A dermatologist who joined a three-physician group last fall asked her new practice manager a question that sounded simple: "Are we participating with Medicare?" The manager said yes. The dermatologist said that was odd, because at her old practice she collected more than the Medicare allowed amount and nobody had ever told her that was wrong. It wasn't. Her old practice was non-participating and billed unassigned, so patients paid a limiting charge and Medicare reimbursed them directly. Her new practice is participating, and the same visit now pays about 9 percent less at the top line, but the money arrives from Medicare in 14 days instead of from patients over 90.
Both models are legal. Both are common. What we rarely see is a practice that chose its Medicare participation status on purpose, with the numbers in front of it. Most inherited the decision from whoever filled out the enrollment paperwork years ago, and the front desk collects whatever the billing system prints.
This article explains the three statuses as they stand in April 2026, what each one does to the fee schedule, the patient's bill and your cash flow, and the calendar you have to respect to change. For readers without a billing background: "assignment" means the physician accepts Medicare's approved amount as payment in full and Medicare pays the physician directly; without assignment, Medicare pays the patient.
Key takeaways
- Participating (par) physicians accept assignment on every Medicare claim and are paid 100 percent of the Medicare Physician Fee Schedule amount, 80 percent from Medicare and 20 percent from the patient after the deductible.
- Non-participating (non-par) physicians are paid a fee schedule amount that is 5 percent lower, may accept assignment claim by claim, and on unassigned claims may bill the patient up to the limiting charge, which is 115 percent of the non-par amount.
- Opt-out physicians file an affidavit, sign a private contract with every Medicare patient before treating them, and submit no claims to Medicare for two years at a time; the affidavit renews automatically unless cancelled.
- Status is set per enrollment record and can only be changed during the annual participation enrollment period, mid-November through December 31, for the following year.
- Qualified Medicare Beneficiary patients cannot be balance billed under any status, and several states restrict or prohibit balance billing above the Medicare approved amount.
The three statuses and what each one means
Participating means the physician signed the CMS-460 participation agreement. For the whole calendar year the physician accepts assignment on all Medicare Part B claims. Medicare pays 80 percent of the approved amount to the practice, the practice bills the patient the remaining 20 percent plus any unmet Part B deductible ($283 in 2026), and that is the end of it. Medicare also forwards the crossover claim to the Medigap plan for you.
Non-participating means the physician is enrolled in Medicare but did not sign the CMS-460. The fee schedule amount for a non-par physician is 95 percent of the par amount. On each claim the physician can either accept assignment (80 percent of that reduced amount from Medicare, 20 percent from the patient) or bill unassigned. On an unassigned claim the practice collects from the patient, up to the limiting charge, and Medicare sends its payment to the patient. Either way the claim still goes to Medicare within the one-year filing window; mandatory claim submission applies to every physician who treats Medicare patients unless they have opted out.
Opt-out is a different animal. The physician files an opt-out affidavit with the Medicare Administrative Contractor (MAC), and for two years neither the physician nor Medicare submits or pays claims for that physician's services, with one exception for emergency or urgent care furnished to a Medicare patient who has not signed a private contract. Every Medicare patient the physician treats must sign a private contract, before the service, stating that the patient will pay out of pocket and Medicare will not reimburse. Since the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), the affidavit renews automatically every two years unless the physician notifies the MAC at least 30 days before the period ends. Opted-out physicians may still order, refer and prescribe, and Medicare covers what they order while they remain on the CMS opt-out list.
The math: a 99214 under each status
Take an established patient office visit, CPT 99214, and assume a rounded par fee schedule amount of $130 in your locality. The patient has met the Part B deductible and has no secondary coverage. Here is how the same visit pays under each status.
| Status and assignment | Allowed amount | Medicare pays (80 percent) | Patient pays | Practice collects in total | Who receives the Medicare check |
|---|---|---|---|---|---|
| Participating (always assigned) | $130.00 | $104.00 | $26.00 | $130.00 | The practice |
| Non-par, assigned claim | $123.50 (95 percent of par) | $98.80 | $24.70 | $123.50 | The practice |
| Non-par, unassigned claim | $123.50, limiting charge $142.03 | $98.80 to the patient | $142.03 to the practice | $142.03 | The patient |
| Opt-out with private contract | None; the contract sets the fee | $0 | The contracted fee | The contracted fee | Nobody |
The limiting charge is 115 percent of the non-par amount, which is 109.25 percent of the par amount. On this visit that is $142.03 against $130.00, a gain of $12.03 per visit. That is the whole financial case for non-par status, and it only exists on unassigned claims. A non-par physician who accepts assignment on most claims, which many do because collecting $142 from an 80-year-old at checkout is unpleasant, simply earns 5 percent less than a par physician for the same work.
Two things eat into the 9.25 percent. First, the practice is now collecting the entire visit from the patient, and patient balances over $100 collect far less reliably than practices assume. Second, Medigap Plan F and Plan G cover Part B excess charges, but patients with Plan N or no supplement pay the excess out of pocket and they notice. For Qualified Medicare Beneficiary (QMB) patients any balance billing at all is prohibited by federal law, whatever the physician's status.
