Understanding ‘Accept Assignment’ on the CMS 1500 Form
Field 27 on the CMS 1500 claim form, labeled “Accept Assignment,” is a critical element in Medicare billing that defines the financial relationship between a healthcare provider, Medicare, and the beneficiary. Understanding this field is essential for all providers submitting claims to Medicare, as it directly impacts reimbursement and patient financial responsibility.
What Does ‘Accept Assignment’ Mean?
When a provider checks “Yes” in Field 27, they agree to “accept assignment.” This means the provider accepts Medicare’s approved amount for a service as full payment. By accepting assignment, the provider agrees to:
- Charge the beneficiary only the Medicare deductible and coinsurance amounts.
- Forgo balance billing the beneficiary for any amount above the Medicare-approved charge.
- Receive payment directly from Medicare.
For the beneficiary, accepting assignment offers significant benefits, primarily limiting their out-of-pocket costs to the deductible and coinsurance. It provides predictable costs and protects them from potentially higher charges.
How to Indicate Assignment on Field 27
Item 27 requires the provider of service or supplier to check the appropriate block to indicate whether they accept assignment of Medicare benefits for the billed services. This decision has significant financial and administrative implications for both the provider and the patient.
A specific rule applies when Medigap insurance is involved: If Medigap is indicated in item 9 and Medigap payment authorization is given in item 13, the provider or supplier must be a Medicare **participating provider** and must accept assignment of Medicare benefits for all covered charges for all patients. This ensures that beneficiaries with Medigap coverage receive the maximum benefit coordination.
When Acceptance of Assignment is Mandatory
For certain types of providers and services, accepting assignment is not optional; it is mandated by Medicare billing guidelines. This ensures beneficiaries receive necessary care without excessive financial burden and promotes standardized billing practices. The following services and provider types can only be paid on an assignment basis:
- Clinical diagnostic laboratory services: Mandatory assignment helps to control costs and ensure that patients have access to essential diagnostic testing without fear of exorbitant charges.
- Physician services to individuals dually entitled to Medicare and Medicaid: For these **dual eligible beneficiaries**, accepting assignment protects a vulnerable population from balance billing and simplifies the complex billing process between the two programs.
- Participating physician/supplier services: By definition, a **Medicare participating provider** has signed an agreement with Medicare to always accept assignment for all Medicare-covered services.
- Services of non-physician practitioners: This includes physician assistants, nurse practitioners, clinical nurse specialists, nurse midwives, certified registered nurse anesthetists, clinical psychologists, and clinical social workers. Mandatory assignment helps standardize billing and ensure consistent patient financial responsibility for services provided by these professionals.
- Ambulatory surgical center (ASC) services for covered ASC procedures: These services often have predetermined payment rates, and mandatory assignment helps maintain cost-effectiveness and transparency for common surgical procedures performed in an outpatient setting.
- Home dialysis supplies and equipment paid under Method II: This specific payment method for dialysis services requires assignment to ensure appropriate reimbursement and patient access to necessary supplies and equipment.
- Ambulance services: Due to the often emergent nature of these services, mandatory assignment protects patients from unexpected high bills during critical situations.
- Drugs and biologicals: Many drugs and biologicals covered under Medicare Part B are subject to specific pricing rules, and mandatory assignment helps ensure that beneficiaries are not overcharged.
- Simplified billing roster for influenza virus vaccine and pneumococcal vaccine: As public health initiatives, mandatory assignment for these vaccines encourages widespread immunization by removing financial barriers and simplifying administration.
Implications of Not Accepting Assignment (for non-mandatory services)
For services where assignment is not mandatory, a **non-participating provider** may choose not to accept assignment. When a provider does not accept assignment:
- The provider can charge the beneficiary more than the Medicare-approved amount, up to the **limiting charge**. The limiting charge is 115% of the Medicare-approved amount.
- Medicare typically sends its share of the payment directly to the beneficiary, not the provider.
- The beneficiary is responsible for paying the entire bill to the provider, including the Medicare deductible, coinsurance, and any amount up to the limiting charge. The beneficiary then waits for Medicare to reimburse them for their portion.
This process, known as **balance billing Medicare** patients, places a greater financial burden and administrative task on the patient.
Participating vs. Non-Participating Providers and Assignment
The concepts of “participating” and “non-participating” providers are closely linked to “accept assignment.”
- Participating Providers: These providers have signed an agreement with Medicare to accept assignment for *all* Medicare-covered services provided to *all* Medicare beneficiaries. They always check “Yes” in Field 27.
- Non-Participating Providers: These providers have *not* signed an agreement with Medicare. While they can still treat Medicare patients, they have the option to decide on a claim-by-claim basis whether to accept assignment for non-mandatory services. If they do not accept assignment, they are subject to the **limiting charge** (115% of the Medicare-approved amount) and the patient may be balance billed.
These distinctions are crucial for providers to understand their billing obligations and for beneficiaries to understand their financial responsibilities. Staying informed about **Medicare assignment rules** and **CMS 1500 billing guidelines** is vital for compliant and efficient healthcare operations.