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:
- New York
- Rhode Island
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 Medicare 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
It would be best never to assume that your doctor or other healthcare provider accepts Medicare. Before you schedule an appointment with your doctor’s office, ask whether they accept Medicare assignment. If they do not accept assignment, you won’t be charged any excess charges.
However, suppose your doctor’s office does accept Medicare but doesn’t accept Medicare assignment. In that case, they can bill for the excess charges unless they are in one of the previously listed states. Be sure to ask if they intend to add excess charges to your total billing amount.
Reimbursement for Excess Charges
Suppose your doctor accepts Medicare but doesn’t accept Medicare assignment. In that case, they can still bill Medicare for 80% of the Medicare-approved amount even though you’ll still have to pay the excess charges plus the remaining 20%. If your doctor has opted out of Medicare completely, however, Medicare won’t pay them for any portion of their services or reimburse you.
If Medicare has denied coverage, you can file a Medicare Patient’s Request for Payment form to seek coverage from your secondary insurance.
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