There are some situations where Medicare may not pay all of the costs under Medicare Part B coverage, and in some instances may leave enrollees paying the Medicare Part B excess charges.
A doctor may accept Medicare but may not accept Medicare Assignment. That doctor or other healthcare provider who does not accept Medicare Assignment can charge up to 15% more than the Medicare-approved amount.
Avoid paying the Medicare Part B excess charges by purchasing a Medicare Supplement Insurance Plan.
Medicare beneficiaries usually understand that they pay their annual deductible and then pay their coinsurance for each doctor visit or other medical services, diagnostic testing or lab work, and preventive services. They often believe that Medicare covers all costs after the beneficiary pays their deductible and coinsurance. However there are some situations where Medicare may not pay all of the costs under Part B coverage, and in some instances may leave enrollees paying the Medicare Part B excess charges. Medicare Part B excess charges can also be looked at as the preferred provider charging more than Medicare pays for their healthcare.
What are Medicare Part B Excess Charges in Detail?
Medicare beneficiaries likely want to know what Medicare Part B covers when they first become eligible for Medicare and then may assume that they never pay anything other than their deductible and coinsurance. Some Medicare beneficiaries may get quite a surprise when they receive a bill after going to a doctor’s appointment or for services provided after their doctor ordered tests, certain medical care or supplies.
- Medicare explains that Medicare Assignment is the amount in an “agreement by your doctor, provider, or supplier to be paid directly by Medicare,” where the doctor or other healthcare provider agrees to accept the payment amount that Medicare is willing to pay. The healthcare provider cannot bill you for any remaining charges if they accept Medicare Assignment.
- The provider sends the bill to Medicare. Medicare pays the customary 80% of the bill, and the Medicare beneficiary pays their 20% of the bill.
- Healthcare providers and suppliers who accept Medicare Assignment are often referred to as participating providers.
- If you have Original Medicare and the amount that a doctor or another healthcare provider “is legally permitted to charge is higher than the Medicare-approved amount, the difference is called the Medicare Part B Excess charge.”
It is important to note that a doctor may accept Medicare but may not accept Medicare Assignment. That doctor or other healthcare provider who does not accept Medicare Assignment can charge up to 15% more than the Medicare-approved amount.
How Common are Medicare Excess Charges?
Medicare Part B excess charges are not all that common. The KFF indicates that 96% of all physicians and practitioners who registered with Medicare are participating providers, meaning that they accept assignment.
Remember that you can be billed up to 15% above the amount of the Medicare Assignment costs if your provider accepts Medicare but does not accept Medicare Assignment.
It is important to make sure that your healthcare provider accepts Medicare. KFF also reports on the fact that non-participating providers can charge Medicare beneficiaries the full cost of their physician visit or service or supplies.
Medicare suggests that you make sure that your doctor, service provider, or medical supplier accepts Medicare assignment. If you are unsure, do not be afraid to ask.
How to Avoid Excessive Medicare Charges
You pay less for your healthcare if you avoid Medicare Part B excess charges. You also pay less if you make sure that your doctor, service provider or supplier accepts Medicare.
There are several states where it is illegal for healthcare providers to charge Medicare Part B Excess charges. If you reside in one of those states, you may not be charged the 15% excess charge unless you receive medical care in a state that allows providers to charge the excess charges. The states that prohibit healthcare providers from charging Part B excess charges include:
- New York
- Rhode Island
What Happens if I Live in a State That Allows Doctors and Practitioners to Charge Part B Excess Charges?
Avoid paying the charges by purchasing a Medicare Supplement Insurance Plan (Medigap). Medigap plans are sold by private insurance companies to fill “gaps” in Original Medicare coverage.
A Medicare beneficiary may be eligible for a Medicare Supplement Insurance plan if they have both Medicare Part A and Medicare Part B coverage. An insurance company cannot sell a Medicare Supplement Plan to those who have a Medicare Advantage Plan, or Medicare Part C.
Medicare urges Medicare recipients to compare Medigap policies carefully before selecting a plan. Following this advice is important for several reasons. Insurance companies do not have to offer all Medigap plans and choose the ones that they want to offer to Medicare beneficiaries. Compare the Medigap policies on the Medicare site to get the policy that is right for you, and that best helps you to avoid paying Part B Excess charges.
Remember that even doctors who accept Medicare can still charge you up to 15% over what Medicare pays if they choose not to accept Medicare Assignment. Do not forget that non-participating providers who do not sign the agreement to accept Medicare Assignment can charge you the full cost of services up-front, leaving you to submit the claim to Medicare and have the refund sent to you.