Medicare Part B Excess Charges

A Medicare excess charge is an extra cost added to your health care bill by a doctor or provider who doesn’t participate in Medicare.

Providers who participate in Medicare accept assignment, meaning they agree to charge you only the Medicare-approved amount for their services.

Doctors who accept assignment bill Medicare directly for the care you receive. Medicare pays 80%, and you’ll receive a bill for the other 20%.

However, not all doctors participate in Medicare and accept assignment. Those who don’t may charge you up to 15% more than the Medicare-approved amount.

This additional Medicare cost is known as a Part B excess charge. It is also referred to as balance billing or a limiting charge.

Doctors who don’t accept assignment can also ask you for full payment at the time of service. You may have to undergo the reimbursement process on your own if you want Medicare to pay its 80% share.

Most doctors, providers and suppliers accept assignment, but you should always double check to make sure.

You can also use the Medicare.gov Physician Finder tool to find a doctor in your area who participates in Medicare.

Neither Original Medicare nor Medicare Advantage plans cover excess charges.

However, two types of Medigap supplement insurance policies do.

There are 10 different types of Medigap plans. Each is designated by a letter and must follow federal and state laws designed to protect the policyholder.

Basic benefits must be the same for each type of plan, no matter where the plan is purchased. Cost is typically the only difference between Medigap policies of the same letter because insurance companies can adjust rates depending on several factors.

A vast majority of physicians and practitioners — 97% — participate in Medicare and accept assignment, according Kaiser Family Foundation. And 89% of non-pediatric physicians accepted new Medicare patients, according to the 2022 report.

Only 1% of non-pediatric physicians — or about 10,105 doctors across the country — have completely opted-out of the Medicare program, according to the 2022 KFF report.

But if you’re faced with an excess charge, how does it work?

Suppose Medicare’s allowed charge for a doctor’s appointment is $100, but you visit a physician who doesn’t accept Medicare assignment.

The doctor can charge you an extra 15% for the appointment, or in this case, an additional $15.

Instead of sending the bill directly to Medicare, the doctor may ask you to pay the entire amount up front.

It is then your responsibility to file a claim with Medicare for reimbursement.

That reimbursement would be equal to only 80% of the Medicare-approved amount, or $80.

In this case, your total out-of-pocket cost for the visit is $35.

In contrast, if you had visited a doctor who accepts Medicare assignment, you would owe $20 out of pocket, and you wouldn’t have to handle the reimbursement process on your own. Instead, the doctor would bill Medicare directly, and you’d receive a bill later for the amount you owe.

Some states have taken steps to protect Medicare beneficiaries against excess charges.

Eight states have passed laws forbidding health care providers from charging you more than the Medicare approved rate.

Beneficiaries in these states may consider purchasing a Medigap Plan N policy instead of Plan G.

Both offer similar coverage, but because Plan N doesn’t cover excess charges, it charges lower monthly premiums than Plan G.