Pathology/Lab Coding Alert

Practice Management:

Bust 3 Myths About Medicare Participation Status

Published on Thu Oct 12, 2023

Choose wisely for your physicians.

If you think choosing to be “non-PAR” status with Medicare cuts the cord entirely, think again. Instead, you need to grasp the nuances of identifying as a non-participating provider so you can make informed decisions.

Myth 1: Non-PAR Means Never Accepting Medicare Patients

Going non-participating — or non-PAR for short — is different from completely opting out of Medicare altogether. Non-PAR providers can still see Medicare patients, but they aren’t considered “participating physicians.”

A non-PAR provider is still part of the Medicare program and is enrolled as a Medicare provider; however, they opt to receive payment for their services differently than a PAR provider.

“The nonparticipating 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,” Part B Medicare Administrative Contractor (MAC) Noridian Healthcare Solutions explains on its webpage.

Myth 2: Participation Means Serving All Patients

When you agree to be a participating Medicare provider, you “voluntarily and in advance enter into an agreement in writing to provide all covered services for all Medicare Part B beneficiaries on an assigned basis,” advises Part B carrier Novitas Solutions in online guidance.

“Physicians who are ‘participating’ (PAR) agree to accept Medicare’s allowed charge as payment in full for all of their Medicare patients,” expounds Kent Moore, senior strategist for physician payment at the American Academy of Family Physicians. “Physicians may elect to be a non-PAR physician, which permits them to make assignment decisions on a case-by-case basis and to bill patients for more than the Medicare allowance (up to the limiting charge) for unassigned claims.”

Difference: “While PAR physicians must accept assignment on all Medicare claims, Medicare participation agreements do not require physician practices to accept every Medicare patient who seeks treatment from them,” Moore says.

Process: “Participating and non-participating providers must follow the mandatory claim submission laws, which means you must submit the claim for payment to Medicare,” says Patsy Schwenk of Part B MAC CGS in a “Medicare Basics” webinar.

Myth 3: Non-PAR Always Means Higher Pay

Being Non-PAR can affect physician pay in both directions — up and down.

First, take a look at how PAR payments are calculated. If you say that you want to participate, “you are agreeing to accept Medicare’s fee schedule as payment in full,” cautions Schwenk. “So if Medicare’s allowed amount is $100, Medicare will pay $80 and the patient would pay $20 coinsurance and that’s all you will collect.”

PAR pros: There are some advantages to participating with Medicare, she admits. For instance, you get the full fee schedule amount, you’re set up for automatic crossover (the MAC processes the claim and sends the information to the supplemental insurers), and you’re included in the MEDPARD directory, where patients can look for providers in their area who accept assignments. About 95 percent of providers do participate in Medicare, she continues.

Non-PAR cons: If you are a non-PAR provider, you can accept assignment on a claim-by-claim basis, but non-PAR providers do receive a 5 percent reduction in the fee schedule amount. “So in my previous example where I said if the fee schedule pays $100, a non-PAR provider would be starting out at just $95 instead,” she says.

Critical: Non-PAR providers must also contend with the limiting charge rule. “The limiting charge is the maximum amount a nonparticipating provider may legally charge a beneficiary when filing an unassigned claim,” Part B MAC First Coast Service Options notes in online guidance. “The limiting charge for a service is 115 percent of the nonpar amount.”

Non-compliance with the Medicare limiting charge rule carries civil monetary penalties up to $10,000 per violation.