Understanding “accept assignment” is crucial for anyone navigating Medicare billing, whether you are a healthcare provider or a patient. This concept dictates how much a provider is paid for services and, consequently, how much a patient might owe out-of-pocket. It plays a critical role in Medicare claims processing, specifically highlighted in Field 27 of the CMS 1500 form.

What Does ‘Accept Assignment’ Mean?

“Accept assignment” means that your healthcare provider agrees to accept the Medicare-approved amount as full payment for covered services. This amount includes what Medicare pays and any deductible or coinsurance that the patient is responsible for. When a provider accepts assignment, they are legally bound to not bill the patient for any amount above the Medicare-approved charge, other than the patient’s deductible and coinsurance.

Why is Accepting Assignment Important for Patients and Providers?

For Patients:

• Predictable Costs & Savings: Patients know their out-of-pocket costs will be limited to deductibles and coinsurance, preventing unexpected and often higher charges.
• Protection from Balance Billing: It safeguards patients from balance billing, which is the practice of a provider billing a patient for the difference between the provider’s charge and the Medicare-approved amount.
• Simplified Billing: Medicare sends its payment directly to the provider, simplifying the process for the patient.

For Providers:

• Direct Payment from Medicare: Providers who accept assignment receive their portion of the payment directly from Medicare, reducing administrative burden and ensuring timely payments.
• Attracting Medicare Patients: Accepting assignment can make a practice more appealing to the large population of Medicare beneficiaries, potentially increasing patient volume.
• Streamlined Administrative Process: It simplifies the claims submission and reimbursement process with Medicare.

Services and Providers Required to Accept Assignment (CMS Guidelines)

The Centers for Medicare & Medicaid Services (CMS) mandates that certain providers and services can only be paid on an assignment basis. This ensures beneficiaries receive these critical services without fear of excessive billing. According to official CMS guidelines, these include:

• Clinical diagnostic laboratory services;
• Physician services to individuals dually entitled to Medicare and Medicaid;
• Participating physician/supplier services;
• Services of physician assistants, nurse practitioners, clinical nurse specialists, nurse midwives, certified registered nurse anesthetists, clinical psychologists, and clinical social workers;
• Ambulatory surgical center services for covered ASC procedures;
• Home dialysis supplies and equipment paid under Method II;
• Ambulance services;
• Drugs and biologicals; and
• Simplified Billing Roster for influenza virus vaccine and pneumococcal vaccine.

How Accepting Assignment Affects Medigap and Supplemental Insurance

For patients who have a Medigap policy (Medicare Supplement Insurance), accepting assignment is particularly important. As indicated in items 9 and 13 of the CMS 1500 form, if Medigap is involved and payment authorization is given, the provider is required to be a Medicare participating provider and accept assignment of Medicare benefits for all covered charges for that patient. This means your Medigap policy can then pay the Medicare coinsurance and deductibles, leaving you with little to no out-of-pocket costs. If a provider does not accept assignment, your Medigap policy may not cover the excess charges, leaving you responsible for more of the bill.

Consequences of Not Accepting Assignment: Understanding Balance Billing

While most providers accept assignment, some providers choose not to participate in Medicare. These are known as “non-participating providers.” Non-participating providers can still treat Medicare patients, but they are not required to accept the Medicare-approved amount as full payment. However, even non-participating providers cannot charge unlimited amounts. They are subject to the “Medicare Limiting Charge,” which is typically 15% above the Medicare-approved amount for non-assigned claims. If a non-participating provider does not accept assignment, they can balance bill the patient up to this limiting charge. Patients would then be responsible for the deductible, coinsurance, and the balance-billed amount up to the limiting charge. In such cases, Medicare pays the patient directly for its share, and the patient then pays the provider.

For detailed information on assignment rules and billing requirements, refer to official resources such as the Medicare Claims Processing Manual, Chapter 1 – General Billing Requirements for Providers/Suppliers, Section 30 (Assignment), available on CMS.gov. This manual provides comprehensive guidance on these critical billing practices.