Understanding Medicare Participation and Non-Participation

Understand how physicians who are identified by the Medicare program as non-participating may still provide care for Medicare beneficiaries and receive payment by the program. Learn how Medicare sets different payment levels for services provided by participating and non-participating physicians.

Physician Participation
 
Terms that are defined in legislation often have meaning that bears no relationship with common usage. The word “participation,” as defined for purposes of the Medicare program, is one such term.
 
Each year, physicians must choose whether to be either a “participating physician” or a “non-participating physician” under Medicare’s fee-for-service program. Physicians in either category may provide care for Medicare beneficiaries, but their reimbursement level will vary depending on the category they select. Participating physicians agree to accept Medicare assignment on 100% of the claims submitted. Non-participating physicians have the option of accepting assignment on any individual claim. Accepting assignment means that Medicare pays the physician 80% of the Medicare allowed amount, and the patient is responsible for any remaining annual deductible amount ($100) and the 20% coinsurance amount. The allowed amount is the lower of the actual charge or the Medicare determined payment amount based on the resource-based relative value scale (RVS).

The downside to being a non-participating physician is that the maximum Medicare payment amount is set at 95% of the amount paid for the same service when furnished by a participating physician. The positive aspect of non-participation is the ability to bill above the RVS amount. While balance billing does increase a non-participating physician’s total payment, it is limited to 115% of the allowed amount. Consider the following chart:

RVS Participating Allowed Amount $100 $500 $800
Medicare Payment 80 400 640
Participating coinsurance 20 100 160
Balance Billing Amount 0 0 0
Maximum Participating Payment $100 $500 $800
       
RVS Non-Participating Allowed Amount $95 $475 $760
Medicare Payment                       76 380 608
Non-Participating coinsurance             19 95 152
Balance Billing Amount         14.25 71.25 114
Maximum Non-Participating Payment $109.25 $546.25 $874

Most claims for physician services are submitted on an assigned basis, and participating physicians submit the vast majority of these claims.

2010-07-01T00:00:00+00:00 July 1st, 2010|Advocacy|