Do you ever wonder why some medical providers accept Medicare assignments and others do not?
Or why some physicians charge you more for the same services?
If you're a healthcare provider or patient going through Medicare, knowing the difference between Participating (PAR) and Non-Participating (Non-PAR) providers is crucial. With recent changes to Medicare in 2025, choosing correctly will affect healthcare reimbursement rates, administrative burden, and patient satisfaction.
This blog will discuss these two provider types, compare their differences, and how outsourcing medical billing can help providers optimize their financial strategy.
What is a PAR Provider in Medical Billing?
A Participating (PAR) provider under Medicare will accept Medicare's approved rate as payment in full for all covered services. This indicates that the provider will accept assignment so that patients will only be asked to pay their required deductibles and coinsurance levels. PAR providers usually have smoother billing procedures and faster Medicare reimbursements.
What is a Non-PAR Provider in Medical Billing?
A Non-Participating (Non-PAR) provider can have the option to accept Medicare patients but does not always commit to accepting Medicare's approved amount in full payment. These providers may choose to accept assignments on a case-by-case basis or bill patients for an amount greater than the Medicare-approved amount, subject to limiting charges. But they will have slower reimbursement and higher administrative complexities.
Difference Between PAR vs. Non-PAR Providers
The below table highlights the main differences between PAR and Non-PAR providers:
| Aspect | PAR Provider | Non-PAR Provider |
| Medicare Assignment | Always accepts the assignment and Medicare’s approved rates. | Can accept assignment on a case-by-case basis but is not required to do so. |
| Reimbursement Rate | Receives 100% of the Medicare-approved amount. | Receives 95% of the Medicare-approved amount for non-assigned claims. |
| Patient Billing | Patients only pay deductibles and coinsurance. | Patients may be billed up to 15% more than the Medicare-approved amount (limiting charge applies). |
| Claim Submission | Direct submission to Medicarewith quick processing. | Must submit claims to Medicare on behalf of patients, but reimbursement may take longer. |
| Payment Speed | Medicare directly processes faster payments as claims. | Delayed payments as patients may need to pay upfront and get reimbursed later. |
| Patient Volume | Higher patient volume as many Medicare beneficiaries prefer PAR providers. | Lower patient volume as out-of-pocket costs may be higher for patients. |
| Paperwork & Administrative Workload | Less administrative burden since Medicare handles payments directly. | More complex as the provider must track payments and collections from patients. |
| Flexibility in Charges | No flexibility, as they must accept Medicare’s set rates. | Can charge more than the Medicare-approved amount (within limits). |
| Public Perception & Patient Trust | More attractive to Medicare patients due to predictable costs. | Some patients may avoid non-PAR providers due to potential additional charges. |
Which is the Right Choice?
The decision to select PAR or non-PAR providers is based on the financial objectives of the practice and the demographics of patients. PAR providers enjoy predictable, stable payments and reduced claims processing, which suits them best to keep administrative loads at a minimum. Non-PAR providers might offer higher prices but their billing functions are quite complicated to handle with delayed reimbursement possibilities. Hospitals need to explore their Healthcare Practices Revenue Cycle Management solution requirements and administrative capabilities together with patient needs before selecting a provider.
Conclusion
The most recent adjustments to Medicare stand as evidence that professionals must master the difference between PAR and non-PAR provider regulations. Providers may want to seek professional advice to navigate such complexities and stay compliant. Outsourcing medical billing services to a trusted company like 24/7 Medical Billing Services can assist healthcare providers in achieving maximum reimbursements, minimizing administrative hassles, and maintaining streamlined revenue cycles. Professional help ensures providers can focus on providing quality patient care while maximizing their bottom line.
FAQs
Q1. Can a provider modify their Medicare participation status?
Ans: Providers can switch between PAR and Non-PAR status once a year during the Medicare open enrolment period.
Q2. How can a PAR provider transition to non-PAR status?
Ans: A PAR provider must send a signed letter on official letterhead to their Medicare contractor stating their intent to opt-out.
Q3. Why do some providers prefer non-PAR status?
Ans: Non-PAR providers can charge patients up to 15% above Medicare-approved rates, giving them more pricing flexibility.
Q4. How does a non-PAR provider impact patient expenses?
Ans: Patients may have higher out-of-pocket costs since non-PAR providers can bill beyond the Medicare-approved amount.
Q5. How do 2025 Medicare reimbursement changes affect providers?
Ans: A reduction in the Physician Fee Schedule (PFS) conversion factor diminishes the payments received by PAR and Non-PAR medical providers.
Q6. Can non-PAR providers offer telehealth services in 2025?
Ans: Yes, but with restrictions—urban patients must visit clinical sites except for behavioral health services.
Q7. How do Medicare Advantage changes impact providers?
Ans: Medicare Advantage now covers mental health professionals, benefiting PAR providers while potentially reducing patients for non-PAR providers.
Q8. Can a provider change their Medicare status mid-year?
Ans: No, the Medicare participation status of providers remains unchanged throughout the entire year without any possible modifications.
Q9. What happens if a non-PAR provider overcharges beyond the limit?
Ans: Exceeding the 115% limiting charge violates Medicare rules and may result in penalties or exclusion from the program.
Q10. How can providers offset reduced Medicare reimbursements in 2025?
Ans: PAR providers can use APCM codes for chronic care, while non-PAR providers may renegotiate contracts with Medicare Advantage plans.