Participating vs. Non-Participating Providers

The word "participating" can be ambiguous when referring to the Medicare program. Providers may indicate to their patients that they "participate" with Medicare, meaning they see and treat Medicare beneficiaries. For the purposes of this education module, we refer to "participating" as whether a provider accepts the Medicare allowance as payment in full for all of their services.

Initially, all providers are enrolled in the Medicare program as non-participating. Providers are then given 90 days from the date of enrollment to choose if they want to become a participating provider, and, therefore, agree to accept Medicare’s payment as payment in full. If a provider does not choose to participate during this initial enrollment period, he/she will be given the opportunity each year (usually in November and December) to change his/her participation status.

Participating providers and suppliers agree to accept assignment on all Medicare claims. Certain practitioners (e.g., non-physician practitioners, nutritionists, clinical social workers, etc.) are automatically enrolled as participating, since they must accept assignment if they bill Medicare.

The advantages of being a participating provider:

 

Non-participating providers and suppliers sign no agreements, and may choose on a claim-by-claim basis whether or not they want to accept assignment. Non-participating providers who do not accept assignment on a claim will be limited as to the amount they charge the beneficiary. Only non-participating providers may choose to submit non-assigned claims.

 

MISINFORMATION: If you are a non-participating (non-par) provider, you do not have to worry about billing Medicare.

Correction: Being non-par does not mean you don’ t have to bill Medicare. All Medicare covered services must be billed to Medicare, or the provider could face penalties.

 

A non-par provider is actually a provider involved in the Medicare program who has enrolled to be a Medicare provider but chooses to receive payment in a different method and amount than Medicare providers classified as participating. The non-par provider may receive reimbursement for rendered services directly from their Medicare patients. They submit a bill to Medicare so the beneficiary may be reimbursed for the portion of the charges for which Medicare is responsible.

 

It is important to note that non-par providers may choose to accept assignment; therefore, the amount paid by the beneficiary must be reported in Item 29 of the CMS 1500 claim form. This ensures that the beneficiary is reimbursed (if applicable) prior to Medicare sending payment to the provider. Whether or not a non-par provider chooses to accept assignment on all claims or on a claim-by-claim basis, their Medicare reimbursement is five percent less than a participating provider, as reflected in the annual Medicare Physician Fee Schedule.

 

You can find a copy of the Medicare Participating Provider Agreement at http://www.cms.hhs.gov/cmsforms/downloads/cms460.pdf on the CMS website. The form contains important information regarding the participation process and the annual opportunity you have to make or change your participation decision.

 

Additional information is available in the Medicare Benefit Policy Manual (Chapter 15; Covered Medical and Other Health Services) at http://www.cms.hhs.gov/manuals/Downloads/bp102c15.pdf on the CMS website and the Medicare Claims Processing Manual (Chapter 12; Physician/Nonphysician Practitioners) at http://www.cms.hhs.gov/manuals/downloads/clm104c12.pdf on the CMS website.