Medicare Part B excess charges aren’t all that common. In fact, only about 3% of all healthcare providers add them to your bill. But, as rare as they may be, it’s still important to understand what an excess charge is so you can be sure to avoid them.
Medicare excess charges are fees charged by a healthcare provider that are above the amount Medicare approves for payment. Medicare sets the amount it will pay for each medical service, and some providers may choose to charge more than that amount.
Medicare excess charges can occur when a provider does not accept assignment, which means they do not agree to accept the Medicare-approved amount as full payment for their services, even though they do accept Medicare patients. Beneficiaries who receive care from providers who charge excess fees may be responsible for paying the difference between the Medicare-approved amount and the provider's charge.
Excess charges only exist for services that fall under Medicare Part B, which is your outpatient medical insurance. Part B covers things like doctor’s visits, lab tests, surgeries, preventive care, and durable medical equipment.
If a provider wants to utilize excess charges, they’re allowed to add an extra 15% to the Medicare-approved amount. Let’s look at an example.
You saw a non-participating provider and received treatment that cost a Medicare-approved amount of $500. If that provider charged you the full 15% allotment for Part B excess charges, your total bill would be $575. If you have met your Part B annual deductible, your cost for Part B services is 20%. In the end, your portion of the bill is $175.
$500 x 20% + $75 = $175
According to Medicare law, providers who choose to charge Part B excess fees must inform Medicare beneficiaries in advance that they will be responsible for paying the difference between the Medicare-approved amount and the provider's charge. Medicare beneficiaries should understand that they may be responsible for paying a portion of the costs for their medical services and should familiarize themselves with the terms of their Medicare coverage and what services are covered.
Not everyone has to pay excess charges. You can avoid them by enrolling in a Medicare Supplement that covers them or by living in a state where they are not allowed.
Medicare Supplements act as a secondary insurance plan. You have several different Medicare Supplements to choose from, and the most popular choices are Plan F, Plan G, and Plan N. Plans F and G cover Part B excess charges, so you won’t be responsible for them if they happen.
In addition, there are currently eight states that prohibit the practice of adding excess charges. These eight states are referred to as MOM states. MOM stands for Medicare Overcharge Measures. These states include:
If you live outside of these states and are not enrolled in either Plan F or Plan G, you should be sure your provider accepts Medicare assignment before scheduling. You can use Medicare’s Find a Physician tool to look up the status of your doctors.
The list is updated regularly and is available to the public. Medicare beneficiaries can use the list to find out if a specific provider participates in the Medicare program and accepts assignment. Keep in mind that provider participation in Medicare may change over time, so it's a good idea to check the list before each appointment.
It's also worth noting that some providers who do accept Medicare assignment may still charge beneficiaries for services that Medicare does not cover. Beneficiaries should familiarize themselves with the terms of their coverage and understand what services are covered and what costs they may be responsible for paying.
To learn more about Part B excess charges and to make sure you're covered, call to speak with one of the experts and Local Medicare Specialists today!
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