Assignment Agreement

An assignment agreement is between a supplier of services and a Medicare beneficiary. The option of accepting assignment belongs solely to the supplier.

  • Participating suppliers have signed a contract agreeing to accept assignment on all services rendered to Medicare beneficiaries.
  • Nonparticipating suppliers have the option of accepting assignment on a claim-by-claim basis except where CMS regulations require mandatory assignment, i.e., Medicare covered drugs.

Once entered into, the assignment agreement may not be rescinded by non-participating suppliers unless done so by mutual written agreement of the supplier and beneficiary. This agreement must be communicated to the MACs before the MACs has made, and sent notice of, the claim determination. Participating suppliers may not rescind the assignment agreement during the period of their participation contract.

When the supplier accepts assignment, he/she is bound by law to accept the MACs determination of the approved amount as the full fee for the service rendered. He/she may not bill, or accept payment for, the amount of the reduced charges. However, an attempt must be made to collect (1) 20 percent of the approved charge (coinsurance), (2) any amount applied to the deductible, and (3) any noncovered charges, subject to the Limitation on Liability provisions.

Example of Assigned Claim

Submitted fee = $25.00
Approved charge (paid at 80% assuming that the $183.00 deductible has been met) = $20.00
Allowable charge reduction which cannot be collected from any source (submitted fee minus approved charge) = $5.00
Payment (80% of the approved charge) = $16.00
Coinsurance (20% of approved charge) = $4.00

Suppliers who repeatedly violate the assignment agreement could be charged and found guilty of a misdemeanor, punishable by a maximum fine of $2,000, up to six months imprisonment, or both.

Mandatory Assignment for Covered Drugs Billed to Medicare

Section 114 of the Benefits Improvement and Protection Act of 2000 (BIPA) states, in part, "Payment for a charge for any drug or biological for which payment may be made under this part may be made only on an assignment-related basis." Mandatory assignment applies only to those drugs "for which payment may be made", i.e., Medicare-covered drugs. Drugs that would never be paid, e.g., no benefit category, never medically necessary, are not subject to mandatory assignment.

A supplier may not render a charge or bill to anyone for these drugs and biologicals for any amount other than the Medicare Part B deductible and coinsurance. Mandatory assignment does not apply to dispensing fees for drugs.

If a supplier submits an unassigned claim for a drug or biological, the DME MAC will process the claim as though the supplier accepted assignment.

Nature and Effect of Assignment on Claims

Assignment is a written agreement between beneficiaries, their physicians or other suppliers, and Medicare. The beneficiary agrees to let the physician/supplier request direct payment from Medicare for covered Part B services, equipment, and supplies by assigning the claim to the physician/supplier. The physician/supplier in return agrees to accept the Medicare allowed payment amount by the MACs as his/her full charge for the items or services. A physician/supplier who agrees to accept assignment on all claims for Medicare services, rather than on a claim-by-claim basis is known as a participating physician/supplier. In effect, the physician/supplier who accepts assignment on a claim-by-claim basis or who is a participating physician/supplier is precluded from charging the enrollee more than the deductible and coinsurance based upon the approved payment amount determination.

In "mandatory assignment" situations, i.e., where payment under the Act can be made only on an assignment-related basis or where payment is for services furnished by a participating physician/supplier, the beneficiary (or the person authorized to request payment on the beneficiary's behalf) is not required to assign the claim to the physician/supplier in order for an assignment to be effective. However, the beneficiary (or the person authorized to request payment on the beneficiary's behalf) must continue to authorize the release of medical or other information necessary to process the claim and request payment of Medicare benefits for the Medicare Part B covered services, equipment, or supplies. Physicians/ suppliers who agree to (or must by law) accept assignment from Medicare cannot attempt to collect more than the appropriate Medicare deductible and coinsurance amounts from the beneficiary, his/her other insurance, or anyone else.

In situations where mandatory assignment is not applicable and a non-participating physician/supplier indicates on the claim that he/she accepts assignment, but the beneficiary does not assign the claim to that non-participating physician/supplier, payment must be made on an unassigned basis, i.e., directly to the beneficiary.

A violation of the assignment occurs if the physician/supplier collects (or attempts to collect) from the enrollee or anyone else any amount which, when added to the benefit, exceeds the Medicare allowed amount. A bill for assigned services is considered paid in full when the Medicare allowed amount is paid. The carrier payment determination takes into account all of the services furnished by the physician/supplier in connection with the claim. Therefore, a physician/supplier may not charge the enrollee for paperwork involved in filing an assigned claim.

If the enrollee has private insurance in addition to Medicare, the physician/supplier who has accepted assignment of supplementary medical insurance (SMI) benefits is in violation of his/her assignment agreement if he/she bills or collects from the enrollee and/or the private insurer an amount which, when added to the Medicare benefit received, exceeds the Medicare allowed amount. If it comes to a MAC's attention that a physician/supplier has received an excessive amount, the MAC must inform him/her to refund such amount to the appropriate party. Where it is not clear as to who is entitled to receive the refund under the terms of the private insurance, any excess amount paid by the enrollee may be returned to the enrollee.

A non-participating physician/supplier who accepts assignment for some Medicare covered services is not ordinarily precluded from billing the beneficiary for other Medicare covered services for which the nonparticipating physician/supplier does not accept assignment and is also not precluded from billing the patient for services that are not covered by Medicare. However, a physician/supplier may not attempt to circumvent the Medicare allowed amount limitation by "fragmenting" his/her bills. Bills are "fragmented" when a physician/supplier accepts assignment for some services, and claims payment from the enrollee for other services performed at the same place and on the same occasion. When a MAC becomes aware that a physician/supplier is fragmenting his/her bills, it must inform him/her that this practice is unacceptable and that he/she must either accept assignment for, or bill the enrollee for, all services performed at the same place and on the same occasion.

Exception

In mandatory assignment situations, i.e., where a physician/supplier must accept assignment for certain services as a condition for any payment or for full payment to be made, he/she may accept assignment for those services without accepting assignment for other services furnished by him/her for the same enrollee at the same place and on the same occasion.

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Last Updated Thu, 19 Dec 2019 09:58:56 +0000