What are Medicare Part B Excess Charges?
Learn how Medicare Part B Excess Charges work, which Medigap plans cover, and ways to avoid these excess charges.
Medicare patients who have Medicare Part A, Medicare Part B, and Medicare Part D might expect to pay Medicare premiums but might not expect to have to pay additional charges. However, some healthcare providers, including doctors and suppliers of durable medical equipment, refuse to accept the Medicare assignment as the full payment for their services or equipment. As a result, these health care providers can charge as much as 15% more than the amount paid for by Medicare as Part B excess charges. Here is some information about avoiding these charges, including finding a Medicare Supplement that will cover them.
How Common Are Medicare Part B Excess Charges?
Some healthcare providers do not accept the Medicare assignment. However, providers who do accept the Medicare assignment accept it as full payment for their services. Doctors who do not accept the Medicare assignment as full payment can charge as much as 15% more than the approved amount. This additional amount is called a Part B excess charge.
If your doctor or durable medical equipment provider accepts the Medicare assignment, you will only be charged the amount approved by Medicare for your services or medical equipment. Providers who accept the 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.
A provider not approved by Medicare will ask you to pay the total amount for their services upfront. You will then have to seek reimbursement from Medicare for 80% of the amount of the bill approved by Medicare for services.
For example, suppose your doctor’s office accepts the Medicare assignment, and you receive an in-office procedure for which the amount approved by Medicare 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, which will be your total out-of-pocket cost.
If your medical provider doesn’t accept the Medicare assignment for the same procedure, they might charge 15% more for the same procedure or a total of $460. The additional $60 is the 15% overage above what a Medicare-approved doctor would charge and is the Part B excess charge. Instead of directly billing Medicare for the procedure, your doctor would ask you to pay the entire $460 upfront. You would then have to file a reimbursement claim with Medicare. However, your reimbursement would only be 80% of the Medicare-approved amount of $400, meaning your reimbursement would be $320. This would mean that your out-of-pocket cost for the procedure would be $140.
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. For example, out of the $140 out-of-pocket expenses in the previous example, only $80 would count toward your annual deductible.
Fortunately, most doctors accept the Medicare assignment, but it’s still important to check with your providers to make sure they do.
Which States Allow Medicare Part B Excess Charges?
Medicare Part B excess charges are not legal in every state, but they are legal in all but the following eight states:
- Rhode Island
- New York
These eight states have enacted laws that make it illegal for healthcare providers to charge Part B excess charges, so if you live in one of them, you shouldn’t have to worry about paying excess charges for medical services. However, if you live in one of the other 42 states, you will need to take steps to avoid them. Similarly, 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 the Medicare assignment.
Does Medigap Cover Medicare Part B Excess Charges?
The following two Medicare Supplement plans provide coverage for Part B excess charges:
• Plan F – Most new Medicare beneficiaries cannot purchase Plan F because it is no longer available. However, if you were first eligible for Medicare before Jan. 1, 2020, you can purchase it. 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. It covers many services that Original Medicare does not cover. You will have to pay monthly premiums for Plan G in addition to your Part B premiums.
Ways to Avoid Part B Excess Charges
It would be best never to assume that your doctor or other healthcare provider accepts Medicare. Instead, it would help if you asked whether they accept the assignment before you schedule an appointment.
Here are some ways to avoid Medicare Part B excess charges:
Check With Your Doctor in Advance
Before you schedule an appointment with your doctor’s office, ask whether they accept the Medicare assignment. If they do not accept the assignment, you won’t be charged any excess charges. However, suppose your doctor’s office does accept Medicare but doesn’t accept the Medicare assignment. In that case, they can bill for the excess charges unless they are in one of the previously listed states. In that case, ask if they intend to add excess charges to your total billing amount.
Eight States Prohibit Medicare Excess Charges
As previously noted, eight states make it illegal or provide some protection against Part B excess charges. So if you live in one of those states and see doctors there, you shouldn’t worry about Part B excess charges of 15%.
Medigap Plans F and G Pay Excess Charges
You can avoid paying Part B excess charges by enrolling in Medicare Supplement Plans G or F. However, suppose you are newly eligible for Medicare. In that case, you won’t be able to enroll in Plan F. Newly eligible Medicare beneficiaries can enroll in Part G once they are enrolled in Original Medicare Parts A and B.
Anyone who has Plan F or Plan G will not have to pay Medicare Part B excess charges. While there are 10 Medicare Supplement insurance plans available, these are the only two that cover Part B excess charges.
Reimbursement for Excess Charges
Suppose your doctor accepts Medicare but doesn’t accept the 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.
One of our licensed insurance agents can help you learn about your Medicare options and make intelligent decisions about choosing the coverage that meets your needs and reduces out-of-pocket costs for outpatient services. For example, selecting the right supplement plan might help to make your doctor visits more affordable while improving the accessibility of your Medicare coverage.