Article Date: 5/1/2002

Medicare Basics
Things don't have to be unclear when it comes to dealing with Medicare.

Last month I discussed the Medicare fee schedule and the effect that accepting assignment has on your practice. This month, I'll address Medicare's participating physician program.

Q What is "Medicare participation"?

Answer: Each year, you're given the option of being a "participating physician" in the Medicare program. "Participating" means that you agree to always accept Medicare assignment on covered services.

If you want to continue your current participation status, do nothing. However, if you want to change your participation status, you must respond in writing before the end of the year. The agreement covers the entire calendar year and you may not change your status during the year.

Whether you sign up or not, you're required to meet all of Medicare's documentation requirements for claims and medical records.

Q What happens if I don't participate?

Answer: If you elect not to participate (be non-PAR), you don't have to accept assignment on Medicare claims. You may choose on a claim-by-claim basis whether to take assignment. You still must file Medicare claims on all covered services. However, if you choose not to accept assignment, you may collect from the patient at the time of service.

Medicare throws in a kicker for non-PAR doctors: You have an upper limit, or limiting charge.

Q How does this affect my payments?

Answer: Remember that Medicare payment is based either on your usual fee or on the allowable, whichever is lower. Assume for the sake of this example that your usual fee for a service is $120, and the Medicare allowable is $100.

If you take assignment: The non-PAR allowable amount is 95% of the PAR allowable. This means that a non-PAR doctor will receive $95 (95% of $100), including payment from Medicare ($76) as well as from the patient ($19). The difference ($25) is written off.

If you don't take assignment: The limiting charge is calculated at 115% of the non-PAR allowable. So if the non-PAR amount is $95, then your fee for the service may be no more than $109.25 (115% of $95). You may collect right away from the patient, but you still may not collect your usual fee. The difference ($10.75) is written off. Medicare reimburses the patient $76.

Q And if I do participate?

Answer: If you participate, you agree to take assignment on all covered services to Medicare beneficiaries. Medicare wants you to participate, so it offers incentives. PAR doctors are:

Being PAR means that you always take assignment, so Medicare pays you directly for 80% of the allowable and you collect the 20% co-payment from the patient. In the example above, where your usual fee is $120 and Medicare's allowable is $100, you'd receive $80 from Medicare and $20 from the patient. The difference ($20) is written off.


Note: In February, I discussed Medicare beneficiaries who are eligible for glaucoma screening. I've had questions about Medicare coverage for "African-Americans 50 years old and older," and how they can have benefits.

As we know, Medicare usually covers people who are older than 65 and receive Social Security benefits (SSA). But many forget that a permanently disabled person can also apply for SSA and become eligible for Medicare at any age. So, a permanently disabled person who already has Medicare can receive a glaucoma screening exam if he meets the other exam criteria .


Optometric Management, Issue: May 2002