUST abide by the terms of their contract.  In most cases, this includes the requirement to accept assignment on submitted claims.

NON-PARTICIPATING providers have the choice to accept or not accept assignment.

YES means that payment should go directly to you instead of the patient.  Generally speaking, even if you have an assignment of benefits from the patient (see box 12 & 13), payment is ONLY guaranteed to go to you IF you accept assignment.

NO is appropriate for patients who have paid for their services in full so they may be reimbursed by their insurance.  It generally means payment will go to the patient.

What Does Accept Assignment Mean?. (2014, August 1). Find-A-Code Articles. Retrieved from https://www.findacode.com/articles/what-does-accept-assignment-mean-34840.html

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Wiki   Accept Assignment

• Thread starter fantasyquill
• Start date Aug 15, 2023

fantasyquill

• Aug 15, 2023

My understanding is that if you check the box to "accept assignment," by definition, means you are accepting that insurance's fee schedule and allowed amount as payment in full, regardless of whether you are contracted with them or not. We have a few insurances that sneak through, paying a miniscule amount, some % of Medicare rate, that is much lower than our regular commercial insurance rates, but because this box is checked, we have no recourse. When you call them, they say they do not negotiate their rate. Is anyone else out there having this problem? If so, how are you handling it? Our hands feel tied, but it hardly seems it should be legal for a small insurance to pay a % of Medicare rates on a commercial claim and get away with it simply because we accept assignment.  

Your understanding isn't quite correct here. 'Assignment of benefits' means that the patient has agreed to assign their benefits to the provider. In other words, they have agreed that instead of receiving their benefits (payment for a given service) from the insurance company, they have agreed to allow the provider to file a claim and received the payment of that benefit directly. So if you indicate 'accept assignment' on the claim, you are only telling the insurance company that you have authorization from the patient to receive that payment and that it should be issued to the provider and not to the patient. It does not mean that you have agreed to accept the insurance company's fee schedule as payment in full. For some government-sponsored plans (e.g. Medicare and Advantage plans, Medicaid, TRICARE, work comp, etc.), there are laws that may require a provider to accept a fee as payment in full. But for commercial insurance plans, if your provider is not contracted with the company or plan, then the provider is not required to accept that fee as payment in full. If that is the case, then the patient can, and in many cases should, be billed for the balance due, unless there are other laws in the state where your provider practices which regulate what you can charge.  

• Aug 16, 2023

I would just add that if you are out of network, you should be providing the patient with an estimate per the federal No Surprises Act. The insurance will not negotiate their rate. The patient is the one responsible.  

vhofmeister

• Nov 7, 2023

Wow, this is incorrect information. The insurance will try to negotiate but at a low QPA rate. Then you send to the IDR. The patient is not responsible to negotiate!  

vhofmeister said: Wow, this is incorrect information. The insurance will try to negotiate but at a low QPA rate. Then you send to the IDR. The patient is not responsible to negotiate! Click to expand...

• Nov 8, 2023

Does your provider accept Medicare as full payment?

You can get the lowest cost if your doctor or other health care provider accepts the Medicare-approved amount  as full payment for a covered service. This is called “accepting assignment.” If a provider accepts assignment, it’s for all Medicare-covered Part A and Part B services.

Using a provider that accepts assignment

Most doctors, providers, and suppliers accept assignment, but always check to make sure that yours do.

If your doctor, provider, or supplier accepts assignment:

• Your out-of-pocket costs may be less.
• They agree to charge you only the Medicare deductible and coinsurance amount, and usually wait for Medicare to pay its share before asking you to pay your share.
• They have to submit your claim directly to Medicare and can't charge you for submitting the claim.

How does assignment impact my drug coverage?

Using a provider that doesn't accept Medicare as full payment

Some providers who don’t accept assignment still choose to accept the Medicare-approved amount for services on a case-by-case basis. These providers are called "non-participating."

If your doctor, provider, or supplier doesn't accept assignment:

• You might have to pay the full amount at the time of service.
• They should submit a claim to Medicare for any Medicare-covered services they give you, and they can’t charge you for submitting a claim. If they refuse to submit a Medicare claim, you can submit your own claim to Medicare. Get the Medicare claim form .
• They can charge up to 15% over the Medicare-approved amount for a service, but no more than that. This is called "the limiting charge."  

