If you are shopping for Medigap plans, you may have realized that a couple of them (Plan G and Plan F) cover something called “Part B Excess Charges.” So, what does “Medicare Part B Excess Charges” actually mean.
Medicare’s Excess Charges relates to Medicare Part B, which covers medical and doctors’ services. Some doctors who accept Medicare patients accept the “assigned” Medicare rate for their work. Others charge a higher rate, but they cannot charge more than 15 percent above the assigned rate and still be reimbursed by Medicare.
To illustrate, Medicare might determine that the fair and reasonable “assigned” rate for a certain procedure should be $500. A doctor who accepts the Medicare assignment would bill at or below that rate.
However, your medical provider may decide that $500 is not a sufficient reimbursement. Providers are allowed to charge up to an additional 15% over and above what Medicare has approved. Therefore, in this case, your provider could charge you $575 and you would be responsible for paying the additional $75 “excess” charge out-of-pocket ($500 X 15% = $75 excess charge) in addition to any applicable deductible and co-pay.
Depending on the doctors you choose and the number of visits and procedures that your use on a yearly basis, your Medicare Part B excess charges could add up to a substantial sum.
How to Protect Yourself from Medicare Excess Charges
There are several ways to avoid being exposed to Part B excess charges:
- Choose only doctors who bill the assigned Medicare rate. There is a database maintained at Medicare.gov that attempts to keep track of all doctors who accept Medicare and tells if they accept the assigned rate. It’s wise, however, to also just ask your doctor’s office if they accept the Medicare assignment or if they charge excess charges.
- Buy a Medicare Supplement policy that pays for excess Part B charges. Medicare Supplement Plan F and Plan G both provide coverage for excess charges.
Some States Prohibit Excess Charges
If you live in Connecticut, Massachusetts, Minnesota, New York, Ohio, Pennsylvania, Rhode Island or Vermont, your doctors who participate in Medicare are prohibited by law from charging more than the assigned medicare rate.