The Original Medicare plan – Part A (hospital) and Part B (medical) – has no doctor network. You may get care from any provider who accepts Medicare assignment and you are not subject to referrals if you wish to see a specialist.
Medicare publishes a list of prices it will pay for thousands of different services and procedures. Medicare assignment means the health care provider has agreed to be paid (in full) according to that fee schedule.
Physicians rarely decline Medicare assignment; 97% of all doctors and hospitals are "Medicare participating providers". Psychiatrists and cosmetic surgeons are the most common groups of doctors to refuse assignment.
A doctor may wish to charge $150 for an office visit. If the Medicare fee schedule says it will pay $100 for a visit, the doctor must accept that amount as payment in full if he is a participating provider.
The patient is not responsible for the difference.
Medicare supplement insurance plans are designed to mirror the Original Medicare plan. If you have a supplement, you can still get care from any provider who accepts Medicare.
Provider networks, referrals and prior authorization rules are used by insurance companies to control costs and provide extra benefits not covered by Original Medicare.
If you are thinking about joining a Medicare Advantage plan, or switching to a different one, it is essential that you check to see if your preferred doctors and hospitals are in the plan's provider network.
One in every four Medicare Advantage plans has a "narrow network" containing fewer than 30% of the doctors in the plan's service area. On the other hand, one in five has a "broad network" in which more than 70% of doctors are included.
Although Part D plans also have networks, those provider networks are very large.
Instead of limiting their members' choices, Medicare drug plans usually designate certain pharmacies as "preferred" in exchange for the drug store giving special discounts to the plan.
For example, CVS pharmacies may agree to charge the plan less money than Walgreens, Walmart or Rite-Aid in order to be added to the plan's preferred pharmacy network.
These discounts are usually shared with the drug plan's members. While enrollees can choose from thousands of drug stores, they pay less (sometimes much less) when they use a preferred pharmacy.
In some cases, discounts may be used to lower the plan's deductible or cover medicines they would not normally cover on its drug list (called a formulary).