Does the limiting charge apply to all Medicare-covered services?

Using a provider that "opts-out" of Medicare

• Doctors and other providers who don’t want to work with the Medicare program may "opt out" of Medicare.
• Medicare won’t pay for items or services you get from provider that opts out, except in emergencies.
• Providers opt out for a minimum of 2 years. Every 2 years, the provider can choose to keep their opt-out status, accept Medicare-approved amounts on a case-by-case basis ("non-participating"), or accept assignment.

Find providers that opted out of Medicare.

Private contracts with doctors or providers who opt out

• If you choose to get services from an opt-out doctor or provider you may need to pay upfront, or set up a payment plan with the provider through a private contract.
• Medicare won’t pay for any service you get from this doctor, even if it’s a Medicare-covered service.

What are the rules for private contracts?

You may want to contact your  State Health Insurance Assistance Program (SHIP) for help before signing a private contract with any doctor or other health care provider.

What do you want to do next?

• Next step: Get help with costs
• Take action: Find a provider
• Get details: How to get Medicare services

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Medicare Assignment: Everything You Need to Know

Medicare assignment.

• Providers Accepting Assignment
• Providers Who Do Not
• Billing Options
• Assignment of Benefits
• How to Choose

Frequently Asked Questions

Medicare assignment is an agreement between Medicare and medical providers (doctors, hospitals, medical equipment suppliers, etc.) in which the provider agrees to accept Medicare’s fee schedule as payment in full when Medicare patients are treated.

This article will explain how Medicare assignment works, and what you need to know in order to ensure that you won’t receive unexpected bills.

fizkes / Getty Images

There are 35 million Americans who have Original Medicare. Medicare is a federal program and most medical providers throughout the country accept assignment with Medicare. As a result, these enrollees have a lot more options for medical providers than most of the rest of the population.

They can see any provider who accepts assignment, anywhere in the country. They can be assured that they will only have to pay their expected Medicare cost-sharing (deductible and coinsurance, some or all of which may be paid by a Medigap plan , Medicaid, or supplemental coverage provided by an employer or former employer).

It’s important to note here that the rules are different for the 29 million Americans who have Medicare Advantage plans. These beneficiaries cannot simply use any medical provider who accepts Medicare assignment.

Instead, each Medicare Advantage plan has its own network of providers —much like the health insurance plans that many Americans are accustomed to obtaining from employers or purchasing in the exchange/marketplace .

A provider who accepts assignment with Medicare may or may not be in-network with some or all of the Medicare Advantage plans that offer coverage in a given area. Some Medicare Advantage plans— health maintenance organizations (HMOs) , in particular—will only cover an enrollee’s claims if they use providers who are in the plan's network.

Other Medicare Advantage plans— preferred provider organizations (PPOs) , in particular—will cover out-of-network care but the enrollee will pay more than they would have paid had they seen an in-network provider.

Original Medicare

The bottom line is that Medicare assignment only determines provider accessibility and costs for people who have Original Medicare. People with Medicare Advantage need to understand their own plan’s provider network and coverage rules.

When discussing Medicare assignment and access to providers in this article, keep in mind that it is referring to people who have Original Medicare.

How to Make Sure Your Provider Accepts Assignment

Most doctors, hospitals, and other medical providers in the United States do accept Medicare assignment.

Provider Participation Stats

According to the Centers for Medicare and Medicaid Services, 98% of providers participate in Medicare, which means they accept assignment.

You can ask the provider directly about their participation with Medicare. But Medicare also has a tool that you can use to find participating doctors, hospitals, home health care services, and other providers.

There’s a filter on that tool labeled “Medicare-approved payment.” If you turn on that filter, you will only see providers who accept Medicare assignment. Under each provider’s information, it will say “Charges the Medicare-approved amount (so you pay less out-of-pocket).”

What If Your Provider Doesn’t Accept Assignment?

If your medical provider or equipment supplier doesn’t accept assignment, it means they haven’t agreed to accept Medicare’s approved amounts as payment in full for all of the services.

These providers can still choose to accept assignment on a case-by-case basis. But because they haven’t agreed to accept Medicare assignment for all services, they are considered nonparticipating providers.

