Understanding Medicare Assignment When Looking For a New Provider

Let’s face it, finding a new provider can be difficult. From long wait times, reading reviews, to getting recommendations, you never know what the actual experience feels like until you’ve had your initial consultation.  On top of that, figuring out whether a provider takes your Medicare insurance and knowing what you’ll pay can often seem like a game of the Price is Right.  

To understand whether a provider takes your Medicare insurance and whether you’ll have any surprise charges often boils down to understanding the 3 network categories that providers fall into.

1. The provider doesn’t take Medicare

Although the majority of providers still take Medicare, many primary care providers and mental health providers are slowly transitioning to cash-based practices.  If your provider does not take Medicare insurance in general, you’re out of luck.  Even if your Medicare plan (whether it’s a PPO or fee for service) allows you to see out-of-network providers, they must in general have to accept Medicare in order to be compensated as out of network.  If your provider does not take any Medicare insurance, then you’re left with paying the full bill as the only option.

2. The provider takes Medicare but doesn’t take Medicare Assignment

Just because a provider accepts Medicare doesn’t mean that you won’t receive any surprise charges.  By accepting Medicare, the provider agrees to see Medicare patients and will receive some form of compensation from Medicare.  However, there’s an additional caveat: Medicare assignment.

Medicare assignment is when a provider not only takes Medicare but agrees to what Medicare decides as reasonable payment.  For Original Medicare, providers taking Medicare assignment will just bill the Medicare negotiated allowable fee.  For Medicare Advantage plans with networks, providers who agree to the plan’s fee structure will simply charge the co-pays on your plan.  

However, if a provider does not take Medicare assignment, then you as a patient could potentially be billed excess charges equivalent to up to 15% of what Medicare would pay.  

For example:

Medicare lists an office visit as worth $100.

Part B covers 80% of the cost.

Your cost would be 20% or $20 in this case. (if you have a supplement, this cost may be partially or fully covered)

If your provider doesn’t agree to the assignment, they can charge up to $115 (15% extra) for the visit. 

Part B will only cover 80% of the $100, meaning you’re responsible for not only 20%, but also the extra 15% excess charge. 

Some supplemental policies will cover the surcharge while others will not.  If you have a Medicare Advantage plan, you’ll have to check with your plan if an out of network provider will bill excess charges. 

There are also states where excess charges are not allowed. These are Connecticut, Massachusetts, Minnesota, New York, Ohio, Pennsylvania, Rhode Island, and Vermont. 

In these states, if the provider takes Medicare, they have to accept Medicare assignment. 

3. The provider takes Medicare and takes Medicare Assignment 

Your provider takes both Medicare and Medicare assignment (more than 90% of providers), then your co-pays will be simply the fee that your supplement or Advantage plans dictate. 

Although most Medicare providers take Medicare assignment, it’s always prudent to double check when choosing a new provider.