A dermatology practice we work with saw a new patient in July who handed over a Medicare Advantage card from a plan the practice had never joined. The front desk assumed it worked like any other out-of-network commercial plan, collected a deposit, and sent the claim. The plan paid the biopsy at the Medicare rate, applied a $45 copay, and denied the destruction code with a remark that the service needed a referral. The biller wanted to bill the patient for the balance. That would have been a violation of federal rules, and it would have cost the practice the right to appeal.
Being a Medicare Advantage non-contracted provider is a common position for independent practices, especially specialists who never signed with the smaller plans in their county. The rules for these claims are not the plan's to set. They come from federal regulation, mainly 42 CFR 422.214 on payment and the Part C appeals rules in 42 CFR Part 422 Subpart M, and they favor the practice more than most billers realize.
A glossary line first. A Medicare Advantage plan, also called Part C, is a private plan paid by CMS to cover a Medicare beneficiary. A non-contracted (or non-contract, or out-of-network) provider is one who has no signed participation agreement with that particular plan. Being enrolled in Medicare is not the same as being contracted with a Medicare Advantage plan.
Key takeaways
- A non-contracted provider must accept, as payment in full, what Original Medicare would have paid, and cannot bill the patient beyond the plan's cost share.
- Plans must pay 95 percent of clean claims from non-contracted providers within 30 days and owe interest on the rest.
- A denied claim can be appealed within 60 calendar days of the remittance, but only with a signed waiver of liability form attached.
- If the plan upholds its denial, it must forward the case to the independent review entity on its own; you do not file a second level.
- HMO, PPO and private fee-for-service plans treat non-contracted providers differently, and the plan type decides whether the claim is payable at all.
What the plan must pay a Medicare Advantage non-contracted provider
The rule at 42 CFR 422.214 says that a provider without a contract establishing payment amounts must accept, as payment in full, the amount it could have collected if the patient were in Original Medicare. That includes the plan's share and the patient's share together. The plan pays the Medicare allowed amount minus the enrollee's cost sharing under the plan, and the enrollee owes only that cost sharing.
Here is a worked example. Suppose a 99214 established patient visit has a Medicare Physician Fee Schedule allowed amount of $130 in your locality. The plan's out-of-network specialist copay is $50. The plan owes $80 and the patient owes $50. If the plan's payment shows $70 and a $50 copay, the plan is short $10 and you can dispute it. If the plan pays $80 and the patient copay is $50, you are done; you cannot bill the patient the difference between $130 and your $210 charge. Many plans also apply the 2 percent sequestration reduction to their share, the same way Original Medicare does, and CMS has said plans may do so.
This is why we tell front desks to stop treating Medicare Advantage out-of-network like commercial out-of-network. There is no balance billing. The upside is that the payment floor is predictable and enforceable. The downside is that a practice with a fee schedule well above Medicare will collect Medicare rates on these visits.
Plan type decides whether the claim is payable
The payment floor only helps when the service is covered out of network in the first place. The plan type on the card tells you most of what you need.
| Plan type | Out-of-network coverage for routine care | What that means for a non-contracted practice |
|---|---|---|
| HMO | Generally none, except emergency, urgently needed care, out-of-area dialysis and plan-authorized referrals | Routine visits are usually denied; get a plan authorization before the visit or treat the patient as self-pay with a signed notice |
| HMO-POS | Limited, for specific services the plan lists | Check the Evidence of Coverage for the point-of-service benefit before scheduling |
| PPO (local or regional) | Covered, at higher enrollee cost sharing | Claim is payable at the Medicare rate; expect a higher copay or coinsurance for the patient |
| PFFS (private fee-for-service) | Covered by any Medicare provider who accepts the plan's terms and conditions | Treating the patient after seeing the card is "deemed" acceptance; you are paid the plan's published terms, usually the Medicare rate |
The dermatology denial in our opening was an HMO. The biopsy paid because the plan treated it as urgently needed; the destruction did not because it was elective in the plan's view and had no referral. The fix was not to bill the patient. It was to request a retrospective authorization from the plan and, when that failed, to file a payment reconsideration with the waiver attached.
The 30-day clean claim rule and interest
Under 42 CFR 422.520, a Medicare Advantage organization must pay 95 percent of clean claims from non-contracted providers within 30 calendar days of receipt, and must pay interest on clean claims paid late, at the same rate Original Medicare uses. A clean claim is one with no defect or missing documentation that prevents timely payment. Contracted providers do not get this protection; their payment terms live in the contract. Non-contracted providers do.
