Medicare beneficiaries who visit certain health care providers may have to pay Part B excess charges. Learn how to avoid these charges and find some Medigap plans that cover Medicare excess charges.
What is a Medicare Part B excess charge?
An excess charge happens when you receive health care treatment from a provider who does not accept the Medicare-approved amount as full payment. In these cases, a provider can charge you up to 15% more than the Medicare-approved amount.
There are some ways you can avoid paying Part B excess charges, and you may be able to find a Medicare Supplement Insurance (Medigap) plan that can cover these charges.
What is Medicare assignment?
When a doctor, health care provider or a supplier of durable medical equipment (DME) accepts Medicare assignment, it means that the Medicare-approved amount as full payment.
The Medicare-approved amount is the amount of money that Medicare has determined it will reimburse a provider for a given service or item. The Medicare-approved amount may be lower than what the provider actually charges for the treatment.
Part B covers doctor’s appointments and other types of outpatient care along with durable medical equipment. Part B excess charges will only occur if you visit a provider or a DME supplier who doesn’t accept Medicare assignment.
Any health care provider who accepts Medicare as a form of insurance (but doesn’t accept assignment) and is offering a service or item covered under Part B reserves the right to make excess charges.
This can include:
Other medical test providers
Home health care companies
How common are Part B excess charges?
Most physicians, health care providers and medical suppliers accept Medicare assignment, so Part B excess charges are not that common.
In 2015, 93 percent of primary care physicians accepted Medicare assignment.1
An example of Medicare Part B excess charges
The following example illustrates how Part B excess charges can work.
You visit a non-participating doctor and receive treatment that carries a Medicare-approved amount of $300. If the doctor is does not accept Medicare assignment, they are allowed to charge up to 15 percent more than that amount.
If the provider charges you the full 15 percent Part B excess charge, your total bill for the service will be $345. This reflects the $300 Medicare-approved amount plus $45, which is 15% of $300.
If you’ve met your Part B deductible for the year, you will be responsible for a 20 percent coinsurance of the Medicare-approved amount plus the full excess charge.
That means your share of the bill will be $105 (your 20 percent coinsurance of $300 is $60, and you must also pay the $45 excess charge).
If you did not face any Part B excess charges and you had already met your Part B deductible for the year, your share of the same bill would be just $60.
How can you avoid Medicare Part B excess charges?
The easiest way to avoid facing Medicare Part B excess charges is to limit yourself to visiting providers and medical suppliers who accept Medicare assignment. As mentioned above, most providers and physicians accept Medicare assignment.
Be sure to ask your provider, device supplier or physician if they accept Medicare assignment before receiving any treatment or services.
There are also other ways you may be able to avoid paying Medicare Part B excess charges.
Some states do not allow Part B excess charges
There are eight states that have laws in 2020 prohibiting Medicare Part B excess charges.
These states are:
Some Medicare Supplement Insurance (Medigap) plans cover Part B excess charges
Such a benefit allows you to freely visit Medicare providers without worry if they are participating or non-participating providers. Any excess charges they file will be picked up by your Medigap plan.
You can use the chart below to compare the types of standardized Medigap plans and the benefits they offer.
* Plan F and Plan C are not available to Medicare beneficiaries who became eligible for Medicare on or after January 1, 2020. If you became eligible for Medicare before 2020,... you may still be able to enroll in Plan F or Plan C as long as they are available in your area.
1 Plans F and G offer high-deductible plans that each have an annual deductible of $2,370 in 2021. Once the annual deductible is met, the plan pays 100% of covered services for the rest of the year. The high-deductible Plan F is not available to new beneficiaries who became eligible for Medicare on or after January 1, 2020.
2 Plan K has an out-of-pocket yearly limit of $6,220 in 2021. After you pay the out-of-pocket yearly limit and yearly Part B deductible, it pays 100% of covered services for the rest of the calendar year.
3 Plan L has an out-of-pocket yearly limit of $3,110 in 2021. After you pay the out-of-pocket yearly limit and yearly Part B deductible, it pays 100% of covered services for the rest of the calendar year.
4 Plan N pays 100% of the Part B coinsurance, except for a copayment of up to $20 for some office visits and up to $50 copayment for emergency room visits that don’t result in an inpatient admission.+ Read more
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Medicare Advantage plans (Medicare Part C) do not cover Part B excess charges.
A Medicare Advantage plan, however, does include an annual out-of-pocket spending limit for covered Part A and Part B services. This could help protect you from paying Part B excess charges past a certain amount, if you face them and if they go beyond your plan’s annual out-of-pocket spending limit.
Medicare Advantage plans provide all of the same benefits provided by Original Medicare, and many Medicare Advantage plans include some additional benefits that Original Medicare doesn’t cover.
These additional benefits may include things like:
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