The financial landscape of Medicare Part B is shaped significantly by a provider’s billing status. Understanding whether a provider is Participating (PAR), Non-Participating (Non-PAR), or Opt-Out is essential for beneficiaries, as this status directly determines out-of-pocket costs and billing processes. PAR status is a contractual agreement between the provider and Medicare, defining how claims are handled and what constitutes full payment for a service. Choosing a provider without understanding this designation can lead to unexpected expenses and administrative complications.
Defining Participating Provider Status
A provider who chooses Participating (PAR) status has entered into a formal agreement with Medicare to “accept assignment” for all covered services. This means the provider accepts the Medicare-approved amount as payment in full. The provider is only permitted to bill the patient for the annual deductible and the standard 20% coinsurance of the approved amount. The provider is required to submit the claim directly to Medicare. Medicare then pays its portion directly to the provider, ensuring the patient’s financial liability is fixed and predictable.
The Non-Participating Provider Alternative
Non-Participating (Non-PAR) providers are authorized to treat Medicare beneficiaries but have not signed the agreement to accept assignment for all services. They retain the option to decide whether to accept assignment on a claim-by-claim basis. If a Non-PAR provider does not accept assignment, they are subject to the “Limiting Charge” rule. This rule sets the maximum legal charge for a covered service at 15% above the Medicare-approved amount. The Non-PAR provider’s fee schedule amount is also 5% less than that of a PAR provider.
How Provider Status Impacts Patient Costs
The provider’s status has a direct and significant impact on the financial liability of the patient. When a patient sees a PAR provider, the cost is straightforward: the patient pays the applicable deductible and 20% of the Medicare-approved amount. The same cost applies when a Non-PAR provider voluntarily chooses to accept assignment for a specific service. In both assigned scenarios, the provider handles the claim submission and receives payment directly from Medicare.
However, if a Non-PAR provider chooses not to accept assignment, the patient’s financial liability increases. The provider can charge up to the Limiting Charge, which is 115% of the Medicare-approved amount. The patient is responsible for the full Limiting Charge upfront, and the provider bills the patient directly. The patient then has to seek reimbursement from Medicare for the covered portion, which can result in “excess charges”—the difference between the Medicare-approved amount and the Limiting Charge—that the patient must pay out-of-pocket.
For example, if Medicare’s approved amount for a procedure is $100, the PAR provider charges the patient $20 (20% coinsurance). A Non-PAR provider who does not accept assignment can charge up to $115 (the Limiting Charge). In this case, Medicare will reimburse the patient 80% of the $95 Non-PAR fee schedule amount, leaving the patient responsible for the deductible, the 20% coinsurance, and the 15% excess charge. The total patient responsibility in this unassigned scenario can be up to 35% of the Medicare-approved amount.
Finding and Confirming Provider Status
Beneficiaries can determine a provider’s status before receiving care using the federal government’s online search tool, Care Compare. This resource allows users to search for physicians, hospitals, and facilities, providing information on their Medicare enrollment status. The most practical step is to directly contact the provider’s office. Specifically ask if they accept Medicare and if they “accept assignment” for the service being scheduled. Confirming this information prevents unexpected bills and administrative burdens.
Opt-Out Providers: A Separate Category
A distinct category exists for providers who have formally “Opted Out” of the Medicare program entirely. These providers file an affidavit stating they will not bill Medicare for any services provided to beneficiaries for a two-year period. This status is fundamentally different from Non-PAR, as Medicare will not pay for any services from an Opt-Out provider, except in limited emergency or urgent care situations. When seeing an Opt-Out provider, the beneficiary must sign a private contract agreeing to pay the provider’s full fee, which is not subject to any Medicare payment limits. The patient cannot submit a claim to Medicare for reimbursement, making them 100% financially responsible for the entire cost of the service.