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Accepting assignment

Accepting assignment details for the Medicare Supplement Plan Option

Q. What does it mean if a doctor accepts assignment?

A. There are basically three Medicare contractual options for physicians. Physicians may sign a participating agreement and accept Medicare's allowed charge as payment in full for all of their Medicare patients. They may elect to be a non-participating physician, which permits them to make assignment decisions on a case-by-case basis and to bill patients for more than the Medicare allowance for unassigned claims. Or they may become a private contracting physician, agreeing to bill patients directly and forego any payments from Medicare to their patients or themselves. If your doctor or other health care providers accept assignment, they accept the amount Medicare approves as payment in full for that service or supply. You must still pay the difference between the Medicare-approved amount and the amount Medicare and the Plan pay (percentage copayment). 

If a doctor does not accept assignment, you may be required to pay the full amount of the bill when you receive the service. Medicare will then reimburse you for its share of the bill.

All doctors and medical suppliers must accept assignment in some situations, for example, for clinical laboratory services covered by Medicare.

Limiting charge

Medicare sets a limiting charge which is 15% of 95% of Medicare's approved payment amount. As a general rule, doctors and other health care providers who do not accept assignment for a particular service may not require you to pay more than 9.25% over the 100% Medicare-approved amount for that service. Under provisions of the Social Security Act Amendments of 1994, you are not liable for and do not owe amounts billed in these cases which are in excess of Medicare's limiting charge (109.25% of the Medicare-approved amount). In cases where a physician is a non-participating Medicare provider, the plan benefit amount will be calculated using the Medicare limiting charge (see example 2 below).

Medicare Opt-Out Providers

Exceptions to the above limits are services you get from doctors with whom you have a private contract, or for certain items and services, such as vaccinations, ambulance services and durable medical equipment. A private contract is an agreement between you and your doctor who has decided not to give services through the Medicare program. These physicians are referred to as opt out physicians because they have opted out of the Medicare system. Private contracts must meet the following specific requirements:

  • THE PHYSICIAN MUST SIGN AND FILE AN AFFIDAVIT AGREEING TO FOREGO RECEIVING ANY PAYMENT FROM MEDICARE FOR ITEMS OR SERVICES PROVIDED TO ANY MEDICARE BENEFICIARY FOR THE FOLLOWING 2-YEAR PERIOD (either directly, on a capitated basis, or from an organization that received Medicare reimbursement directly or on a capitated basis),
  • Medicare does not pay for the services provided or contracted for,
  • the contract must be in writing and must be signed by you before any item or service is provided,
  • the contract cannot be entered into at a time when you are facing an emergency, or an urgent health situation.

In addition, the contract must state unambiguously that by signing the private contract, you:

  • give up all Medicare payment for services furnished by the opt out physician,
  • agree not to bill Medicare or ask the physician to bill Medicare,
  • are liable for all of the physician's charges, without any Medicare balance billing limits,
  • acknowledge that Medigap or any other supplemental insurance will not pay toward the services, and
  • acknowledge that you have the right to receive services from physicians for whom Medicare coverage and payment would be available.

If you enter into such a private contract, Medicare will pay nothing toward the cost of care and the Plan may pay up to 80% of reasonable and customary charges for eligible covered expenses upon receipt of an itemized bill and a copy of the letter from Medicare to the physician approving the physician’s Medicare opt-out status.


Example 1 — A Medicare participating (MED-PAR) physician:

MED-PAR physicians are required to take assignment on all Medicare claims. In this example, the MED-PAR physician must accept the Medicare-approved amount. The physician's regular fee for this service is $120. The Medicare-approved amount for this service is $100. You have met all the deductibles for the year.

How the benefit is calculated

Medicare pays 80% of its approved amount directly to the physician.

$100 x .80 = $80

Aetna takes the Medicare-approved amount, calculates the Plan's 80% benefit, and subtracts the amount Medicare pays. The Plan's benefit is calculated as follows:

$100 x .80 = $80

$80 - $80 = $ 0

The results

Payment of the physician's fee is as follows:

Medicare pays $ 80.00
The Plan pays 0
You pay ($100 x .2) + $ 20.00
Total $ 100.00

The payments total $100. Because the physician is a MED-PAR physician who must accept assignment he or she, in effect, reduces the original fee by $20.

Example 2 — A Medicare non-participating (Non-Med-Par) physician

We changed the preceding example in two important ways: The physician is a non-MED-PAR physician who determines whether to accept Medicare assignment on a case by case basis. In this situation, the non-MED-Par physician does not accept assignment and submits a fee of $120. The Medicare-approved amount for this service for a non-MED-PAR physician (whether or not assignment is accepted) is 95% of $100 or $95. Medicare's limiting charge for non-MED-PAR physicians is 115% of the Medicare-approved amount ($95) or $109.25.

How the benefit is calculated

Medicare pays 80% of its approved amount. Medicare pays:

$ 95 x .80 = $ 76.00
The Plan calculated benefit is 80% of Medicare’s limiting charge
($ 109.25). The Plan’s benefit is calculated as follows:
$ 109.25 x .80 = $ 87.40
This amount is reduced by Medicare’s payment. The Plan then pays:
$ 87.40 - $ 76.00 = $ 11.40

The results

You will pay the physician's fee of $109.25 (the full limiting charge) at the point of service and either you or the physician's office will need to file the claim with Medicare. Payment of the physician's fee is as follows:

Medicare reimburses you $ 76.00
The Plan pays $ 11.40
You pay your physician ($109.25 less $87.40) + $ 21.85
Total $ 109.25

Example 3 — A physician with whom you have a private contract (opt-out physician)

We changed the preceding example in one important way: You have signed a private contract with the physician who submits a fee of $120. Since the Medicare-approved amount is not available, the Plan bases payment on reasonable and customary charges. The reasonable and customary amount for this service is $110. The Plan pays 80% of reasonable and customary charges or in this case $88.

The results

Payment of the physician's fee is as follows:

Medicare pays $ 0.00
The Plan pays $ 110.00 x .80 $ 88.00
You pay your physician + $ 32.00
Total $ 120.00

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