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Medicare: Participating and Non-Participating Providers

Kathy Foltner

December 3, 2007


What is the difference between participating and non-participating providers for Medicare? What are the options for audiologists in being able to participate in either manner?


Editor's note: Effective 9-9-09, the information in this Ask the Expert has been updated, specifically with regard to audiologists "opting-out" of participation with Medicare. Please refer to the new, updated Ask the Expert here:

Every audiologist must decide if they should participate or not with Medicare, as well as, other third party payors. Most seniors and people in general do look for providers who accept their insurance, so choosing not to participate can have devastating negative affects on a healthcare business. That said, randomly participating with all third party payors without understanding the terms of that participation including reimbursement levels and potential risks can also be devastating to an audiology business.

With Medicare, audiologists basically have three choices;participate as a "participating provider", participate as a "non-participating provider", or "opt-out". One's chosen status with Medicare will dictate who you bill, how much you collect for a given procedure, the responsible party, whether or not you must have a "private contract" with beneficiaries, and what that private contract must include to name a few things.

Although Medicare is a federally funded program, it is also administered by state or regional intermediaries who have been know to interpret Medicare (federal) policy differently. It is always wise to identify, contact, and document in writing any information that is provided to you by your intermediary.

As a general rule:

"Participating Providers" accept assignment from Medicare. The provider bills Medicare at their usual and customary fee;however, Medicare pays the provider 80% of the "allowed amount" for each CPT code. Patients are responsible for 20% of the allowed amount and this 20% should not be waived. The provider cannot bill patients for amounts in excess of the allowed amount and must write off the difference between the allowed amount and usual and customary fees.

"Non-participating Providers" do in fact participate with Medicare. Non-par providers generally do not accept assignment on a regular basis;however, can choose to accept assignment on a case-by-case basis and be reimbursed at the non-par level. Non-par providers must bill Medicare, but Medicare reimburses the patient versus the provider. The amount patients receive from Medicare will be 5% less than the par-allowed amount and the patient pays the provider for services rendered.

A non-par provider can legitimately increase reimbursement by charging the "limiting fees", which represent the maximum allowable reimbursement. Limiting fees, as well as, par and non-par allowed fees can vary by region, state, and even city and can be found at

"Opting-Out" (Editor's note - effective 9-9-09, this information is no longer up to date. Please refer to the latest information here: /askexpert/display_question.asp?question_id=654). If an audiologist sees Medicare beneficiaries and chooses not to participate with Medicare, they must opt-out and in many states sign an opt-out affidavit. That opt-out affidavit also includes private contract requirements. If you choose to opt-out, you cannot re-apply for Medicare participation status for two years. It is very important to understand the impact third party payor participation can have on one's practice before committing to any level of provider status or choosing to opt-out.

Note: "Audiologists" are not specifically listed under physicians or practitioners who are eligible to contract privately;however, audiologists do meet the criteria of being "legally authorized to practice by the state and otherwise meet Medicare requirements". Various Medicare intermediaries can interpret this differently.

Kathy Foltner, AuD, is CEO of AuDNet, Inc. She also teaches courses in Practice Management and Basic Business at Rush University Medical Center and PCO. Dr. Foltner can be reached at or 312-593-1787.

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kathy foltner

Kathy Foltner

CEO of AuDNet, Inc.