Medicare Part B excess charges are not common. Once in a while, a beneficiary may receive a medical bill for an “excess charge.” Doctors that don’t accept Medicare as full payment for certain healthcare services may choose to charge up to 15% more for that service than the Medicare-approved amount. Below, we’ll explain how excess charges work and what you can do to avoid them.
What Are Medicare Part B Excess Charges
Healthcare providers generally accept Medicare assignment. Meaning, they agree with Medicare’s payment terms and rates and bill Medicare accordingly. However, there are a few doctors that may not accept Medicare-assignment and will charge you up to 15% more than the Medicare-approved amount for a specific service. Medicare excess charges are also known as balance-billing.
Today, over 96% of U.S. doctors choose to participate with Medicare and agree only to charge the amount Medicare has approved for the service.
How Medicare Part B Excess Charges Work
Let’s say you visit a nonparticipating podiatrist to get a wart removed from your foot. If the Medicare allowable charge for the procedure is $300, the podiatrist could bill you up to an additional $45. Making the total cost for the procedure, $345. If you’ve already met the Part B deductible, your out of pocket costs would be $45 in addition to the 20% coinsurance. 20% of $300 is $60. Therefore, your total out of pocket cost for the procedure would be $105.
How to Avoid Part B Excess Charges
The most obvious way to avoid Part B excess charges is by only visiting doctors who accept Medicare Assignment. The easiest thing you can do is simply ask them if they accept assignment upon scheduling an appointment. You can also use the Medicare.gov physician finder tool to help speed up the process of finding a doctor who participates in Medicare. Additionally, you can supplement your Medicare coverage with a Medigap plan that protects you from excess charges.
Medicare Overcharge Measure
The Medicare Overcharge Measure prohibits providers from charging beneficiaries excess charges. Currently, eight states are prohibited from charging excess fees due to the MoM law. If you live in one of these eight states, you’ll never have to worry about excess charges.
Common Questions About Part B Excess Charges
What Medigap plans can protect you from excess charges?
Two Medigap plans cover excess charges, Plan F and Plan G. Both of these letter plans have high-deductible versions that will also protect you from excess charges.
What states allow Medicare Part B excess charges?
All but eight states allow Medicare Part B excess charges.
As stated above, excess charges are not very common. The national percentage of doctors in the U.S. that charge Part B excess charges are only around 5%.
How do you know when a provider charges you an excess fee?
You normally do not see a bill until after it was submitted to Medicare first.
Does that mean I have to ask each doctor I see if he/she accepts Medicare assignment upfront? Also, am I right to say that since I live in NY, providers cannot charge an excess fee?
You need to ask every provider you see if they accept Medicare assignment. At that time, you will know if you should expect to see an excess charge on the upcoming billing statement. Yes, it is correct to say you don’t have to worry about excess charges if you live in New York.
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Lindsay Engle is the Medicare expert for MedicareFAQ. She has been working in the Medicare industry since 2017. She is featured in many publications as well as writes regularly for other expert columns regarding Medicare. Lindsay is part of the Medicare Marketing Association, the Medicare Supplement Insurance Professionals group, and the DecisionHealth – Medical Practice & Hospital Group. You can also find her over on our Medicare Channel on YouTube as well as contributing to our Medicare Community on Facebook.
4 Comments
I am currently on supplement plan G under part B. I am considering a change to plan N. If I have a carpal tunnel procedure and the doctor charges $12,000 and the Medicare assignment is for $4,000, could my doctor charge me An excess fee of 15% on the remaining unpaid $8,000? Thank you, Steve
Hi Steve! Doctors who do not accept assignment receive 95% of the Medicare-approved amount. Then they can add an excess charge of up to 15% of what Medicare will pay. So for your example, if the Medicare-approved amount is $4,000, and your doctors do not accept Medicare assignment, then Medicare will only pay 95% of the Medicare-approved amount. ($4,000 x 95% = $3,800) That is the amount your doctor can add on the 15% excess charge to. ($3,800 x 15% = $4,370) Since in this scenario, the Medicare-approved amount is 95% since your doctor does not accept Medicare assignment, Part B will cover 80% of the $3,800. Your Plan N will cover the remaining 20% of the $3,800. However, the difference between $4,370 and $3,800 is $570. If you have not met the Part B deductible, you’ll have to pay that in addition to the $20 copay if you have Plan N. ($570 + $198 + $20 = $788) What you would need to do is compare the annual premium for Plan G and Plan N side by side to determine if you’ll spend more out of pocket with Plan N premiums + excess charges then you would have with Plan G premiums with no additional excess charges. I hope this helps!
Hi Rosemarie! Your provider should not be asking you to pay the deductible, they should be billing everything through Medicare and allow Medicare to bill you for the deductible on their end. Always tell them to bill Medicare, otherwise, they may not have a record that you met the deductible for the calendar year.
ORIGINAL MEDICARE
I am currently on supplement plan G under part B. I am considering a change to plan N. If I have a carpal tunnel procedure and the doctor charges $12,000 and the Medicare assignment is for $4,000, could my doctor charge me An excess fee of 15% on the remaining unpaid $8,000? Thank you, Steve
Hi Steve! Doctors who do not accept assignment receive 95% of the Medicare-approved amount. Then they can add an excess charge of up to 15% of what Medicare will pay. So for your example, if the Medicare-approved amount is $4,000, and your doctors do not accept Medicare assignment, then Medicare will only pay 95% of the Medicare-approved amount. ($4,000 x 95% = $3,800) That is the amount your doctor can add on the 15% excess charge to. ($3,800 x 15% = $4,370) Since in this scenario, the Medicare-approved amount is 95% since your doctor does not accept Medicare assignment, Part B will cover 80% of the $3,800. Your Plan N will cover the remaining 20% of the $3,800. However, the difference between $4,370 and $3,800 is $570. If you have not met the Part B deductible, you’ll have to pay that in addition to the $20 copay if you have Plan N. ($570 + $198 + $20 = $788) What you would need to do is compare the annual premium for Plan G and Plan N side by side to determine if you’ll spend more out of pocket with Plan N premiums + excess charges then you would have with Plan G premiums with no additional excess charges. I hope this helps!
I was going to go to a doctor (specialist) that accepted Medicare but they asked for more than the medicare deductible allows. What do I do?
Hi Rosemarie! Your provider should not be asking you to pay the deductible, they should be billing everything through Medicare and allow Medicare to bill you for the deductible on their end. Always tell them to bill Medicare, otherwise, they may not have a record that you met the deductible for the calendar year.