- Doctors who do not accept Medicare assignment may charge you up to 15 percent more than what Medicare is willing to pay. This amount is known as a Medicare Part B excess charge.
- You are responsible for Medicare Part B excess charges in addition to the 20 percent of the Medicare-approved amount you already pay for a service.
- Part B excess charges do not count toward your annual Part B deductible.
- Medigap Plan F and Medigap Plan G both cover Medicare Part B excess charges.
To understand Part B excess charges, you must first understand Medicare assignment. Medicare assignment is the cost that Medicare has approved for a particular medical service. Medicare-approved providers accept Medicare assignment.
Those who don’t accept Medicare assignment may charge more than the Medicare-approved amount for medical services. Costs above the Medicare-approved amount are known as Part B excess charges.
Part B excess charges can wind up costing you significantly, but there are ways you can avoid them.
Not every healthcare professional accepts Medicare assignment. Doctors who accept assignment have agreed to accept the Medicare-approved amount as their full payment.
A doctor who doesn’t accept assignment may charge you up to 15 percent more than the Medicare-approved amount. This overage is known as a Part B excess charge.
When you see a healthcare professional or equipment supplier who accepts assignment, you can be sure that you’ll only be charged the Medicare-approved amount. These Medicare-approved doctors send the bill for their services to Medicare, rather than handing it to you. Medicare pays 80 percent, then you receive a bill for the remaining 20 percent.
Those who are not Medicare-approved can ask you for full payment up front. You will be responsible for getting reimbursed by Medicare for 80 percent of the Medicare-approved amount of your bill.
Here are some examples of how this works:
- Your doctor accepts assignment. Your general practitioner who accepts Medicare might charge $300 for an in-office test. Your doctor would send that bill directly to Medicare, rather than asking you to pay the entire amount. Medicare would pay 80 percent of the bill ($240). Your doctor would then send you a bill for 20 percent ($60). So, your total out-of-pocket cost would be $60.
- Your doctor doesn’t accept assignment. If you instead go to a doctor who doesn’t accept Medicare assignment, they might charge you $345 for the same in-office test. The extra $45 is 15 percent over what your regular doctor would charge; this amount is the Part B excess charge. Instead of sending the bill directly to Medicare, the doctor would ask you to pay the entire amount up front. It would then be up to you to file a claim with Medicare for reimbursement. That reimbursement would be equal to only 80 percent of the Medicare-approved amount ($240). In this case, your total out-of-pocket cost would be $105.
Part B excess charges do not count toward your Part B deductible.
Certain states have passed laws that make it illegal for healthcare professionals to charge Medicare Part B excess charges. These states are:
- New York
- Rhode Island
If you live in any of these eight states, you don’t have to worry about Part B excess charges when you see a doctor in your state. You can still be charged Part B excess charges if you receive medical care from a provider outside your state who doesn’t accept assignment.
Don’t assume that a doctor, supplier, or provider accepts Medicare. Instead, always ask whether they accept assignment before you book an appointment or service.
It’s a good idea to double-check that they accept Medicare and ask how much the service will cost, even with doctors you have seen before.
Medigap is supplemental insurance that you might be interested in buying if you have original Medicare. Medigap policies help pay for the gaps left in original Medicare. These costs include deductibles, copayments, and coinsurance.
The two Medigap plans that cover Part B excess charges are:
- Medigap Plan F. Plan F is no longer available to most new Medicare beneficiaries. If you became eligible for Medicare before January 1, 2020, you may still purchase Plan F. If you currently have Plan F, you are able to keep it.
- Medigap Plan G. Plan G is a very inclusive plan that covers many of the things original Medicare doesn’t. Like all Medigap plans, it costs a monthly premium in addition to your Part B premium.
Medicare Part B is the part of Medicare that covers outpatient services, such as doctor visits and preventive care. Medicare Part A and Medicare Part B are the two parts that make up original Medicare.
Some of the services Part B covers include:
- flu vaccine
- cancer and diabetes screenings
- emergency room services
- mental health care
- ambulance services
- laboratory testing
- If your doctor, supplier, or provider doesn’t accept Medicare assignment, they may be able to charge you up to more than the Medicare-approved amount of your medical service. This overage is referred to as a Part B excess charge.
- You can avoid having to pay Part B excess charges by seeing only Medicare-approved providers.
- Medigap Plan F and Medigap Plan G both cover Part B excess charges. But you may still have to pay your medical provider up front and wait for reimbursement.