What are Medicare Part B Excess Charges?

Medicare Part B Excess Charges are costs that 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 the Medicare assignment. In fact, in a 2020 brief by the Kaiser Family Foundation, it is stated that 99% of non-pediatric physicians accept Medicare. In spite of this, it’s still important to check with your providers beforehand to make sure they do.

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.

If your doctor or durable medical equipment provider does not accept the 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 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.

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:  

-Vermont

-Connecticut

-Rhode Island

-Massachusetts

-Pennsylvania

-Minnesota

-Ohio

-New York

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. 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?

Yes, but Medigap only covers anyone who has one of the following Medicare Supplement plans:

  • 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
  1. 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. Newly eligible Medicare beneficiaries can enroll in Part G once they are enrolled in Original Medicare Parts A and B. You will have to pay monthly premiums for Plan G in addition to your Part B premiums.

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. Instead, it would help if you asked whether they accept the assignment before you schedule an appointment. Check with your doctor in advance to avoid Medicare Part B excess charges. 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.

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.

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Mark Prip

Since 2003, Mark Prip has been leading  Policy Guide, Inc., providing knowledgeable information about Medicare, life insurance, and dental coverage to clients in over forty states. With his unparalleled hands-on experience aiding countless Medicare beneficiaries in selecting an appropriate health plan - it's clear that he is a prime example amongst other competitors for expertise and assistance. Mark has held is Florida Health & Life Insurance License (E051889) since 2003. View his license profile on the Florida Department of insurance website.