Note that "nonparticipating" does not mean that a provider has opted out of Medicare altogether. Medicare will still pay claims for services received from a nonparticipating provider (i.e., one who does not accept Medicare assignment), whereas Medicare does not cover any of the cost of services obtained from a provider who has officially opted out of Medicare.

If a Medicare beneficiary uses a provider who has opted out of Medicare, that person will pay the provider directly and Medicare will not be involved in any way.

Physicians Who Have Opted Out

Only about 1% of all non-pediatric physicians have opted out of Medicare.

For providers who have not opted out of Medicare but who also don’t accept assignment, Medicare will still pay nearly as much as it would have paid if you had used a provider who accepts assignment. Here’s how it works:

• Medicare will pay the provider 95% of the amount they would pay if the provider accepted assignment.
• The provider can charge the person receiving care more than the Medicare-approved amount, but only up to 15% more (some states limit this further). This extra amount, which the patient has to pay out-of-pocket, is known as the limiting charge . But the 15% cap does not apply to medical equipment suppliers; if they do not accept assignment with Medicare, there is no limit on how much they can charge the person receiving care. This is why it’s particularly important to make sure that the supplier accepts Medicare assignment if you need medical equipment.
• The nonparticipating provider may require the person receiving care to pay the entire bill up front and seek reimbursement from Medicare (using Form CMS 1490-S ). Alternatively, they may submit a claim to Medicare on behalf of the person receiving care (using Form CMS-1500 ).
• A nonparticipating provider can choose to accept assignment on a case-by-case basis. They can indicate this on Form CMS-1500 in box 27. The vast majority of nonparticipating providers who bill Medicare choose to accept assignment for the claim being billed.
• Nonparticipating providers do not have to bill your Medigap plan on your behalf.

Billing Options for Providers Who Accept Medicare

When a medical provider accepts assignment with Medicare, part of the agreement is that they will submit bills to Medicare on behalf of the person receiving care. So if you only see providers who accept assignment, you will never need to submit your own bills to Medicare for reimbursement.

If you have a Medigap plan that supplements your Original Medicare coverage, you should present the Medigap coverage information to the provider at the time of service. Medicare will forward the claim information to your Medigap insurer, reducing administrative work on your part.

Depending on the Medigap plan you have, the services that you receive, and the amount you’ve already spent in out-of-pocket costs, the Medigap plan may pay some or all of the out-of-pocket costs that you would otherwise have after Medicare pays its share.

(Note that if you have a type of Medigap plan called Medicare SELECT, you will have to stay within the plan’s network of providers in order to receive benefits. But this is not the case with other Medigap plans.)

After the claim is processed, you’ll be able to see details in your MyMedicare.gov account . Medicare will also send you a Medicare Summary Notice. This is Medicare’s version of an explanation of benefits (EOB) , which is sent out every three months.

If you have a Medigap plan, it should also send you an EOB or something similar, explaining the claim and whether the policy paid any part of it.

What Is Medicare Assignment of Benefits?

For Medicare beneficiaries, assignment of benefits means that the person receiving care agrees to allow a nonparticipating provider to bill Medicare directly (as opposed to having the person receiving care pay the bill up front and seek reimbursement from Medicare). Assignment of benefits is authorized by the person receiving care in Box 13 of Form CMS-1500 .

If the person receiving care refuses to assign benefits, Medicare can only reimburse the person receiving care instead of paying the nonparticipating provider directly.

Things to Consider Before Choosing a Provider

If you’re enrolled in Original Medicare, you have a wide range of options in terms of the providers you can use—far more than most other Americans. In most cases, your preferred doctor and other medical providers will accept assignment with Medicare, keeping your out-of-pocket costs lower than they would otherwise be, and reducing administrative hassle.

There may be circumstances, however, when the best option is a nonparticipating provider or even a provider who has opted out of Medicare altogether. If you choose one of these options, be sure you discuss the details with the provider before proceeding with the treatment.

You’ll want to understand how much is going to be billed and whether the provider will bill Medicare on your behalf if you agree to assign benefits (note that this is not possible if the provider has opted out of Medicare).

If you have supplemental coverage, you’ll also want to check with that plan to see whether it will still pick up some of the cost and, if so, how much you should expect to pay out of your own pocket.

