What Are Medicare Part B Excess Charges?
Medicare Part B excess charges are costs you may have to pay if you receive health care services from a doctor or other provider who does not accept Medicare assignment. Medicare assignment is an agreement between your doctor or other healthcare provider and Medicare that establishes the amount of money that will be paid for a service.
If your doctor or other healthcare provider does not accept assignment, they can charge up to 15% more than Medicare’s approved amount for the service (the “excess charge”). This means that if Medicare approves a payment of $100 for a service and the doctor does not accept assignment, you could be charged up to $115 for that service.
In addition, you are responsible for paying any applicable coinsurance and deductible amounts.
How Common Are Medicare Part B Excess Charges?
Fortunately, most doctors accept Medicare assignment. A 2020 brief by the Kaiser Family Foundation stated that 99% of non-pediatric physicians accept Medicare. In spite of this, it’s still important to check with your providers beforehand to ensure they do.
If your doctor or durable medical equipment provider accepts Medicare assignment:
You will only be charged the amount approved by Medicare for your services or medical equipment. Providers who accept assignment send their bills directly to Medicare rather than you. Medicare will then pay 80% of your provider’s services, and you will be billed for the remainder.
If your doctor or durable medical equipment provider does not accept Medicare assignment:
You will be asked to pay the total amount for their services upfront. You will then have to seek reimbursement from Medicare for 80% of the bill approved by Medicare for services.
For example, suppose your doctor’s office accepts Medicare assignment, and you receive an in-office procedure for which the amount Medicare approves is $400. In that case, the doctor’s office will bill Medicare directly. Medicare will then pay your doctor 80% or $320. You will then receive a bill for the remaining 20% of $80, your total out-of-pocket cost.
It is important to note that any Part B excess charges you might pay will not count toward your Part B deductible for the calendar year.
Which States Do Not Allow Medicare Part B Excess Charges?
Medicare Part B excess charges are illegal in the following eight states:
- Connecticut
- Massachusetts
- Minnesota
- New York
- Ohio
- Pennsylvania
- Rhode Island
- Vermont
These eight states have passed laws that prevent healthcare providers from enacting Part B excess charges, so if you live in one of them, you shouldn’t have to worry about paying excess for medical services.
If you live in one of the other 42 states, you will need to take steps to avoid them. Remember that even if you live in one of the eight states that don’t allow excess charges, you can still be charged for them if you see a provider in a different state that doesn’t accept Medicare assignment.
Does Medigap Cover Part B Excess Charges?
Yes, but only those with one of the below Medicare Supplement plans:
- Plan F – Most new Medicare beneficiaries cannot purchase Medigap Plan F because it is no longer available. However, you can purchase this plan if you were first eligible for Medicare before Jan. 1, 2020. You can also keep Plan F if it is your current plan.
- Plan G – Besides Plan F, Medigap Plan G is the most comprehensive Medigap plan available to Medicare beneficiaries.
Plan G covers gaps in coverage that Original Medicare doesn’t. Newly eligible Medicare beneficiaries can enroll in Plan G once enrolled in Original Medicare Part A and Part B. You must pay monthly premiums for Plan G in addition to your Part B premium.
Beneficiaries with one of these plans do not have to worry about Part B excess charges.
Ways to Avoid Part B Excess Charges
Although Part B excess charges aren’t widespread, they can lead to unexpected out-of-pocket costs if you’re unprepared. Here are the most effective ways to avoid them:
See doctors who accept Medicare assignment. The simplest and most reliable way to avoid excess charges is to choose healthcare providers who accept Medicare assignment. These providers agree to accept the Medicare-approved amount as full payment and won’t bill you anything extra beyond the standard deductible and coinsurance. You can verify this by asking the provider directly or using the Medicare.gov physician search tool. Most providers do accept assignments, but always double-check, especially with specialists.
Enroll in a Medigap plan that covers excess charges. A Medicare Supplement Insurance plan (Medigap) can offer financial protection if you’re on Original Medicare. Specifically, Plan G and Plan F (for those eligible before 2020) cover 100% of Part B excess charges. With these plans, even if you see a non-participating provider who charges more than Medicare allows, your Medigap coverage will pick up the difference. This is especially useful if you travel frequently or see out-of-network specialists.
Receive care in a state that prohibits excess charges. Some states have passed “MOM laws” (Medicare Overcharge Measures), which prohibit doctors from billing excess charges, even if they don’t accept assignment. You’re protected if you live in or receive care in one of these states: Connecticut, Massachusetts, Minnesota, New York, Ohio, Pennsylvania, Rhode Island, and Vermont. Remember that this protection generally applies only within the state, so it won’t help if you receive care elsewhere.
Consider a Medicare Advantage Plan (Part C). Medicare Advantage plans, offered by private insurers, typically use a network of contracted providers. When you receive care in-network, providers are not allowed to bill more than the plan’s approved amount — excess charges don’t apply in these cases. These plans often have lower premiums but have different rules, such as network restrictions and prior authorizations. If you’re comfortable managing those trade-offs, this can be an effective way to sidestep excess charges.
By understanding how Medicare billing works and making informed choices about your coverage and providers, you can avoid excess charges and keep your healthcare expenses more predictable.
Reimbursement for Excess Charges
Step 1: Review Your Medicare Summary Notice (MSN) or Explanation of Benefits (EOB). Begin by checking your MSN or EOB to identify the amount Medicare approved, what they paid, and what you were billed. If you see charges exceeding the Medicare-approved amount, it may be a Part B excess charge.
Step 2: Confirm the Provider’s Assignment Status. Call the provider’s office to ask whether they accept Medicare assignment. If they do, they aren’t allowed to charge excess fees. If they don’t, they can charge up to 15% more—but not beyond that. Any overcharge beyond this limit may be disputable.
Step 3: Check Your Medigap Coverage. If you have Medigap Plan G or Plan F, you’re fully covered for Part B excess charges. Contact your Medigap insurer to confirm the charge is eligible and ask about their reimbursement process.
Step 4: Collect Your Documentation. Gather your provider’s bill, your MSN or EOB, and proof of payment. These will be needed for your claim or appeal.
Step 5: Submit a Claim to Your Medigap Insurer. If your Medigap plan covers excess charges, file a claim with your documentation. Reimbursement typically follows within a few weeks.
Step 6: Appeal to Medicare if Needed. If you believe a provider charged you improperly or that Medicare miscalculated payment, you can file an appeal within 120 days of receiving your MSN. Include all relevant documentation and a written explanation.
Step 7: Follow Up. Keep track of all communications and paperwork. If reimbursement is delayed or denied, follow up with your insurer or Medicare. For extra help, contact your State Health Insurance Assistance Program (SHIP).
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Article Sources:
Does Your Provider Accept Medicare as Full Payment? | Help With Costs | Medigap Plans