How Medicare participation status changes the front desk and the posting desk
Par is operationally the simplest: eligibility check, collect the 20 percent estimate or bill after the remit, post the 835, and the Medigap crossover happens without staff involvement.
Non-par unassigned changes everything downstream. The front desk collects the limiting charge at the visit, or the practice sends a statement for it. The claim goes to Medicare with the assignment indicator set to "no" (item 27 on the CMS-1500, or its 837P equivalent). Medicare pays the patient and sends the practice a remittance showing the allowed amount and a payment of zero. Your posting staff need a rule for that remit or they will post a $98.80 contractual adjustment against a balance the patient actually owes. The Medigap crossover does not happen automatically on unassigned claims; the patient or the practice files with the supplement, and many patients never do.
Opt-out removes Medicare from the workflow but adds a document control problem. The private contract must be signed before treatment with every Medicare patient and kept for the opt-out period, and claims for that physician stop on the effective date. The affidavit is for the individual physician, not the group; one opted-out physician alongside four par physicians is normal, but the scheduling system needs to know which patients can see whom.
The calendar and the paperwork
Participation status is elected for a calendar year. Every fall, usually in mid-November, CMS opens the annual participation enrollment period, which closes on December 31. During that window a par physician may terminate participation and a non-par physician may sign the CMS-460, in both cases effective January 1. Otherwise the choice is made once, at initial enrollment.
Opting out follows its own calendar. The opt-out takes effect on the date the affidavit is filed if the physician is not currently par, or on the first day of the next calendar quarter if the physician is par and files at least 30 days before that quarter starts. A physician may cancel a first opt-out within 90 days of its effective date; after that the full two years apply. The renewal is automatic, and this is where we see mistakes: a physician who opted out in 2020 for a concierge practice, closed it in 2023 and joined a group, is still on the opt-out list in 2026 because nobody cancelled the renewal, and the group's claims for her deny.
- Before the fall window, pull the MAC fee schedule for your top 25 codes with the par, non-par and limiting charge columns side by side, and estimate the share of Medicare visits you could realistically bill unassigned and collect in full.
- Check your state's balance billing law; New York caps physician balance billing at 5 percent above the Medicare approved amount and several states, Massachusetts among them, prohibit it outright.
- If the decision is to change, submit the CMS-460 or the termination letter before December 31, get the MAC's confirmation in writing and update the billing system's assignment default on January 1.
The mistakes we see in audits
The first is a non-par practice charging above the limiting charge. The billing system was loaded with the practice's standard fee, say $185 for a 99214, and unassigned patients were billed $185 when the limit was $142.03. Medicare monitors limiting charge violations through the claims you are required to submit, and repeated overcharges bring refund demands and civil monetary penalty exposure. Load the limiting charge as the patient fee for Medicare unassigned claims, by code, and update it each January.
The second is treating status as a group-wide fact. Participation is elected per enrollment record, so a physician who reassigns to a par group can still be non-par under her own enrollment elsewhere. Whoever maintains the CMS-855I and CMS-855R records should keep a status field per physician per enrollment, which is how our provider enrollment team tracks it.
The third is the opt-out physician who "just this once" bills Medicare for a longtime patient. There is no once; knowingly submitting a claim during an opt-out period can void the opt-out and the private contracts with it.
The fourth is quieter: the unassigned remit posted as if it were assigned. We find this in revenue leakage audits more often than practices expect. The 835 shows an allowed amount and zero payment, the poster reads it as a contractual adjustment, and the patient balance that should have been $142.03 becomes $24.70. The practice gives away the excess it went non-par to collect.
Questions we hear
Can a non-participating physician accept assignment for some patients and not others?
Yes. Assignment is a claim-by-claim choice for non-par physicians. Many practices accept assignment for QMB patients (where they must) and for patients in financial hardship, and bill unassigned for everyone else. Either way the claim still goes to Medicare, and unassigned collections stop at the limiting charge.
If our physician opts out, can our nurse practitioner still bill Medicare for the same patients?
Yes, if the NP has not opted out, but only for services she personally performs under her own enrollment, never as incident-to the opted-out physician. Remember too that the private contract is between the patient and the physician, and its language should make clear which clinicians it covers.
Does participation status affect Medicare Advantage claims?
Not directly; Medicare Advantage payment is governed by your contract with the plan, or for non-contracted providers by the plan's obligation to pay at least what traditional Medicare would have paid. Opt-out does affect it: most Medicare Advantage plans will not pay an opted-out physician except for emergency care. Confirm with each plan before assuming.
What to do this week
- Look up each physician's current status in PECOS and on the CMS opt-out list, and write it into your provider roster next to the NPI.
- Pull the 2026 MAC fee schedule with the par, non-par and limiting charge columns for your top 25 codes and save it where the front desk and the posters can see it.
- If any physician is non-par, check that the Medicare patient fee loaded in your billing system for unassigned claims equals the limiting charge, not your standard fee.
- Review how unassigned 835s were posted for the last quarter and correct any patient balances that were adjusted off in error.
- Put a note on the November calendar to decide, with the numbers, whether each physician's status should change for 2027.
