When you are comparing Medicare coverage, you may come across the term Part B excess charges. It sounds complicated, but it refers to an extra amount that some doctors may be allowed to charge above Medicare’s approved amount.
For many people, excess charges are not a frequent expense. Still, understanding them can help you choose doctors and compare Medicare Supplement plans with more confidence.
What is a Medicare Part B excess charge?
Medicare Part B helps cover outpatient medical care, including doctor visits, specialist visits, lab work, durable medical equipment, and many preventive services.
Medicare sets an approved amount for each covered service. A doctor who does not accept Medicare assignment may be allowed to charge more than that approved amount. The additional amount is called an excess charge.
In most cases, the excess charge may be up to 15% above Medicare’s approved amount. It is important to know that this is separate from your Part B deductible and your usual share of Medicare costs.
For example, after you meet your Part B deductible, Original Medicare generally pays 80% of the Medicare-approved amount for covered services. You are generally responsible for the remaining 20%. If your provider can bill an excess charge, you may also be responsible for that extra amount.
What does it mean when a doctor accepts Medicare assignment?
One of the easiest ways to reduce the chance of excess charges is to see providers who accept Medicare assignment.
A provider who accepts assignment agrees to accept the Medicare-approved amount as full payment for covered services. You may still owe your deductible, copayment, or coinsurance, but the provider generally cannot add a Part B excess charge.
Providers can work with Medicare in different ways:
- Participating providers accept Medicare assignment for all Medicare-covered services.
- Non-participating providers accept Medicare, but may decide whether to accept assignment for each service.
- Opt-out providers generally do not bill Medicare at all. Medicare usually will not pay for services from these providers, except in limited situations such as emergency care.
Before making an appointment, you can ask the office, “Do you accept Medicare assignment?” This simple question may help you avoid surprise bills.
How much can Part B excess charges add up to?
The amount depends on the services you receive, the Medicare-approved amount, and whether your provider bills an excess charge. A single charge may not seem large, but repeated visits or higher-cost outpatient services can make the added expense more noticeable.
Not every doctor who does not participate in Medicare bills excess charges. Some may accept assignment for certain services or patients. Because provider billing practices can change, it is wise to ask before receiving non-emergency care whenever possible.
Do all states allow Medicare excess charges?
No. Some states have rules that limit or prohibit Medicare Part B excess charges. These rules may change, so it is helpful to check current information for your state and confirm billing practices with your provider.
Even in a state where excess charges are allowed, many Medicare beneficiaries may never receive one because they use doctors who accept assignment. However, people who see specialists often, travel for care, or want the broadest choice of providers may want to consider this issue carefully.
Which Medicare Supplement plans cover excess charges?
Medicare Supplement insurance, also called Medigap, works alongside Original Medicare. These plans may help pay certain out-of-pocket costs left by Parts A and B.
For people newly eligible for Medicare, Medigap Plan G generally covers Medicare Part B excess charges after Medicare approves the service. Plan F also covers excess charges, but it is generally available only to people who were eligible for Medicare before January 1, 2020.
Medigap Plan N does not cover Part B excess charges. Plan N may have a lower premium than Plan G in some areas, but it can involve copayments for certain office and emergency room visits, along with possible excess-charge exposure.
Medigap benefits are standardized in most states, meaning a Plan G from one carrier generally has the same basic medical benefits as a Plan G from another carrier. Premiums, customer service, underwriting rules, and plan availability may vary by carrier and state.
What about Medicare Advantage plans?
Medicare Advantage plans handle provider payments differently than Original Medicare with a Medicare Supplement. These plans generally have their own provider networks, plan rules, copayments, and out-of-pocket maximums.
Part B excess charges are mainly an Original Medicare concern. If you are considering Medicare Advantage, it is still important to review the plan’s network, referral rules if any, costs for services, prescription drug coverage, and whether your doctors participate.
How can you avoid unexpected doctor bills?
There are several practical steps you can take:
- Ask whether the provider accepts Medicare assignment before your visit.
- Use Medicare’s provider search tools to help find clinicians who accept Medicare.
- Review your Medicare Summary Notice to make sure claims were processed as expected.
- Ask for an estimate before scheduled outpatient services when possible.
- Consider whether a Medicare Supplement plan that covers excess charges fits your comfort level and budget.
Part B excess charges may not be the biggest Medicare expense for everyone, but they are worth understanding before choosing coverage. If you would like help comparing Medigap options, including Plan G and Plan N, reach out to Eric for free, no-pressure guidance based on your needs and your state.