Understanding Medicare Enrollment, Part III: Non-Par Enrollment, Medicare Billing, and Patient Balance Billing

Medicare Par/Non-Par Comparison

Comparison is based on a Medicare Allowable Amount of $150

Let’s go through one example that assumes that the allowable charges for Medicare participation are $150. In the PAR scenario, the provider must accept assignment. The provider receives 80% of the allowable amount, while the patient’s supplement covers the remaining 20%. The remaining 20% becomes their responsibility if the patient lacks a supplement. 

The following scenario involves a Non-PAR provider accepting assignment. The Non-PAR allowable amount is 95% of the PAR allowable, totaling $142.50. Medicare compensates the provider 80% of that amount, which is $114. The remaining 20%, or $28.50, is either covered by the patient’s supplement or paid by the patient. 

The third example involves a Non-PAR provider who does not accept assignment. The allowable payment of $142.50 increases by 15% to $163.88. The provider collects this amount at the time of service and bills Medicare according to their normal fee schedule. The Medicare payment to the patient is 80% of the Non-PAR allowable amount of $142.50, which totals $114. The supplement pays the patient 20% of the Non-PAR allowable, or $28.50. The patient pays the provider the remaining balance of $163.88, which amounts to $21.38 at the time of service. 

The example oversimplifies the actual amounts for non-par outpatient rehab practices that do not accept assignment, as the limiting charge must be adjusted for the Multiple Procedure Payment Reduction (MPPR). 

Correctly Calculating the Patient Charges When Not Accepting Assignment

For Part B Medicare participating providers, the allowable amount is calculated as the sum of 100% of the first unit of the Medicare Physician Fee Schedule’s highest relative value and dollar amount CPT code. The MPPR is applied to all other units of the remaining CPT codes billed that day. Finally, the 2% Sequestration amount is deducted to arrive at the total allowed amount for the services rendered on that Date of Service (DOS). For Part B Non-PAR therapy services, the maximum amount you may collect from the patient is the Limiting Charge minus the MPPR. For Non-PAR providers not accepting assignment, the 2% Sequestration Fee is not deducted from the payment to the provider; it is deducted from the allowed amount sent to the patient.

Although this may sound complicated, it is easily accomplished with the right tools at your disposal. You will need the Medicare Area fee schedule, which is available on your Medicare Administrative Contractor’s (MAC) website. You can also obtain the fee schedule for your area from the CMS.gov website. Additionally, you will need the MPPR fee schedule, which is also available on the fee schedule pages of your MAC’s website. Let’s see what these look like.

Noridian Medicare Physician Fee Schedule for Area 18 (Los Angeles)

‍

And here is an example for the MPPR fee schedule from the same MAC:

‍

‍

If you did a treatment consisting of a Low Complexity Evaluation, 1 unit of Neuromuscular Reeducation, and 1 unit of Therapeutic Exercise. The Non-PAR without assignment fee due at the time of service would be:

• 97161 $118.86 (highest RVU value/Highest Limiting Charge from fee schedule example)
• 97112 $26.35 (MPPR reduced fee)
• 97110 $23.69 (MPPR reduced fee)

Adding these charges brings the total for the day’s treatment to $168.90, which should be collected from the patient at the time of service. Additionally, a claim should be submitted to Medicare using your regular practice fee schedule.

Alternatively, if you are an APTA member, you can download the Medicare Fee Calculator. This tool is updated annually and whenever the fee schedule is modified through Congressional action to adjust the Medicare Fee Schedule Conversion Factor it is based on.

Here’s what it looks like:

To use it to calculate Non-PAR without assignment fees

• Select your Medicare Service Area from the drop-down box
• Select Non-Participating in Medicare and not accepting assignment from the second drop-down box
• Enter your CPT codes and the number of units of each code in the gray box
• Look above at the line “Total payment with 50% MPPR applied” and look across the line to the Gray box under the title “Without 2 % Sequestration” to find the fee for that treatment to be collected at the time of service.
• In this example, the treatment was one unit each of 97110, 97140, and 2 units of 97530.
• The correct charge is $122.53.

This tool also has a wealth of additional data available, including the Total RVUs, the Work RVUs, Practice RVUs, and Malpractice RVUs, along with the calculations for Non-PAR accepting assignment and Participating Provider fees.

In the next and last article in this series, we will discuss fee schedules for cash-based practices, and look at dealing with Direct Access patients in Non-PAR practices.