I am continuing my short series on Medicare participation and benefit assignment. This week, I am covering the written beneficiary authorizations that suppliers must secure before filing claims on behalf of their Medicare patients.

This article relies heavily on explanations for participation and assignment I wrote about here and here. If you haven’t already, you may want to go back and read those first.

Next Episode: Thursday, June 20, 2024

Authorization to File a Claim on the Beneficiary’s Behalf

Medicare benefits belong to the beneficiary. In order for DME suppliers to file claims on their behalf, regardless of whether the supplier has accepted assignment or not, the beneficiary must grant authorization to do so in writing. A typical authorization will read something to the effect of:

“I request payment of government benefits either to myself or to the supplier filing this claim.”

Medical Record Release

All suppliers, regardless of participation status or claim-level assignment election, must secure a medical records release from the beneficiary to share medical records and coordinate with other entities involved in their care. Examples include:

  • Physicians and other practitioners.
  • Clinics.
  • Laboratories.
  • Hospitals.
  • Hospice and home health agencies.
  • Skilled nursing facilities.

The following is an example – taken from the CMS 1500 Health Insurance Claim Form – of typical language found in a medical records release:

“I authorize the release of any medical or other information needed to process this claim.”

Assignment of Benefits

In cases where the supplier voluntarily accepts assignment of Medicare benefits, beneficiaries must also authorize the payment of benefits directly to the supplier. Again, the 1500 claim form has a good example of qualifying language:

“I authorize the payment of Medical benefits to the supplier filing this claim.”

CMS does not, however, require suppliers to obtain a separate assignment of benefits (AOB) authorization in cases where assignment is mandatory. Examples include when the supplier is:

  • A participating Medicare supplier.
  • A contracted bid supplier in a competitively bid area.
  • Selling covered medications.

Duration of Beneficiary Authorizations

The duration of these beneficiary authorizations varies based on the whether or not the supplier accepts assignment for the specified service. CMS permits a single authorization to remain in effect indefinitely, unless changed in writing, when suppliers accept assignment. This is because the beneficiary’s financial exposure is fixed to the Medicare fee schedule.

Conversely, beneficiary authorizations for non-assigned claims only apply to the single claim and date of service, even if the authorized claim is part of a rental cycle. For this reason, suppliers that do not accept assignment must secure multiple authorizations over time as the customer rents equipment or requests additional refills of supplies.

Give us a shout if you have any questions about beneficiary authorization or if we can help in any way.

Take care,