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Seeing a Doctor 'on Assignment' can Lower Your Medicare Costs

What Medicare pays, what you pay when you see a doctor 'on assignment' versus other scenarios

Q. What does seeing a doctor “on assignment” mean?

A.  When you’re enrolled in traditional Medicare and go to any new doctors for the first time, always ask whether they accept Medicare patients and, if so, whether they accept assignment. Their answers to these questions affect how much you pay:

  • A doctor who accepts assignment is agreeing to charge you no more than the amount Medicare pays for the service you receive. Medicare pays 80 percent of this amount, and you pay 20 percent (after you’ve met your annual Part B deductible). The doctor bills Medicare directly, as you are “assigning” Medicare to pay the doctor for your care.

  • The preventive services that Medicare now provides for free (such as mammograms, colonoscopies, heart disease screenings and many others) are free of charge only if they’re provided by a doctor or other qualified health provider who accepts assignment. 

  • A doctor who does not accept assignment can charge you up to a maximum of 15 percent more than Medicare pays for the service you receive.

  • A doctor who has opted out of Medicare cannot bill Medicare for services you receive and is not bound by Medicare’s limitations on charges. You enter into a private contract with the doctor, agreeing to pay his or her bills directly. You cannot claim reimbursement from Medicare under this arrangement.

The chart shows an example of what Medicare pays and what you pay under each of these scenarios:

Doctor accepts assignment Doctor does not
accept assignment
Doctor has opted out of Medicare
Doctor’s bill $120 $120 $120
Amount Medicare approves $100 $100 NA
Medicare pays $80 (80%) $80 (80%) $0
You pay $20 (20%) $20 (20%) $120
Additional charge above Medicare-approved amount $0 $15 (maximum
15% in excess of amount Medicare approves)
You pay in total $20 $35 $120

The same rules apply not just to doctors but also to most other outpatient providers. However, suppliers of durable medical equipment (such as wheelchairs and oxygen equipment) that don’t accept assignment are not bound by Medicare’s limits rule on charges and are allowed to bill you more than 15 percent above the Medicare-approved amount.

These rules affect you only if you’re in traditional Medicare. If you’re enrolled in a Medicare private health plan, you pay what your plan requires, as explained in the plan’s information packet and on its website.

To find doctors in your area who participate in Medicare (including those who accept assignment on all claims), go to Medicare's "Physician Compare" website. Or call the Medicare help line at 1-800-633-4227.

Patricia Barry is a senior editor for AARP Integrated Media and the author of “Medicare For Dummies” (Wiley/AARP, October 2013).

Also of interest: How would you strengthen Medicare?