Assignment and Non-assignment of Benefits - JD DME

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 - In Medicare, "participation" means you agree to always accept claims assignment for all covered services furnished to Medicare beneficiaries. By agreeing to always accept assignment, you agree to always accept Medicare-allowed amounts as payment in full and not to collect more than the Medicare deductible and coinsurance or copayment from the beneficiary. For claims where assignment is accepted, the Medicare payment is sent to the supplier.
  • Participating suppliers have signed a contract agreeing to accept assignment on all services rendered to Medicare beneficiaries with the Palmetto GBA NPE West.
  • The Social Security Act requires suppliers to submit claims for Medicare beneficiaries whether they participate or not. To participate in the Medicare Program as a participating supplier, a Medicare Participating Physician or Supplier Agreement (Form CMS-460) must be completed. Suppliers can submit this form with initial enrollment, or up to 90 days after the enrollment date. The only other time suppliers may change their participation status is during the open enrollment period.
  • Open Enrollment - Open enrollment forms, including the CMS-460 Medicare Participating Physician and Supplier Agreement Form are mailed to all active suppliers every November. If an existing non-participating supplier wants to become participating, then the agreement form must be received during open enrollment and postmarked before December 31 of that year.
  • 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.

  Note: It is important to note participation status is associated with an entity (tax ID number) and not a location. A business entity with multiple locations under the same tax ID number cannot choose to have different participation statuses for each location. All locations will automatically be assigned the same status (participating or non-participating) depending on what the entity has chosen.

  Once entered into, the assignment agreement may not be rescinded by non-participating suppliers unless done so by mutual written agreement of the supplier and beneficiary.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 have 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 MAC’s 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 (A) 20 percent of the approved charge (coinsurance), (B) any amount applied to the deductible, and (C) 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 yearly deductible has been met) = $20.00
      Allowable charge reduction which cannot be collected from any source (submitted fee minus approved charge) = $5.00 (to be adjusted off account by supplier)
      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.

    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.

    Participating Physician/Supplier

    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 and is precluded from charging the beneficiary 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.

    Non-Participating Physician/Supplier

    The physician/supplier who accepts assignment on a claim-by-claim basis is known as a non-participating physician/supplier and is permitted to submit claims as non-assigned on a claim-by-claim basis. When the claim is billed as non-assigned, the beneficiary is responsible for payment in full, and the reimbursement from Medicare will be sent to the beneficiary.

    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 non-participating physician/supplier who accepts assignment for certain Medicare-covered services is generally allowed to bill the beneficiary for other Medicare-covered services where they do not accept assignment. They are also permitted to bill the patient for services that are not covered by Medicare.

    Violation of Assignment

    A violation of the assignment occurs if the physician/supplier collects (or attempts to collect) from the beneficiary 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 considers all of the services furnished by the physician/supplier in connection with the claim. Therefore, a physician/supplier may not charge the beneficiary for paperwork involved in filing an assigned claim.

    If the beneficiary 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 beneficiary 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 beneficiary may be returned to the beneficiary.

    Billing Claims

    A physician or supplier may not circumvent the Medicare allowed amount limitation by "fragmenting" their bills. Fragmenting occurs when a physician or supplier accepts assignment for some services but then seeks payment from the beneficiary for other services (non-assigned) that are provided at the same place and same date of service.

    • This means that items that are billed assigned and non-assigned cannot be billed on the same claim for the same date of service. In this scenario, the items billed assigned would be billed for one date of service, and the non-assigned would have to be billed on a different date of service with proof of delivery matching the date of delivery to the beneficiary.

    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 beneficiary for all services performed at the same place and on the same date of service.

    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 beneficiary at the same place and on the same date of service.

    Non-assignment of Benefits

    Non-assigned is the method of reimbursement a physician/supplier has when choosing not to 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.

    Assignment of Benefits is not Authorization to Submit Claims

    It is important to note that the Beneficiary Authorization signature requirements for submission of claims are separate and distinct from assignment of benefits requirements except where the beneficiary died before signing the request for payment for a service furnished by a supplier and the supplier accepts assignment for that service. Specifically, the beneficiary signature requirements for submission of claims must be met for all Part A and Part B claims and apply to both provider and supplier claims, whereas the assignment of benefits requirements apply to suppliers and must be met to authorize Medicare to pay the supplier rather than the beneficiary. In addition, the beneficiary does not need to assign benefits in any circumstance where assignment is mandatory. Thus, in most cases, a signed assignment of benefits is not needed.

    Resource

    • CMS Internet Only Manual (IOM), Publication 100-04, Medicare Claims Processing Manual, Chapter 1, Section 30.3.2
    • Medicare DMEPOS Supplier Participation Agreement - CMS 460
    Last Updated Sep 17 , 2024

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