Retiree Health SPD

The following section is provided as helpful information for retirees and spouses entitled to Medicare.

Medicare Participating Provider Guidelines

Physicians and other health care providers sign agreements to become Medicare participating providers and accept Medicare assignment on all claims. Under the assignment method, the provider agrees to accept the amount approved by Medicare as payment in full less Medicare’s deductible and coinsurance.

In certain situations, certain providers are required to accept assignment. For example, all physicians and qualified laboratories must accept assignment for clinical laboratory services covered by Medicare. Physicians must also accept assignment if the individual is low income and Medicaid pays the Medicare coinsurance.

Medicare Nonparticipating Provider Guidelines

Physicians and other health care providers who do not accept Medicare assignment can require the individual to pay the full amount of the bill. Medicare will then reimburse the individual the Medicare-approved amount less the Medicare deductible and coinsurance. The individual is usually responsible for the part of the bill that is more than the Medicare approved amount.

Limiting Charge

Federal law prohibits a provider who does not accept assignment from charging more than 15 percent above Medicare’s approved payment amount (the “limiting charge”). Any overcharges must be refunded. The limiting charge does not apply to services the individual receives from physicians with whom they have a private contract, or for certain items and services, such as durable medical equipment, ambulance services, immunizations, and anti-nausea drugs that are covered by Medicare.

The limiting charge also applies to primary insurers when Medicare is secondary. A non-participating provider who does not accept assignment is prohibited from billing or collecting amounts above the applicable limiting charge, regardless of who would be responsible for payment. This includes Individual Medicare Supplemental Insurance (Medigap).

Helpful Hint

To avoid excess charges, go to providers and medical suppliers who accept Medicare assignment. Some do on a case-by-case basis. Others sign agreements to accept assignment of all Medicare claims. They are called participating providers and suppliers. The names, addresses and telephone numbers of participating providers can be obtained by calling the Medicare carrier.

Other Charge Limits

Physicians who do not accept assignment for elective surgery are required to give the individual a written estimate of costs before the surgery if the total charge will be $500 or more. If the individual is not given a written estimate, the individual is entitled to a refund of any amount the individual paid in excess of the Medicare-approved amount for the surgery performed.

Additionally, any physician who does not participate in Medicare and who provides the individual with a service that he or she knows or has reason to believe Medicare will determine to be medically unnecessary must inform the individual in writing before performing the service. This is because Medicare will not pay for services it judges to be medically unnecessary. If written notice is not given, and the individual did not know that Medicare would not pay, the individual cannot be held liable to pay for the services. However, if the individual did receive written notice and signed an agreement to pay for the services, the individual will be held liable to pay.

Participating Providers And Suppliers

To avoid excess charges, go to providers and medical suppliers who accept assignment. Some do on a case-by-case basis. Others sign agreements to accept assignment of all Medicare claims. They are called participating providers and suppliers. The names, addresses and telephone numbers of participating providers and suppliers can be obtained by calling the Medicare carrier.

Private Contracts With Physicians

Effective January 1, 1998, the Balanced Budget Act (BBA) allows physicians or providers to sign private contracts with Medicare individuals for which no claim is to be submitted to Medicare. This provision applies only to covered services. Medicare individuals retain the right to pay out of pocket for noncovered services. Chiropractors, podiatrists, and optometrists may not enter into private contracts.

Physicians entering into a contract with Medicare individuals are prevented from submitting any claims to Medicare for two years. If a Medicare individual wants to continue receiving services from a physician or practitioner who has opted out, the individual must sign a contract with the physician or practitioner and agree to be personally responsible for the charges. The private contract must be signed by both parties before services can be furnished under its terms and must state plainly and unambiguously that by signing the private contract, the Medicare individual or the Medicare individual’s legal representative:

Gives up all Medicare coverage of, and payment for, services furnished by the “opt out” physician or practitioner.
Agrees not to bill Medicare or ask the physician or practitioner to bill Medicare.
Is liable for all charges of the physician or practitioner, without any limits that would otherwise be imposed by Medicare.
Acknowledges that Individual Medicare Supplemental Insurance (Medigap) will not pay towards the services and that other supplemental insurers may not pay either.
Acknowledges that the individual has the right to receive services from physicians and practitioners for whom Medicare coverage and payment would be available.