Medicare Part B Excess Charges are an amount up to 15% that a doctor or provider can charge over and above the amount that Medicare approves for services.
These charges come into play with Original Medicare Part B.
Original Medicare Part B covers outpatient medical services such as doctor visits, lab work, tests, surgeries, durable medical equipment, ambulance services, and preventive services.
If you have a Medicare Supplement plan then you also have Original Medicare Part A and Part B.
Participating Provider vs Non – Participating Provider
With Medicare, there are providers that are “Participating” and “Non – Participating”. They both agree to accept payments from Medicare for the services they provide to patients.
Doctors and providers that are participating, accept Medicare and also Medicare Assignment.
If a doctor or provider is “non – participating”, this means that they do accept Medicare payments, but not as payment in full. If they choose to, they can however, accept Assignment on a case by case basis.
For non participating providers that don’t accept Assignment, Medicare placed a Limiting Charge of 15% for any Excess Charges over and above what Medicare approves. Non Participating provider payments are also reduced by 5% from what’s on the Medicare Fee Schedule.
So the patient will be responsible to pay the Provider’s remaining charges up to 15% more, unless they have a Medicare Supplement plan that covers Excess Charges.
What Is Medicare Assignment?
The term Assignment means that a provider agrees to accept Medicare’s payment as payment in full.
If the provider accepts Assignment then they cannot balance bill the patient for any extra charges.
Medicare uses their approved Physician Fee Schedule which includes the maximum allowable amounts that providers who accept Assignment will be paid for services.
Providers That Opt-Out Of Medicare
Providers can also “opt – out” of Medicare. This means that they won’t be reimbursed by Medicare at all.
The provider will have to get their full payment from the patient.
Doctors that opt out of Medicare are required to notify the patient of costs before treating them. The patient is responsible to pay the full amount of the bill.
How Common Are Medicare Excess Charges?
Before the 1990’s, Medicare paid Doctors and providers differently than they do today. At that time, not many Doctors accepted Medicare Assignment. Excess Charges were common, so most people wanted to have a plan that covered those extra charges.
Back then most people that had a Medicare Supplement plan chose Plan F. Medicare pays 80% and the Plan F picks up the remaining 20% that Medicare doesn’t cover, including any Excess Charge billing.
Excess charges are something we don’t see happen very often. Most doctors today accept Medicare and Medicare Assignment.
Here’s an example of how Part B Excess Charges work:
- Jane visits the Doctor and the office visit charge is $115.
- Medicare’s allowable charge is $100 and Medicare pays 80% or $80
- Jane pays $20 plus 15 in Excess Charges and this equals $35.
- If Jane has a Medicare Supplement plan that covers Excess Charges, then she would have nothing out of pocket. (If the Part B deductible is met already for the year).
The Medicare Supplement will pick up the 20% that Medicare doesn’t cover. Some plans cover the Excess Charges as well.
Medicare Supplement Plans That Cover Excess Charges
Medicare Supplement Plan F and Plan G cover Part B Excess Charges 100%.
The Medicare Supplement Plan N is becoming very popular among our clients even though Excess Charges aren’t covered in most states.
It still makes a lot of sense for some people to get this plan. The monthly premiums are much lower than Plan F and Plan G.
With most doctors and providers today accepting Medicare assignment, this makes Excess Charges less of a concern.
States That Do Not Allow Excess Charges
The following states, by law, prohibit Excess Charge billing:
- New York
- Rhode Island
This law is called the Medicare Overcharge Measure or MOM law. So if you live or travel to any of these states you won’t have excess charge billing in these states.
One way to avoid Excess Charges is to make sure your doctors are fully participating in Medicare before seeing them. You can find out if a Doctor participates in Medicare by going to the Physician Finder tool on Medicare’s website.
If you have questions on any of the plans, then give us a Call at (800) 783-5901 or Email us at Info@usamedicareplan.com , our service is 100% FREE and we’re happy to help you.