Original Fee-For-Service Medicare: How To Maximize Use

When you consider which doctor to use, think about the factors listed in Choosing A Doctor. In addition, find out whether the doctor is a Participating Physician, a Non-Participating Physician or a Private Contract Physician. The amount of money you will have to pay out-of-pocket depends on which type your doctor is. Fortunately, the vast majority of doctors are Medicare Participating physicians which results in your paying the least out-of-pocket for care. (You may get a list for Medicare participating medical providers from your Medicare Carrier.)

You can save money by sticking with doctors who are Participating Physicians so you don't have to pay more than the Medicare-approved amount.

Participating Physicians

A "Participating Physician" is a doctor who bills Medicare. Participating Physicians must accept the amount Medicare pays (the "Medicare Approved Amount") as full payment for the services the doctor renders to you. 

You will never have to pay more than your coinsurance portion of the Medicare Approved amount, which is usually 20%. The coinsurance portion for mental health services is 50%.

Non-Participating Physician

A "Non-Participating Physician" can bill more than the Medicare Approved Amount, but is not allowed to bill more than 15% above that amount. In some states, Non-Participating Doctors are even more limited in what they can charge.

States in which Non-Participating providers cannot charge people who receive Medicare even a penny more than Medicare Approved Amounts are: Massachusetts, Ohio, Pennsylvania and Rhode Island.
 
States in which Non-Participating providers can only bill up to 5% above the Medicare Approved Amount are Minnesota and New York.

Like Participating physicians, Non-Participating physicians are required to submit the bill to Medicare.  Instead of paying the physician, Medicare will pay you directly.

As an incentive to encourage physician participation in Medicare, Medicare pays Participating Providers 5% more than it pays to Non-participating Providers.

For example, a physician who does not accept Medicare Assignment bills you for $200. However, Medicare determines the Medicare Approved Amount to be $100. Therefore, the physician cannot collect more than $115 or 15% over the Medicare Approved. Medicare would pay $80 (80% of the Medicare Approved Amount) and you would owe the physician no more than $20 (20% of the Medicare Approved Amount) plus $15 (15% over the Medicare Approved Amount) or $35 total out of your pocket. 

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