How does Medicare assignment work?
For every procedure and service covered by Medicare, there is a Medicare-approved price. This price is the total amount that Medicare will cover, also known as Medicare allowable charges. However, each doctor who accepts Medicare has the option to choose whether or not they want to accept Medicare’s allowable charges or not. Those that do accept Medicare “assignment.”
The first choice that doctors have is whether to accept Medicare or not. If they choose to accept Medicare, then they have another choice to make. They also get to choose whether they want to accept Medicare’s allowable charges as full payment. If they do accept Medicare’s price, that means they accept Medicare assignment. Accepting assignment also means the provider will bill Medicare on your behalf.
On the other hand, if they don’t accept Medicare assignment, then they are allowed to charge the patient up to 15% more than Medicare’s allowable charges. That 15% is called excess charges.
For example, if you see a doctor who doesn’t accept Medicare assignment and get a service done for which Medicare’s approved price is $100, the doctor can charge you up to $15 extra.
The best way to avoid being charged excess charges is to only see doctors who accept Medicare assignment. Also, keep in mind that durable medical equipment (DME) suppliers also get to choose whether they want to accept Medicare assignment or not.
Remember, just because they accept Medicare does not mean they accept Medicare assignment. Once you have verified that they accept Medicare assignment, you need to make sure to check with them frequently to make sure they are still accepting Medicare assignment. This is because doctors and suppliers can choose to no longer accept Medicare assignment at any time during the year.
States Without Excess Charges
There are, however, a few states that prohibit excess charges and require the doctors to accept Medicare’s approved price for each service and procedure. Those states are as follows:
- New York
- Rhode Island
Each state may have its own rules on Medicare excess charges. For instance, Connecticut has a specific program you must be a part of to be exempt from excess charges.
So, if you live in one of the states listed above, be sure to review their specific rules.
Medigap Plans & Excess charges
A Medigap plan is a type of Medicare plan that helps cover expenses left behind by Part A and Part B. For example, Medigap plans cover deductibles, coinsurance, copays, and even excess charges.
Medigap plans F and Plan G both cover your Part B excess charges for you. With one of these Medigap plans, you can see any doctor who accepts Medicare, and you won’t have to worry about being charged more than Medicare’s approved price.
There are currently eight other Medigap plan options. However, none of those cover excess charges. If you have a Medigap plan that doesn’t cover excess charges, such as Plan N, be sure to verify with your doctors and suppliers whether or not they accept Medicare assignment.
Medicare beneficiaries usually only get one chance to enroll in a Medigap plan without passing medical underwriting, which involves reviewing your medical history. This window starts the day you are both age 65 or over and enrolled in Part B and ends six months later. If you miss this Medigap open enrollment window, you could be denied coverage due to your health conditions.