What Medicare Assignment Is and How It Impacts You

If a doctor or other healthcare provider accepts a Medicare assignment for a particular service, a patient covered by Medicare will likely have to pay less out of pocket for that service. Accepting Medicare assignment means the healthcare provider has agreed to charge no more than the amount Medicare approved for that service. It also means the doctor agreed to bill Medicare rather than charging you directly. Providers who don’t accept assignments can charge 15% more and require immediate payment from the patient. A financial advisor can help you develop a financial strategy to pay for your healthcare.

Medicare Assignment Basics

Medicare is the government-sponsored national healthcare plan for about 63 million Americans over age 65. Original Medicare is the fee-for-service plan that includes Medicare Part A, which covers hospital costs. And it also includes Medicare Part B, which pays for other healthcare services, including doctor’s office visits.

Almost all doctors accept patients covered by Medicare. And almost all doctors who take Medicare patients accept Medicare assignments. Doctors who accept Medicare assignments are also known as assignment providers, participating providers and Medicare-enrolled providers.

A Medicare assignment provider agrees to charge no more than the Medicare-approved price for a specific service. The doctor or other provider also agrees to bill Medicare directly, rather than charging the patient on the day of service. This means that if you go to a Medicare-participating provider, you won’t usually have to pay anything at the time of service. And you will likely pay less out-of-pocket when all is said and done.

While Medicare assignment is relevant to people covered by Original Medicare, it doesn’t affect people covered by Medicare Advantage plans. These plans have their own rules.

How Medicare Assignment Affects Your Cost

Doctors and other providers who don’t accept Medicare may charge as much as 15% more than the Medicare-approved amount. The exact percentage varies by state. If you go to a non-accepting provider, you may have to pay the extra over the Medicare-approved amount, plus the 20% share of the cost Medicare passes on to all Medicare-insured patients.

For example, consider a visit to an occupational therapist who charges $120 for a treatment session. The Medicare-approved cost of the service is $100.

If the therapist accepts the Medicare assignment, they will charge you $100 and bill Medicare. After Medicare pays $100, you’ll owe 20%, or $20 for coinsurance. That’s if you have already met your Part B deductible. If not, Medicare may not pay anything, up to the amount of the deductible, and you may be responsible for the entire bill.

If the therapist does not accept Medicare assignment, they may charge 15% more than the Medicare-approved amount, or $115. Plus they may ask you to pay the entire amount. If that happens, you have to file with Medicare to get reimbursement.

Whether you or the provider sends the invoice to Medicare, Medicare will pay only 80% of the approved amount, or $80. Your out-of-pocket costs in this case will be $120 minus $80, or $35 instead of $20.

Finding Medicare Assignment Providers

Nearly all healthcare providers accept Medicare assignments. One way to check is to use Medicare’s online tool. You can filter these searches for, among other things, whether the provider accepts Medicare assignments.

You can also ask the provider whether they accept Medicare when you visit. In addition, you may also request information in advance detailing how much they’ll bill Medicare for the service and how much you’ll be expected to pay at the time of the visit.

Bottom Line

Medicare assignment means a doctor or other healthcare provider will charge no more than the Medicare-approved amount for a particular service. This usually means lower out-of-pocket costs for patients who are covered by Medicare. It also means the provider will bill Medicare rather than expecting the patient to pay the full amount at the time of service. Nearly all doctors accept Medicare assignments. But to be sure, you can check Medicare’s provider search tool for more information or ask before your next doctor’s visit.

Healthcare Tips

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Healthcare costs can be a significant issue for retirees. How big an issue? Median out-of-pocket retiree healthcare costs for 2018 came to $4,311, according to one study. That means after Medicare or other insurance paid everything it would pay, the retiree had to come up with that much in cash to pay for healthcare in that one year alone. That’s why having a plan to pay for healthcare is an important part of retirement planning.