Resource Center | PtEverywhere

Medicare Assignment: What Physical Therapists Need to Know

Written by PtEverywhere | May 23, 2024 4:00:00 AM

When running a physical therapy practice, understanding the ins and outs of Medicare reimbursement policies can feel like a maze. With Medicare being such a significant payer in healthcare, deciding whether to accept Medicare assignment is a key decision impacting both revenue and patient relationships. So, what is Medicare assignment, and what does a medical provider that accepts Medicare assignment must consider? Let's unravel the complexities so you can make an informed choice.

What Is a Medicare Assignment?

Medicare assignment refers to an agreement between medical providers and Medicare to accept the amount approved by Medicare for a covered service as full payment. This is particularly relevant for services under Medicare Part B. By agreeing to accept Medicare assignment, providers receive direct payment from Medicare (typically 80% of the cost) and collect the remaining balance from the patient via deductibles and coinsurance.

Participating vs. Non-Participating Providers

Participating Providers:
Providers who accept Medicare assignments for all covered services are considered "participating providers." They agree to charge no more than the Medicare Physician Fee Schedule (MPFS) amount, minus adjustments like the Multiple Procedure Payment Reduction (MPPR) and the 2% sequestration adjustment. This status typically ensures that patients pay lower out-of-pocket costs while enabling providers to have a predictable payment process.

Non-Participating Providers:
Non-participating providers maintain a contractual relationship with Medicare but haven't agreed to always accept assignments. Instead, they can selectively accept or decline assignments for each service.

In the event they accept assignment, they receive 95% of the Medicare approved amount. If they decline assignment, they can charge patients up to 15% above the Medicare-approved amount, known as the "limiting charge." While these providers retain pricing flexibility, they are still required to bill Medicare so that the patient can seek reimbursement.

Pros and Cons of Accepting Medicare Assignment

Understanding the implications of accepting a Medicare assignment is crucial for medical providers. By weighing the potential benefits and drawbacks, providers can make an informed decision that aligns with their financial goals and patient relationships.

Pros:

Increased Patient Access: Accepting a Medicare assignment provides access to a broader patient base. Many Medicare beneficiaries prefer providers who accept assignments because they incur lower out-of-pocket costs.

Referrals: Healthcare providers and referral partners often prefer to refer patients to assignment-accepted providers because of the ease of billing and predictable costs.

Cons:

Reimbursement Rates: Medicare reimbursement rates are often below market value, particularly given recent reductions to therapy services. This discrepancy can lead to lower overall profitability unless offset by patient volume.

Regulatory Compliance: Participating providers must comply with stringent Medicare regulations, including mandatory claim submissions and specific documentation requirements.

Non-Participating Providers: A Flexible Middle Ground

Non-Participating Providers offer a flexible middle ground for medical providers who want some pricing flexibility while still maintaining a contractual relationship with Medicare. By selectively accepting or declining assignments, these providers have the option to charge patients up to 15% above the Medicare-approved amount. However, they are still required to bill Medicare so that the patient can seek reimbursement.

Pros:

Pricing Flexibility: Non-participating providers can charge up to 15% above the Medicare-approved amount for services not covered by assignment, giving them slightly more autonomy over pricing.

Selective Acceptance: Providers can choose which services to offer under assignment, tailoring their practice to their strengths and preferences.

Cons:

Limited Freedom: Non-participating providers remain bound by the "limiting charge" rule, which caps the additional amount they can charge.

Patient Uncertainty: Patients must often pay more upfront and seek reimbursement later, requiring extra persuasion to demonstrate the value of your services.

What About Not Participating in Medicare?

Choosing not to participate in Medicare means you can't provide covered services to Medicare beneficiaries. While this may offer independence from Medicare's reimbursement rates and regulations, it also means walking away from a significant patient base. However, non-Medicare services like wellness programs remain an option.

Pros:

Independence: You won't have to adhere to Medicare's payment structure or documentation requirements.

No Impact from Cuts: Recent reimbursement reductions do not affect practices without Medicare relationships.

Cons:

Missed Opportunities: The rapidly growing Medicare population represents a valuable market segment that providers without Medicare relationships cannot tap into.

Marketing Challenges: Practices must clearly differentiate their services and justify their value proposition to attract non-Medicare patients.

 

Tips for Navigating Medicare Assignment Decisions

  • Assess Your Demographics: If your practice serves a predominantly Medicare-aged population, accepting a Medicare assignment could make financial sense.
  • Understand Your Costs: Carefully analyze whether Medicare's reimbursement rates align with your practice's financial goals.
  • Clarify Patient Expectations: Clearly communicate your assignment status and associated costs to help patients make informed choices.
  • Stay Compliant: If you accept a Medicare assignment, ensure you comply with all documentation, billing, and reporting requirements.

Leveraging PtEverywhere for Medicare Management

Physical therapy professionals can streamline Medicare-related tasks with the right tools. PtEverywhere's physical therapy software is designed to simplify patient management, billing, and documentation, which are crucial when dealing with Medicare. With features that help ensure compliance with Medicare requirements and optimize billing processes, PtEverywhere can reduce administrative burden. This allows you to focus more on patient care and less on paperwork, making your practice more efficient and compliant with Medicare regulations.

Final Thoughts and Next Steps

Deciding whether or not to accept a Medicare assignment is a significant decision for any physical therapy practice. By understanding the implications, weighing the pros and cons, and considering your patient demographics, you can make a choice that aligns with your practice’s objectives and financial goals. With PtEverywhere's comprehensive physical therapy software, you can manage these decisions more effectively, ensuring compliance and optimizing patient engagement.

Interested in enhancing your practice’s efficiency and Medicare management? Visit PtEverywhere to learn how our software can support your needs. Contact us today for a demonstration and see the difference it can make in your practice.