Participating in the Medicare program simply means that you agree to accept assignment for all services furnished to Medicare patients. By accepting assignment you agree to accept the amount approved by Medicare as total payment for covered services. The deductible and coinsurance are applied to covered services and the beneficiary is responsible for these amounts. If both Medicare and Medicaid cover a beneficiary, the Medicaid program assumes responsibility for these amounts.
When you enroll as a new provider, or re-enroll due to a tax ID number change you come in as a non-participating provider. If you do not wish to become a participating provider at the time of enrollment, you have 90 days from the date of your Provider Transaction Access Number (PTAN) notification to change your participation status. If a par agreement is received within 90 days of enrollment the PAR effective date will be the postmark date on the envelope.
If you decide to enroll as a Medicare participating provider after the 90-day grace period, you must wait and complete a form during open enrollment. You are obligated to remain a participant until the following annual enrollment period.
Advantages of Participating
- Your Medicare fee schedule amount is 5 percent higher than that of a non-participating provider.
- Collections from patients are much easier because Medicare pays 80 percent to the provider and you only need to collect 20 percent (co-payment) of the bill from the beneficiary.
- Medicare will automatically forward Medigap claims to the proper insurer for payment when you send in your completed claim form. This “one stop” billing eliminates the need for you to submit a separate bill to the supplementary insurer or beneficiary after receiving Medicare’s payment.
- Participation also improves your relationship with the beneficiary because it helps reduce the beneficiary’s out-of-pocket expenses.
If you choose not to become a participating provider in the Medicare program, you may choose either to accept or not accept assignment on Medicare claims on a claim-by-claim basis. If you choose not to accept assignment, you may not charge the beneficiary more than the Medicare limiting charge for unassigned claims for Medicare services.
The limiting charge applies to non-participating providers in the Medicare Part B program when they do not accept assignment. The limiting charge is 115 percent of the physician fee schedule amount. The beneficiary is not responsible for billed amounts in excess of the limiting charge for a covered service. Effective Jan. 1, 1994, the limiting charge applies to all services and supplies billed under the Physician Fee Schedule (including drugs and biologicals) regardless of the provider rendering the services.
If You Choose Not to Participate
If you choose not to participate in the Medicare program and do not accept assignment on your claims, the maximum amount you may charge is 115 percent of the approved fee schedule amount for non-participating providers. This amounts to only 9.25 percent more than the fee schedule amount for participating providers (115% x 95%). So in the following example, a non-participating provider would only receive $9.25 more than the participating provider would. Here is an example of how this works:
|Fee Schedule Amount = $95.00||Fee Schedule Amount = $100|
Limiting Charge Calculation
|115% x $95 = $109.25||None|
Most Each Can Collect
All unassigned claims from non-participating providers are monitored for compliance with the limiting charge provision and providers and beneficiaries are advised of any excess charges. Non-participating providers may accept assignment on a claim-by-claim basis, but these claims are approved at 95 percent of the participating physician fee schedule for the same service.
Breakeven Point For Non-Participating Providers
Because the maximum limiting charge is actually only 9.25% more than participating providers can collect, unless you collect the limiting charge balance on almost all patients, it may be more profitable for you to become a participating provider. It has been determined that a non-participating provider who accepts assignment on 64.9% of his or her Medicare claims must collect 100% of the limiting charge amount for non-assigned claims to earn the same amount that a participating doctor would earn. Even if you did not take assignment on any Medicare claims, you would need to collect 91.5% of your charges for the non-assigned claims to break even with a participating provider who filed the exact same claims and charges. If you choose to be a non-participating provider and accept assignment on more than 64.9% of Medicare claims, you will make less than if you were participating because of the Medicare limiting charge and 5% non-par reduction.
The table below illustrates this point. These figures, however, do not include office collection expenses or bad debts. Both actually lower the breakeven percentage.
Medicare Breakdown Analysis for Non-Participating Providers
|Percent of Medicare claims assigned
(Payment = 95% of PAR amount):
|Percent of non-assigned claims which must be collected to break even:|
Practitioner Mandatory Assignment
Under current Medicare law, if you are one of the following:
- Physician’s Assistant
- Nurse Practitioner
- Certified Registered Nurse Anesthetist
- Clinical Nurse Specialist
- Nurse Midwife
- Clinical Social Worker
- Clinical Psychologist
You are required to accept assignment for all services that you render to Medicare beneficiaries. Because you must accept assignment, you automatically receive the advantages of participation. Therefore, it is not necessary for you to complete a participating agreement when enrolling in the Medicare program.
Penalties for Violating Assignment Agreement
If you accept assignment, you agree to accept Medicare’s reasonable charge as the full charge for the service. You violate the assignment agreement if you collect or attempt to collect from the beneficiary or other person any amount other than coinsurance, non-covered charges or unmet deductible.
If you violate your assignment agreement, you could face one of the following penalties:
- Any person who accepts assignment and who “”knowingly, willfully, and repeatedly” violates the assignment agreement shall be guilty of a misdemeanor and subject to a fine of not more than $2,000 or imprisonment of not more than six months or both.
- CMS may exclude the provider from program participation and from any State health care programs.
- The statute provides for Civil Monetary Penalties (CMPs) of up to $2,000 per item or service claimed against any person who violates the assignment agreement.
- Remember that once you file a claim assigned, Medicare will treat that claim as assigned even if the assignment was billed in error.