A medical provider who accepts Medicare assignment is considered a participating provider. These providers have agreed to accept Medicare’s fee schedule as payment in full for services they provide to Medicare beneficiaries. Most doctors, hospitals, and other medical providers do accept Medicare assignment.

Nonparticipating providers are those who have not signed an agreement with Medicare to accept Medicare’s rates as payment in full. However, they can agree to accept assignment on a case-by-case basis, as long as they haven’t opted out of Medicare altogether. If they do not accept assignment, they can bill the patient up to 15% more than the Medicare-approved rate.

Providers who opt out of Medicare cannot bill Medicare and Medicare will not pay them or reimburse beneficiaries for their services. But there is no limit on how much they can bill for their services.

A Word From Verywell

It’s in your best interest to choose a provider who accepts Medicare assignment. This will keep your costs as low as possible, streamline the billing and claims process, and ensure that your Medigap plan picks up its share of the costs.

If you feel like you need help navigating the provider options or seeking care from a provider who doesn’t accept assignment, the Medicare State Health Insurance Assistance Program (SHIP) in your state may be able to help.

A doctor who does not accept Medicare assignment has not agreed to accept Medicare’s fee schedule as payment in full for their services. These doctors are considered nonparticipating with Medicare and can bill Medicare beneficiaries up to 15% more than the Medicare-approved amount.

They also have the option to accept assignment (i.e., accept Medicare’s rate as payment in full) on a case-by-case basis.

There are certain circumstances in which a provider is required by law to accept assignment. This includes situations in which the person receiving care has both Medicare and Medicaid. And it also applies to certain medical services, including lab tests, ambulance services, and drugs that are covered under Medicare Part B (as opposed to Part D).

In 2021, 98% of American physicians had participation agreements with Medicare, leaving only about 2% who did not accept assignment (either as a nonparticipating provider, or a provider who had opted out of Medicare altogether).

Accepting assignment is something that the medical provider does, whereas assignment of benefits is something that the patient (the Medicare beneficiary) does. To accept assignment means that the medical provider has agreed to accept Medicare’s approved fee as payment in full for services they provide.

Assignment of benefits means that the person receiving care agrees to allow a medical provider to bill Medicare directly, as opposed to having the person receiving care pay the provider and then seek reimbursement from Medicare.

Centers for Medicare and Medicaid Services. Medicare monthly enrollment .

Centers for Medicare and Medicaid Services. Annual Medicare participation announcement .

Centers for Medicare and Medicaid Services. Lower costs with assignment .

Centers for Medicare and Medicaid Services. Find providers who have opted out of Medicare .

Kaiser Family Foundation. How many physicians have opted-out of the Medicare program ?

Center for Medicare Advocacy. Durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) updates .

Centers for Medicare and Medicaid Services. Check the status of a claim .

Centers for Medicare and Medicaid Services. Medicare claims processing manual. Chapter 26 - completing and processing form CMS-1500 data set .

Centers for Medicare and Medicaid Services. Ambulance fee schedule .

Centers for Medicare and Medicaid Services. Prescription drugs (outpatient) .

By Louise Norris Louise Norris has been a licensed health insurance agent since 2003 after graduating magna cum laude from Colorado State with a BS in psychology.

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What is Medicare assignment and how does it work?

En español  | Whether or not your doctors “accept assignment” determines how much you pay for their services.

Medicare decides how much to pay providers for covered services. Most doctors accept the Medicare-approved amount for services Medicare covers, even if it’s less than they usually charge. If the doctor agrees to the approved amount, he or she is accepting assignment.

A doctor who accepts assignment agrees to charge you no more than the amount Medicare has approved for that service. A doctor who participates in Medicare but doesn’t accept assignment can potentially charge you up to 15 percent more than the Medicare-approved amount.

When choosing new doctors, ask if they accept assignment before you receive care, even if they accept Medicare patients. If a doctor doesn’t accept assignment, you will pay more for that physician’s services compared with one who does.

How much do I pay if my doctor accepts assignment?

Because Medicare Part B covers doctor and outpatient services, your $226  deductible for Part B in 2023 applies before most coverage begins. If your doctor accepts assignment, then you generally pay 20 percent of the Medicare-approved amount for the service, called coinsurance, after you’ve paid the annual deductible.

