Some healthcare providers don’t accept Medicare as full payment for their services. They may bill you for an “excess charge” over and above the amount that Medicare will pay. You can keep your health care costs down by understanding and avoiding excess charges.
What are Medicare Part B Excess Charges?
Excess charges are a part of Medicare Part B’s medical coverage. Medicare has list of approved rates that it considers to be reasonable for medical procedures, including doctor visits and tests. Some healthcare providers agree to be paid these rates, and they bill Medicare directly. This is known as accepting “Medicare assignment.”
For example, if Medicare’s approved reimbursement rate for a test is $1000 and your healthcare provider accepts Medicare assignment, the total fee will never be more than $1000. Of that, you will be responsible for paying a 20 percent co-pay, or $200, plus any deductible you have not yet met.
Other healthcare providers take Medicare, but they don’t think Medicare pays them enough. Medicare rules allow these providers to charge up to 15 percent more than the Medicare reimbursement amount. These extra fees are known as “excess charges.”
If Medicare will pay $1000 for your test, a provider who doesn’t accept Medicare assignment can charge you an additional 15 percent fee – or $150 – in excess charges over and above the $1000 Medicare rate. This means your test could cost you $150 more than if you had gotten the test from a provider who accepts Medicare assignment.
If you have Original Medicare, you are responsible for paying excess charges. In addition, some providers may require you to pay up front and then file a claim to get reimbursement from Medicare. There are several strategies you can use to avoid excess charges.
How Common are Medicare Excess Charges?
It’s pretty uncommon to have a doctor that charges Medicare Part B excess charges. The national average percentage of doctors in the U.S. that charge these excess charges is only around 5%. Mostly you’ll find these charges at a specialist.
If you go to healthcare providers that accept Medicare assignment, you will not have to deal with excess charges. When you make appointments, ask whether your provider accepts Medicare assignment. Don’t just ask if your doctor “takes Medicare.” A doctor may take Medicare and not accept assignment, leaving the door open for excess charges.
Medicare Overcharge Measure (MOM Legislation)
In addition, in eight states, providers CANNOT charge you excess charges because of the Medicare Overcharge Measure (or MOM law). If you live in Connecticut, Massachusetts, Minnesota, New York, Ohio, Pennsylvania, Rhode Island or Vermont, you do not have to worry about any excess charges from any provider who accepts Medicare.
What is the Best Way to Avoid Excess Charges?
It’s not always practical to choose doctors who take Medicare assignment. You may want to stay with a doctor who has been treating you and your family for years. You may need to see a certain highly recommended specialist. Or you may not have much choice in the matter. Many excess charges come from providers you don’t see and don’t think much about, such as anesthesiologists.
You can see the doctors you want without having to worry about excess charges by getting a Medicare Supplement, or Medigap, plan that covers excess charges. Currently, there are only two plans with this feature: Plan F and Plan G. Either of these plans will pay the full amount of any excess charges from any healthcare provider that accepts Medicare.
Medigap is an important way to protect yourself against unpredictable excess charges, co-pays and other costs of Medicare. At MedicareFAQ, we search top insurers to find you the best coverage for your situation, at the best price. Click or call to compare plans that cover Medicare Part B excess charges today. You can also complete our online rate form to see rates in your area.