When you use your Original Medicare benefits, you expect your coverage to work in a straightforward way. You visit the doctor, you pay your share, and Medicare pays its share. However, many beneficiaries are surprised to receive a bill for more than they expected. This often comes down to one important term: Medicare Assignment.
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Understanding what Medicare Assignment is, and what it means when a doctor does or does not accept it, is one of the most important things you can do to control your healthcare costs. This guide will explain this concept, how it affects your wallet, and how you can protect yourself from unexpected charges.
What Is Medicare Assignment?
In simple terms, Medicare Assignment is an agreement between a healthcare provider and Medicare. When a provider accepts assignment, they agree to accept the Medicare-approved amount as full payment for a covered service.
When you see a provider who accepts assignment, you are only responsible for your Medicare Part B deductible (if it has not been met for the year) and your 20% coinsurance. Medicare pays its 80% share directly to the provider, and the provider cannot charge you a penny more than the approved amount.
There are three types of providers in the Medicare system:
- Participating Providers: These doctors have signed an agreement to always accept Medicare Assignment for all services they provide to Medicare beneficiaries. The vast majority of doctors are in this category.
- Non-Participating Providers: These doctors are still enrolled in Medicare but have not signed the agreement to always accept assignment. They can decide whether to accept it on a case-by-case, service-by-service basis. This is where things can become costly.
- Opt-Out Providers: These doctors have formally opted out of the Medicare program entirely. They do not bill Medicare for any services. You are responsible for 100% of the bill, and Medicare will not reimburse you.
How Medicare Pays Providers Who Accept Assignment
When you visit a participating provider, the process is seamless.
- The provider’s office submits your claim directly to Medicare.
- Medicare pays its 80% share of the approved amount to the provider.
- The provider (or Medicare) then bills you or your secondary insurance (like a Medigap plan) for the remaining 20% coinsurance.
This process ensures your out-of-pocket costs are predictable and limited to the standard deductibles and coinsurance.
What Happens If a Provider Does Not Accept Medicare Assignment?
This is the most critical question for your finances. If you see a non-participating provider and they choose not to accept assignment for your service, they are allowed to charge you more than the Medicare-approved amount.
This extra fee is known as a “Part B excess charge” or a “Limiting Charge.”
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By federal law, this excess charge is limited to 15% above the amount Medicare has approved for the service. While some states have stricter rules and may prohibit excess charges, most states permit them.
If your provider does not accept assignment, you may also be required to pay the entire bill upfront at the time of service. The provider will then submit the claim to Medicare, and Medicare will send its 80% reimbursement check directly to you, leaving you to cover the 20% coinsurance plus the 15% excess charge.
How to Check If a Doctor Accepts Medicare Assignment
The last thing you want is a financial surprise after a medical appointment. The good news is that you can check a provider’s status ahead of time.
- Ask the Right Question: When you call to make an appointment, do not just ask, “Do you take Medicare?” Almost all doctors “take” Medicare. The specific question to ask is, “Do you accept Medicare Assignment?” If they are a participating provider, the answer will be a simple “yes.” If they are non-participating, they might say, “We can, but it depends on the service.”
- Use the Medicare.gov Tool: The official “Care Compare” tool on Medicare’s website is your best resource. You can search for doctors and clinicians in your area, and the results will clearly show which providers accept Medicare Assignment.
For more details on this process, you can read our guide on how to find doctors that accept Medicare: Selecting Medicare Doctors Accepting Assignment: A Beneficiary’s Guide.
Why Medicare Assignment Matters Financially
Let’s look at a simple example to see how much excess charges can cost.
Imagine you have met your Part B deductible and you go to a specialist for a procedure that has a Medicare-approved amount of $500.
- Provider ACCEPTS Assignment:
- Medicare pays 80%: $400
- You pay 20% coinsurance: $100
- Total bill: $500
- Provider DOES NOT Accept Assignment:
- Medicare-approved amount: $500
- Provider can charge up to 15% extra: $75 (the excess charge)
- Your 20% coinsurance (on the $500): $100
- You are responsible for: $100 (coinsurance) + $75 (excess charge) = $175
In this scenario, seeing a provider who does not accept assignment costs you 75% more out of pocket for the exact same service.
Medicare Advantage and Medicare Assignment: Does It Still Apply?
It is important to know that Medicare Assignment is an Original Medicare term. It does not apply to Medicare Advantage (Part C) plans.
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Medicare Advantage plans operate differently. They use provider networks, such as HMOs or PPOs. Your costs are determined by whether your doctor is “in-network” or “out-of-network” for your specific plan. If you go out-of-network with an MA plan, you can face significantly higher costs or, in many cases, have no coverage at all for the service.
You can learn more by reading our explanation of Medicare Advantage provider networks.
How Medigap (Supplement) Can Help
This is where Medicare Supplement (Medigap) plans provide incredible value and peace of mind. Medigap plans work with Original Medicare to pay for your share of the costs, such as the 20% coinsurance.
Better yet, two specific Medigap plans also cover 100% of Medicare Part B excess charges:
- Medigap Plan G
- Medigap Plan F (only available to those eligible for Medicare before January 1, 2020)
If you have Medigap Plan G, you are protected from excess charges. You can see any doctor in the country who accepts Medicare-even a non-participating provider-and you will never have to worry about paying a 15% excess charge. The Medigap plan pays it for you.
This benefit gives you the ultimate freedom to choose your doctors without fearing a surprise bill.
