R.J. Hedges Podcast

Participating or Non-Participating, That is the Question

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  • Participating means that you are accepting the Medicare reimbursement or allowable for each product you bill for.
  • Non-Participating means that you are not accepting the Medicare reimbursement.

    • So participating means accepting Assignment?

    • Yes, you are accepting the Medicare allowable or Assignment. You also agree to charge the patient no more than 20% of the allowable at the time of dispensing. Medicare sends the supplier the reimbursement of 80%, less the 2% sequestration fee. If you know the patient has a secondary insurance carrier, the copay should only be the balance after the secondary payment. This can be collected at the time of dispensing which is preferred or after all payments are received.

      • I guess this means if I’m non-participating, I’m not accepting Assignment

      • Correct, you are not accepting the Medicare assignment.

        • Is the pharmacy penalize in any way?

        • No, there is no penalty to the supplier, except if the supplier is a competitive bid awardee supplier who must be a participating supplier. The major difference is the supplies is not accepting assignment. Which means the Medicare reimbursement will be sent to the patient. The supplier collects the full amount from the patient at the time of dispensing. This fee can be your Usual & Customary (U&C) down to the Medicare allowable. It is the supplier’s choice for each dispensing action.
        • Yes, you can accept assignment on a specific item or a specific patient if you so choose

          • OK, we now understand this, there must be a reason why you want to talk about this subject now. It doesn’t sound very important or fun?

          Well it is definitely not fun!


          However it is very important. Medicare reimbursement are continuing to be slashed and every supplier should look at this option every year, but especially this year. There is only a short time period where a supplier can change their status from Participating to Non-Participating and it’s coming in November. The official time frame is from November 15 to December 31, but we strongly encourage not to go past December 15th. NSC states the letter must be post marked by December 31st, but if there is a glitch, the supplier has to wait a year. It doesn’t matter whose fault it is, you must wait until next November 15th.

          The requirement states, “if you are currently a participant, write to each carrier to which you submit claims, advising of your termination effective the first day of the next calendar year. This written notice must be postmarked prior to the end of the current calendar year.”

          In plain English, the supplier writes a letter on their letterhead to the National Supplier Clearinghouse for CMS 855S products or to the Part B Contractor for CMS 855B products advising the contractor you are terminating you participating status. The letter must contain your Legal Business Names as reported to the IRS, Address on your CMS 855, PTAN, NPI and the “Authorized Persons” signature. CMS doesn’t tell you that.

          We are writing a blog on this subject and it will be posted on our public website, www.RJHedges.com and we will have a sample letter there for you to download. Our clients will find the sample letter on the Compliance Portal® in the Message Center.

          OK, we know what this means and how do to it, but what are the reasons to make the choice?

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          R.J. Hedges PodcastBy RJ Hedges