In practice this means your aging report for non-contracted Medicare Advantage claims should look better than your commercial aging, not worse. When we see 45-day-old non-contracted claims with no response, we call the plan and cite the rule. Most plan representatives know it. If they do not, ask for the provider relations department and put the request in writing.
Timely filing is a separate issue. Original Medicare gives you 12 months from the date of service. Medicare Advantage plans set their own limits for non-contracted providers, and 90 to 180 days is common. Read the denial letter; the limit is usually stated there.
How to appeal: the waiver of liability form
A non-contracted provider can request a payment reconsideration, which is the first level of the Part C appeals process, within 60 calendar days of the remittance notice. The catch is the waiver of liability. CMS requires a non-contracted provider to sign a statement saying the provider will not bill the enrollee regardless of the appeal outcome, except for applicable cost sharing. Without that signed statement the plan is not required to process the appeal, and most plans will send a letter asking for it and then dismiss if it does not arrive.
The form itself is short: enrollee name, Medicare number, provider name, dates of service, plan name, and the signed waiver sentence. Many plans post their own version, and CMS has a model. We keep a pre-filled template with our practice details so the biller only adds the patient and claim fields. Attach it to every non-contracted Medicare Advantage appeal, first time, every time. The most common reason we see these appeals fail is not the medical argument. It is a missing waiver.
Once the reconsideration is filed, the plan has 60 calendar days to decide a payment dispute. If the plan upholds its denial in whole or in part, it must forward the case file automatically to the Independent Review Entity, which is the CMS contractor that reviews Part C appeals. You do not file a second-level appeal yourself. The IRE reviews the file and issues its own decision, and the plan must pay within 30 days if the IRE reverses. Track the 60-day clock and, if you hear nothing, ask the plan for the IRE case number.
Mistakes that turn a payable claim into a write-off
Billing the patient for the balance above Medicare is the first and worst. It violates 422.214, it draws complaints to the plan and to CMS, and it forfeits the appeal because you cannot sign a truthful waiver afterward. Collect the plan's cost share and nothing more.
Treating an HMO patient without authorization for non-urgent care is the second. The claim will deny, and the appeal will usually lose, because the plan followed its own rules. If the patient wants to see you anyway, the honest path is a written self-pay agreement before the visit that states the plan will not be billed. That is allowed; hiding the plan card is not.
Filing the reconsideration late, or without the waiver, or to the wrong address, is the third. Denial letters for non-contracted providers list the appeals address and often a fax. Use it, keep the transmission receipt, and log the date. The 60-day clock runs from the remittance date, not from when the biller noticed.
The fourth mistake is the quiet one: assuming the payment was right. Pull the Medicare allowed amount for the code and locality, subtract the copay shown on the remittance, and compare. We find underpayments on non-contracted Medicare Advantage claims more often than on Original Medicare claims, and each one is appealable. If your team wants a second set of eyes on a batch of these, our denial management work includes non-contracted plan disputes.
Questions we hear
Do we have to see Medicare Advantage patients from plans we are not contracted with?
No, with the exception of emergency and urgently needed care and the deemed-provider rule for private fee-for-service plans. For PPO and HMO patients seeking routine care, you can decline the visit or offer a self-pay arrangement, as long as you decide before the service and put it in writing.
Can we use the plan's appeal form instead of a separate waiver?
Some plan appeal forms include the waiver language and a signature line, and that satisfies the requirement. Read the form. If it does not contain the sentence about not billing the enrollee regardless of outcome, attach a separate waiver of liability statement.
What if the plan says the patient was not eligible on the date of service?
That is a coverage question, not a payment dispute, and the enrollee is the party with appeal rights. Ask the patient to call the plan, check the Medicare Beneficiary Identifier through your eligibility tool for the enrollment history, and bill Original Medicare or the correct plan. Our medical billing team runs Medicare Advantage enrollment checks before the visit for exactly this reason.
What to do this week
- Run a report of Medicare Advantage claims from the past 12 months where you are non-contracted, grouped by plan and plan type.
- Compare each paid line against the Medicare allowed amount minus the copay shown, and list every shortfall.
- Build a pre-filled waiver of liability template with your practice details and store it with your appeal letter templates.
- Write a one-paragraph front desk rule: HMO needs authorization, PPO and PFFS are payable at Medicare rates, and no patient is billed above the plan cost share.
- File payment reconsiderations, with the waiver attached, for every denied or underpaid non-contracted claim still inside its 60-day window.
