Medicare limits the amount it will pay for some services, supplies, and medical equipment. This is called the Medicare limiting charge. Whether a limiting charge is available to help limit the cost of services or supplies, however, depends upon who is rendering the service, whether the provider has agreed to accept assignment, what type of item or service is at issue, and whether the physician and the patient executed a private contract. Assignment means that a provider has agreed that it will accept the Medicare-defined reasonable and customary fee for its services. A full discussion of assignment appears in a separate article.
If medical or supply providers accept assignment, they accept the Medicare fee as payment in full. Medicare pays its part of the fee, 80 percent of the reasonable and customary charge, directly to the provider. The patient’s portion is the remaining 20 percent. The patient may pay this amount to the provider, or some other source, such as a Medigap insurance policy, pays the provider on the patient’s behalf. If the doctor or supplier does not participate in Medicare, but is only accepting assignment in a particular case, his or her fee is reduced by five percent.
Some providers must always accept assignment, including hospitals; home health agencies; skilled nursing facilities; outpatient physical, occupational, and speech therapy providers, and facilities that provide comprehensive rehabilitation on an outpatient basis.
Assignment Not Accepted
Whether a limiting charge applies to a medical provider that does not accept assignment depends upon whether the charge is exacted by a doctor or by a medical supplier. A doctor’s charge is generally limited to no more than 115 percent of the Medicare-approved amount. This is known as the limiting charge. There is no limiting charge, however, when doctors who do not accept assignment charge for ambulance services, vaccinations, surgical dressings, prosthetics, orthotics, durable medical equipment, and some drugs covered by Part B of Medicare. Regardless, however, a patient may be required to pay the full amount of the bill at the time services are rendered. Medicare then reimburses the patient.
Unless a medical supplier is providing physician services, there is no limiting charge imposed on suppliers. They may charge any amount they wish for the supply. As with physicians, the patient may be required to pay the full amount of the bill when the supply is tendered.
If a patient executes a private contract with a doctor, neither Medicare nor any Medigap policies will pay for the services. Again, there is no limiting charge, so the doctor can set his or her own fee, and the patient may be required to pay the full amount when services are rendered.
Copyright 2011 LexisNexis, a division of Reed Elsevier Inc.