All providers who accept assignment must submit claims directly to Medicare, which pays 80 percent of the approved cost for the service and will bill you the remaining 20 percent. You can get some preventive services and screenings, such as mammograms and colonoscopies, without paying a deductible or coinsurance if the provider accepts assignment. 

What if my doctor doesn’t accept assignment?

A doctor who takes Medicare but doesn’t accept assignment can still treat Medicare patients but won’t always accept the Medicare-approved amount as payment in full. This means he or she can charge you up to a maximum of 15 percent more than Medicare pays for the service you receive. In this case, you’re responsible for the additional charge, plus the regular 20 percent coinsurance, as your share of the cost.

How to cover the extra cost? If you have a Medicare supplement policy , better known as Medigap, it may cover the extra 15 percent, called Medicare Part B excess charges.

All Medigap policies cover Part B’s 20 percent coinsurance in full or in part. The F and G policies cover the 15 percent excess charges from doctors who don’t accept assignment.

If you’re new to Medicare, you can’t buy Medicare supplement Plan F as of 2020. But if you turned 65 by the end of 2019, you may be able to even if you haven’t enrolled yet.

Everyone enrolled in original Medicare can apply for Plan G. Keep in mind that Medigap policies only cover excess charges for doctors who accept Medicare but don’t accept assignment and they won’t cover costs for doctors who opt out of Medicare entirely.

How do I find doctors who accept assignment?

Before you start working with a new doctor, ask whether he or she accepts assignment. About 97 percent of providers billing Medicare are participating providers, which means they accept assignment on all Medicare claims, according to the Kaiser Family Foundation.

You can get help finding doctors and other providers in your area who accept assignment by using Medicare’s Physician Compare tool . You can look up doctors and other clinicians near your zip code.

Those who accept assignment have this note under the name: “Charges the Medicare-approved amount (so you pay less out of pocket).” However, not all doctors who accept assignment are accepting new Medicare patients.

What does it mean if a doctor opts out of Medicare?

Doctors who opt out of Medicare can’t bill Medicare for services you receive. They also aren’t bound by Medicare’s limitations on charges.

In this case, you enter into a private contract with the provider and agree to pay the full bill. Be aware that neither Medicare nor your Medigap plan will reimburse you for these charges.

While most doctors participate in Medicare, others, such as some psychiatrists, opt out. A Kaiser Family Foundation study found that only 1 percent of physicians who weren’t pediatricians formally opted out of Medicare in 2022, but 7.5 percent of psychiatrists had opted out.

Differences in what you pay for doctors’ services

The three ways that physicians deal with Medicare can drastically affect what you spend on care.

Note: Doctors who don’t accept assignment receive a Medicare-approved amount that is 5 percent less than those who accept assignment.

Source: Medicare, California Health Advocates, AARP research

Keep in mind

These rules apply to original Medicare. Other factors determine costs if you choose to get coverage through a private  Medicare Advantage plan . Most Medicare Advantage plans have provider networks, and they may charge more or not cover services from out-of-network providers.

Before choosing a Medicare Advantage plan, find out whether your chosen doctor or provider is covered and identify how much you’ll pay. You can use the  Medicare Plan Finder  to compare the Medicare Advantage plans and their out-of-pocket costs in your area.

Updated July 14, 2023

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Assignment and Nonassignment of Benefits - JE Part B

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Assignment and Nonassignment of Benefits

Under the Medicare program, there are two Medicare reimbursement options. They are Assignment and Nonassignment. Accepting assignment on a Medicare claim can be a definite advantage to both the physician/supplier and the beneficiary. The Medicare claim itself constitutes a legal agreement between the physician/supplier and the beneficiary which carries specific terms with it that must be observed.

Assignment of benefits applies to all participating providers (including ambulance providers and limited license practitioners who, are participating providers by statute and must accept assignment on all Medicare claims) and non-participating providers (who may accept assignment on a case-by-case basis). If the provider accepts assignment, the Medicare payment will be made directly to the provider. Under this method, the provider agrees to accept the Medicare approved amount as full payment for covered services.

Item 27 on the CMS-1500 claim form allows the provider to indicate whether they accept or do not accept assignment. When accepting assignment, the beneficiary may be billed for the 20% coinsurance, any unmet deductible and for services not covered by Medicare. The difference between the billed amount and the Medicare approved amount cannot be billed.

