Article Detail - JA DME

An assignment agreement is a formal arrangement between a Medicare beneficiary and a supplier of services. Under this agreement, the beneficiary allows the supplier to request direct payment from Medicare for covered services. The supplier, in turn, agrees to accept the Medicare-approved payment amount as full compensation for the services rendered.

Types of Suppliers: Participating vs. Non-Participating

1. Participating Suppliers:
   • These suppliers agree to accept assignment for all services provided to Medicare beneficiaries. This means they accept Medicare-allowed amounts as full payment, collecting only the Medicare deductible and coinsurance from the beneficiary.
   • Participating suppliers are bound by a contract signed with the National Provider Enrollment (NPE) East and must submit claims for all services rendered to Medicare beneficiaries.
   • Required to use the Medicare Participating Physician or Supplier Agreement (Form CMS-460) to enroll or change their participation status, typically during the annual open enrollment period.
2. Non-Participating Suppliers:
   • Suppliers who choose not to sign the participation agreement are categorized as non-participating. They have the flexibility to accept assignment on a claim-by-claim basis, except in situations where assignment is mandatory.
   • When billing non-assigned, the Medicare payment goes directly to the beneficiary, who is then responsible for paying the supplier in full.  

Participation Status and its Implications

Participation status is linked to an entity's tax identification number and cannot vary by location. All locations under a single tax ID must adhere to the same participation status.

• Open Enrollment: Each November, open enrollment forms, including the CMS-460, are sent to active suppliers. Non-participating suppliers wishing to transition to participating status must submit their forms before December 31. Conversely, if a participating supplier wants to become non-participating, they can request to become non-participating by sending the request to the NPE on their company letterhead. The request must be postmarked before December 31 of that year to become non-participating effective January 1 of the next year.

Claim Assignment and Payment Process

When a participating supplier accepts assignment, they are legally obligated to accept the Medicare-approved amount as full payment for the service. For instance, if a service is billed at $25 but the approved charge is $20, the supplier cannot collect the difference of $5. Instead, they must absorb this reduction.

• Example:
  • Submitted Fee: $25.00
  • Approved Charge: $20.00
  • Medicare Payment (80%): $16.00
  • Coinsurance (20%): $4.00

Suppliers violating assignment agreements may face serious penalties, including fines or imprisonment.

Mandatory Assignment for Certain Services

Certain services, especially those involving covered drugs under Medicare, are subject to mandatory assignment. In these cases, suppliers cannot charge beneficiaries any amount beyond the Medicare deductible and coinsurance.

Non-Assignment of Benefits

Non-assignment means a supplier chooses not to accept assignment for Medicare payment. Consequently, the beneficiary becomes responsible for the full payment.

Important Distinctions

It is crucial to understand that the assignment of benefits does not authorize a supplier to submit claims. Beneficiary Authorization requirements for claim submission are separate from assignment agreements. In mandatory assignment cases, beneficiaries are not required to sign an assignment agreement.