Medicare Part B 101 Manual

Medicare Part B 101 Manual

Assignment of Benefits

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Assignment of Benefits

An assignment is an agreement between a provider and the Medicare patient. Under the terms of the assignment, the Medicare patient transfers to the provider their right to benefits for covered services specified on the assigned claim; the provider in return agrees to accept the Medicare-approved charge as the full charge for the items or services.

A provider who accepts assignment is prohibited from charging Medicare patients more than the deductible and coinsurance of the approved allowance for the service(s). A participating provider must accept assignment for all covered services. A nonparticipating provider may accept assignment on a claim by claim basis. Item 27 of the CMS-1500 claim form (or equivalent record field for electronic transmissions) must be checked “Yes” by participating providers. Nonparticipating providers may check either “Yes” or “No.” If “Yes” is checked, the nonparticipating provider has agreed to accept Medicare’s approved allowance as his/her full charge for that claim.

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Mandatory Assignment

In certain situations, a provider, regardless of their participating status, must submit an assigned claim to Medicare. The following are instances when an assigned claim is mandatory.

  • The patient is eligible for Medicare and Medicaid.
    • Submit the claim to Medicare. Medicare will automatically forward payment information directly to Medicaid if the claim has been properly completed.
  • Participating physician/supplier

Services provided by the following nonphysician practitioners require mandatory assignment:

  • Ambulance suppliers
  • Ambulatory surgical center services for covered ambulatory surgical center (ASC) procedures
  • Certified registered nurse anesthetists
  • Clinical nurse midwives
  • Clinical nurse specialists
  • Clinical psychologists
  • Drugs and biologicals
  • Licensed clinical social worker
  • Marriage and family therapists
  • Mental health counselor
  • Nurse practitioner
  • Physician assistant
  • Physicians and independent laboratories billing for clinical diagnostic tests
  • Simplified roster billing for influenza virus and pneumococcal vaccines

The mandated assignment requirement also applies to routine venipuncture for collection of specimen(s). A specimen collection fee is allowed in circumstances such as drawing a blood sample through venipuncture or collecting a urine sample by catheterization. A specimen collection fee is not allowed where the cost of collecting the specimen is minimal, such as throat culture or a routine capillary puncture for clotting or bleeding time, or routine sticks of the finger, heel, or ear.

The provider may not collect from the Medicare patient on clinical lab unless it is determined by Medicare to be not medically necessary and a written ABN form was obtained prior to the services being performed.

Payment for clinical laboratory services is reimbursed at 100 percent of the fee schedule amount. Neither the deductible nor the coinsurance applies and may not be collected from the Medicare patient.

Providers should submit a claim only if the clinical laboratory service is actually performed and interpreted in their office. If the specimens are sent to a laboratory, the laboratory must file the claim.

Sanctions of double the violative charges, civil monetary penalties (up to $2,000 per violation) and/or suspension from the program for up to five years may be imposed upon providers and laboratories, except rural health clinical laboratories, who knowingly, willfully and repeatedly bill patients on an unassigned basis for clinical laboratory tests.

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Collecting from Medicare Patients on Assigned Claims

Participating physicians and nonparticipating physicians who selectively submit assigned claims may collect payment from their Medicare patients only for:

  • Unsatisfied deductible:
    • If the provider is certain that the deductible has not been met, they may collect the portion known to be unsatisfied.
    • When collecting the unsatisfied deductible, the provider should inform the Medicare patient and note the amount collected in Item 29.
  • Coinsurance of 20 percent of the known allowed amount:
    • The provider may not collect 20 percent of the submitted charge if it is greater than the allowed amount.
  • Noncovered services: 
    • Excluded services do not need to be billed to Medicare unless requested by the Medicare patient.
    • If excluded services are billed to Medicare at the request of the patient so that he/she may receive benefits from a secondary insurer, the procedure/service code should be followed by modifier GY (Service not covered by Medicare).

It is suggested that the provider notify the Medicare patient when a service is not covered.

  • If services would be denied as not reasonable and necessary, before the provider may collect any amounts from the Medicare patient, they must have obtained a valid ABN that's signed and dated by the patient. The ABN must state the provider’s belief as to why Medicare is expected to deny the service.

At no time may a provider who accepted assignment:

  • Collect all or any portion of the deductible or coinsurance in advance of services being rendered.
  • Collect more than the Medicare patient’s liability that is limited to 20 percent of the allowed amount for each service.
  • Collect more than the unsatisfied deductible amount, based on the allowed amount, for each service.

If it is determined that you have collected in excess of the Medicare patient’s total liability, the provider must refund any overpayment to the patient. However, even if they promptly refund the patient, it is an assignment violation to collect more than applicable amounts. If the provider knowingly, willfully and repeatedly violates the assignment agreement, they are guilty of a misdemeanor and subject to a fine of not more than $2,000 or imprisonment of not more than six months or both.

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Revised 10/16/2024