Note: The 20% coinsurance is based on 20% of the Medicare approved amount (not 20% of the billed amount). Private insurance policies usually will reimburse the beneficiary for the 20% coinsurance and the deductible. Some private insurance policies may reimburse the beneficiary for services not covered by Medicare.

On assigned claims, the physician/supplier is bound by the assignment agreement, even if no payment is issued as a result of the payment being applied toward the beneficiary's annual deductible. He/she must still accept Medicare's approved amount as payment in full.

It is possible for a physician/supplier to accept assignment on a partially paid bill. In this case the physician/supplier still must accept Medicare's allowed amount as their payment in full. If Medicare's allowed amount is less than the amount that the beneficiary has already paid, the physician/supplier must refund the difference to the beneficiary. If a physician/supplier delays submission of an assigned claim until no payment can be made, the physician/supplier may only collect the 20% coinsurance and any unmet deductible from the beneficiary.

A physician/supplier can collect charges from the beneficiary for services that are denied as not covered by Medicare even though assignment was accepted on the claim. Assignment cannot be canceled once the claim is processed and the carrier has sent a notice of determination to both parties. This also applies to all future resubmissions, adjustments, and appeals of the claim, in case of denial or underpayment. Participating physicians and suppliers may not cancel assignment as this would be a violation of the participation agreement.

If a physician/supplier consistently violates the assignment agreement, the carrier may, with concurrence of the Centers for Medicare & Medicaid Services (CMS), refuse to pay assigned claims submitted by that physician or supplier. Public Law 95-142 provides that any person who knowingly, willfully and repeatedly violates the assignment agreement shall be guilty of a misdemeanor and subject to a maximum fine of $10,000.00 and/or exclusion from the Medicare program for up to five years. This legislation also provides that when convicted of a criminal offense related to their involvement in Medicare or Medicaid, they will be suspended from participating in both programs.

Medicare carriers are required to report, and act on, any violation of the assignment agreement. A physician/supplier is in violation of the assignment agreement if they collect, or attempt to collect:

• More than the deductible or coinsurance amount, or
• A fee for the paperwork involved in filing the claim.

Physicians and suppliers contracting with billing agents are ultimately responsible for the activities of those agents. When assignment is accepted, the billing agent should not bill the beneficiary for any amount above the 20% coinsurance and any unmet deductible.

Nonassignment of Benefits

The second reimbursement method a physician/supplier has is choosing to not accept assignment of benefits. Under this method, a non-participating provider is the only provider that can file a claim as non-assigned. When the provider does not accept assignment, the Medicare payment will be made directly to the beneficiary.

The provider may bill the beneficiary no more than the limiting charge for covered services. Should the provider bill more than the limiting charge for a covered service, the provider will have violated the non-participating agreement and may be subject to fines or penalties. When a provider does not accept assignment on a Medicare claim, he/she is not required to file a claim to the beneficiary's secondary insurance.

An exception to the non-participating agreement is that non-participating providers are required by law to accept assignment when the beneficiary has both Medicare and Medicaid. Mandatory assignment of clinical laboratory services, ambulance services and drugs and biologicals is also a requirement. Medicare pays all clinical la b at 100% of the clinical lab fee schedule.

Last Updated Tue, 25 Oct 2022 20:17:09 +0000

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As a Medical Biller, the better you understand the medical insurance payment process, the better you can care for your patients. Your understanding of what a patient will owe and what will be covered can help them navigate the confusing world of medical insurance.

One term that can be very confusing for patients (and for doctors as well) is ‘Accepting Assignment’.

Essentially, ‘assignment’ means that a doctor, (also known as provider or supplier) agrees (or is required by law) to accept a Medicare-approved amount as full payment for covered services.

This amount may be lower or higher than an individual’s insurance amount, but will be on par with Medicare fees for the services.

If a doctor participates with an insurance carrier, they have a contract and agree that the provider will accept the allowed amount, then the provider would check “yes”.  

If they do not participate and do not wish to accept what the insurance carrier allows, they would check “no”.   It is important to note that a provider who does not participate can still opt to accept assignment on just a particular claim by checking the “yes” box just for those services.

In other words by saying your office will accept assignment, you are agreeing to the payment amount being covered by the insurer, or medicare, and the patient has no responsibility.

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