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How Doctors Work with Medicare

When it comes to Medicare, doctors have three options. They can be participating or nonparticipating, or they can choose to opt out entirely. This status doesn't just determine their availability for Medicare beneficiaries; it also decides what you will pay for doctor's services and other health-care treatments.

Which doctors are participating and what they may charge

Participating doctors are providers who accept Medicare assignment. This means that they will accept the Medicare-allowed amount as a full payment for their services. They agree to be paid directly by Medicare. After submitting medical claims to Medicare, Medicare would then determine how much the service costs or the Medicare-allowed amount. A participating doctor will charge Medicare for 80% of the Medicare-allowed cost and charge the Medicare beneficiary 20% of that same amount only after a beneficiary's yearly deductible has been met.

Nonparticipating doctors can either choose to accept Medicare assignment or not. If the doctor chooses not to accept assignment, an additional 15% above the cost of the service as determined by Medicare may be charged. This additional charge is also known as a Medicare excess charge. For beneficiaries who see nonparticipating doctors and have reached their yearly deductible, the total out-of-pocket cost would be a maximum of 35% of a Medicare approved charge rather than just 20%.

Medicare Supplement (or Medigap) plans can help pay for the 20% that Medicare does not pay as well as any Medicare excess charges. Use our Medicare Supplement plan comparison tool to find a plan with the cost coverage you need to pay for services received by participating and nonparticipating doctors.

Doctors who have opted out of Medicare are not enrolled in the Medicare program like participating and nonparticipating doctors. Doctors who opt out are allowed to charge self-determined costs for services. They are not allowed to bill Medicare or any Medicare-related insurance plans. If a patient sees a doctor who has opted out of Medicare, the entire bill becomes the responsibility of the patient. It is important to note that doctors are not required to accept the Medicare program; even if doctors are enrolled in Medicare, they are not obligated to take every patient.

How doctors are reimbursed by Medicare

If your provider does take Medicare, then the services received are, in part, reimbursed through the Medicare program.

Since 1992, the Medicare program has been using a Resource-Based Relative Value Scale (RBRVS) to determine how doctors should be paid for the health-care services they provide. Instead of being paid on an absolute fee-for-service basis, payments for services through the RBRVS system are relative to the combination of three separate determining factors: doctor's work, relative practice expenses, and professional liability insurance. The reimbursement fee is then adjusted for the geographical location in which the service is provided.

Three times a year, a special committee of doctors meets to discuss recommendations on updates to how much doctors should be paid for their work and other relative values. The committee, also known as the Relative Value Scale Update Committee (RUC), is made up of individuals convened by the American Medical Association (AMA) and other medical-specialty trade groups. Around 90% of the recommendations by the RUC are followed by the Center for Medicare and Medicaid Services (CMS), allowing the committee great influence over the billions of taxpayer dollars in the Medicare program.

Check if your doctors participate in Medicare

Because Medicare reimbursement rates are significantly lower than other private insurers and many doctors are opting out of Medicare, this makes the availability of doctors even more complicated for Medicare beneficiaries.

All beneficiaries should double-check to see if their current doctors are still enrolled with Medicare either as participating or nonparticipating providers. If your provider is no longer enrolled in Medicare or you would like to explore other health-care provider options, visit Medicare's health-care provider directory for doctors taking Medicare payments in your area.

Medicare Advantage Plans, sometimes called "Part C" or "MA Plans," are offered by private companies approved by Medicare and provide Medicare Part A and Part B coverage. Medicare prescription drug coverage is insurance run by an insurance company or other private company approved by Medicare. A Medicare Supplement plan is a health insurance plan provided by a private company that fills in the "gaps" in original Medicare coverage.

Medicare has neither reviewed nor endorsed this information.

To learn about Medicare plans you may be eligible for, you can:

  • Contact the Medicare plan directly.
    • Call 1-800-MEDICARE (1-800-633-4227), TTY users 1-877-486-2048; 24 hours a day, 7 days a week.
  • Contact a licensed insurance agency such as PlanPrescriber's parent company, eHealth.
    • Call eHealth's licensed insurance agents at , TTY users 711. We are available . You may receive a messaging service on weekends and holidays from February 15 through September 30. Please leave a message and your call will be returned the next business day.
    • Or enter your zip code where requested on this page to see quote.
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