Assignment and Nonassignment of Benefits - JF Part B

Assignment

Under the Medicare program, there are two Medicare reimbursement options. They are Assignment and Nonassignment. Accepting assignment on a Medicare claim can be a definite advantage to both the physician/supplier and the beneficiary. The Medicare claim itself constitutes a legal agreement between the physician/supplier and the beneficiary which carries specific terms with it that must be observed.

Assignment of benefits applies to all participating providers (including ambulance providers and limited license practitioners who, are participating providers by statute and must accept assignment on all Medicare claims) and non-participating providers (who may accept assignment on a case-by-case basis). If the provider accepts assignment, the Medicare payment will be made directly to the provider. Under this method, the provider agrees to accept the Medicare approved amount as full payment for covered services.

Item 27 on the CMS-1500 claim form allows the provider to indicate whether they accept or do not accept assignment. When accepting assignment, the beneficiary may be billed for the 20% coinsurance, any unmet deductible and for services not covered by Medicare. The difference between the billed amount and the Medicare approved amount cannot be billed.

Note: The 20% coinsurance is based on 20% of the Medicare approved amount (not 20% of the billed amount). Private insurance policies usually will reimburse the beneficiary for the 20% coinsurance and the deductible. Some private insurance policies may reimburse the beneficiary for services not covered by Medicare.

On assigned claims, the physician/supplier is bound by the assignment agreement, even if no payment is issued as a result of the payment being applied toward the beneficiary's annual deductible. He/she must still accept Medicare's approved amount as payment in full.

It is possible for a physician/supplier to accept assignment on a partially paid bill. In this case the physician/supplier still must accept Medicare's allowed amount as their payment in full. If Medicare's allowed amount is less than the amount that the beneficiary has already paid, the physician/supplier must refund the difference to the beneficiary. If a physician/supplier delays submission of an assigned claim until no payment can be made, the physician/supplier may only collect the 20% coinsurance and any unmet deductible from the beneficiary.

A physician/supplier can collect charges from the beneficiary for services that are denied as not covered by Medicare even though assignment was accepted on the claim. Assignment cannot be canceled once the claim is processed and the carrier has sent a notice of determination to both parties. This also applies to all future resubmissions, adjustments, and appeals of the claim, in case of denial or underpayment. Participating physicians and suppliers may not cancel assignment as this would be a violation of the participation agreement.

If a physician/supplier consistently violates the assignment agreement, the carrier may, with concurrence of the Centers for Medicare & Medicaid Services (CMS), refuse to pay assigned claims submitted by that physician or supplier. Public Law 95-142 provides that any person who knowingly, willfully and repeatedly violates the assignment agreement shall be guilty of a misdemeanor and subject to a maximum fine of $10,000.00 and/or exclusion from the Medicare program for up to five years. This legislation also provides that when convicted of a criminal offense related to their involvement in Medicare or Medicaid, they will be suspended from participating in both programs.

Medicare carriers are required to report, and act on, any violation of the assignment agreement. A physician/supplier is in violation of the assignment agreement if they collect, or attempt to collect:

• More than the deductible or coinsurance amount, or
• A fee for the paperwork involved in filing the claim.

Physicians and suppliers contracting with billing agents are ultimately responsible for the activities of those agents. When assignment is accepted, the billing agent should not bill the beneficiary for any amount above the 20% coinsurance and any unmet deductible.

Nonassignment of Benefits

The second reimbursement method a physician/supplier has is choosing to not accept assignment of benefits. Under this method, a non-participating provider is the only provider that can file a claim as non-assigned. When the provider does not accept assignment, the Medicare payment will be made directly to the beneficiary.

The provider may bill the beneficiary no more than the limiting charge for covered services. Should the provider bill more than the limiting charge for a covered service, the provider will have violated the non-participating agreement and may be subject to fines or penalties. When a provider does not accept assignment on a Medicare claim, he/she is not required to file a claim to the beneficiary's secondary insurance.

An exception to the non-participating agreement is that non-participating providers are required by law to accept assignment when the beneficiary has both Medicare and Medicaid. Mandatory assignment of clinical laboratory services, ambulance services and drugs and biologicals is also a requirement. Medicare pays all clinical la b at 100% of the clinical lab fee schedule.