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What is Medicare assignment and how does it work?

En español | Whether or not your doctors “accept assignment” determines how much you pay for their services.

Medicare decides how much to pay providers for covered services. Most doctors accept the Medicare-approved amount for services Medicare covers, even if it’s less than they usually charge. If the doctor agrees to the approved amount, he or she is accepting assignment.

A doctor who accepts assignment agrees to charge you no more than the amount Medicare has approved for that service. A doctor who participates in Medicare but doesn’t accept assignment can potentially charge you up to 15 percent more than the Medicare-approved amount.

When choosing new doctors, ask if they accept assignment before you receive care, even if they accept Medicare patients. If a doctor doesn’t accept assignment, you will pay more for that physician’s services compared with one who does.

How much do I pay if my doctor accepts assignment?

Because Medicare Part B covers doctor and outpatient services, your $233 deductible for Part B in 2022 applies before most coverage begins. If your doctor accepts assignment, then you generally pay 20 percent of the Medicare-approved amount for the service, called coinsurance, after you’ve paid the annual deductible.

All providers who accept assignment must submit claims directly to Medicare, which pays 80 percent of the approved cost for the service and will bill you the remaining 20 percent. You can get some preventive services and screenings, such as mammograms and colonoscopies, without paying a deductible or coinsurance if the provider accepts assignment. 

What if my doctor doesn’t accept assignment?

A doctor who takes Medicare but doesn’t accept assignment can still treat Medicare patients but won’t always accept the Medicare-approved amount as payment in full. This means he or she can charge you up to a maximum of 15 percent more than Medicare pays for the service you receive. In this case, you’re responsible for the additional charge, plus the regular 20 percent coinsurance, as your share of the cost.

How to cover the extra cost? If you have a Medicare supplement policy, better known as Medigap, it may cover the extra 15 percent, called Medicare Part B excess charges.

All Medigap policies cover Part B’s 20 percent coinsurance in full or in part. The F and G policies cover the 15 percent excess charges from doctors who don’t accept assignment.

If you’re new to Medicare, you can’t buy Medicare supplement Plan F as of 2020. But if you turned 65 by the end of 2019, you may be able to even if you haven’t enrolled yet.

Everyone enrolled in original Medicare can apply for Plan G. Keep in mind that Medigap policies only cover excess charges for doctors who accept Medicare but don’t accept assignment and they won’t cover costs for doctors who opt out of Medicare entirely.

How do I find doctors who accept assignment?

Before you start working with a new doctor, ask whether he or she accepts assignment. About 97 percent of providers billing Medicare are participating providers, which means they accept assignment on all Medicare claims, according to the Kaiser Family Foundation.

You can get help finding doctors and other providers in your area who accept assignment by using Medicare’s Physician Compare tool. You can look up doctors and other clinicians near your zip code.

Those who accept assignment have this note under the name: “Charges the Medicare-approved amount (so you pay less out of pocket).” However, not all doctors who accept assignment are accepting new Medicare patients.

What does it mean if a doctor opts out of Medicare?

Doctors who opt out of Medicare can’t bill Medicare for services you receive. They also aren’t bound by Medicare’s limitations on charges.

In this case, you enter into a private contract with the provider and agree to pay the full bill. Be aware that neither Medicare nor your Medigap plan will reimburse you for these charges.

While most doctors participate in Medicare, others, such as some psychiatrists, opt out. A Kaiser Family Foundation study found that only 1 percent of physicians who weren’t pediatricians formally opted out of Medicare in 2022, but 7.5 percent of psychiatrists had opted out.

Differences in what you pay for doctors’ services

The three ways that physicians deal with Medicare can drastically affect what you spend on care.

  Doctor accepts assignment  Doctor doesn’t accept assignment Doctor opts out of Medicare
Doctor bill $120 $120 $120
Amount Medicare approves $100 $95 Not applicable
Medicare pays (80%) $80 (80%) $76 $0
You pay (20%) $20 (20%) $19 $120
Additional charge above Medicare-approved amount $0 (Maximum 15% beyond what Medicare approves) $14.25 Not applicable
What the doctor receives $100 $109.25 $120
You pay in total $20 $33.25 $120

Note: Doctors who don’t accept assignment receive a Medicare-approved amount that is 5 percent less than those who accept assignment.

Source: Medicare, California Health Advocates, AARP research

Keep in mind

These rules apply to original Medicare. Other factors determine costs if you choose to get coverage through a private Medicare Advantage plan. Most Medicare Advantage plans have provider networks, and they may charge more or not cover services from out-of-network providers.

Before choosing a Medicare Advantage plan, find out whether your chosen doctor or provider is covered and identify how much you’ll pay. You can use the Medicare Plan Finder to compare the Medicare Advantage plans and their out-of-pocket costs in your area.

Updated Sept. 2, 2022



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