Medicare Excess Charges – How to Avoid Them

By: Jonathan Tate

Healthcare providers (such as your doctor) have options when it comes to accepting Medicare’s payment for services.  They may:

  1. Not accept Medicare;
  2. Accept Medicare payment in full (called “Accepting Medicare Assignment”);
  3. Accept Medicare payment in part (called “Not Accepting Medicare Assignment”)

It is rare that a provider will not accept Medicare at all.  The vast majority fall into either #2 or #3. What is the difference?

When a provider accepts Medicare Assignment (#2), they accept Medicare’s payment in full.  If you have a Medicare Supplement or Medicare Advantage Plan, you can know what you will pay.  You will be billed your portion according to your plan’s benefits. If you do not have a plan, you will be billed the 20% that Medicare does not pay.  Historically, more than 95% of claims have followed this model.

But if a provider chooses to not accept Medicare Assignment (#3), you may be billed an additional 15%.  These providers may do all of the following:

  1. Bill Medicare for the 80%,
  2. Bill you (or your Medicare Supplement) the remaining 20%,
  3. Bill you an additional 15%.  This 15% charge is called Part B Excess Charges.

On the surface, this practice is distasteful at best.  But to the providers’ credit, as Medicare reimbursement cuts continue to lower payments to their offices they may feel the need to increase revenue elsewhere.  They may view Excess Charges as necessary, and we at Venture Insurance expect this practice to grow more popular in the future.


How Do I Avoid These Charges?

Some states have adopted measures that prohibit Excess Charges (see the map above).  If you receive care in Connecticut, Massachusetts, Minnesota, New York, Ohio, Pennsylvania, Rhode Island, or Vermont then those providers are not permitted to bill for Excess Charges.  But if you receive care from any provider in other states, then you need to prepare for them.

One way to prepare is by choosing a Medicare Advantage plan and using providers within your plan’s network.  Medicare Advantage plans use networks of providers who are contractually bound to honor the payment schedule set by your plan.

A second way is to choose a Medicare Supplement plan that covers those Excess Charges if/when they occur.  Currently, only Plans F and G cover Excess Charges.

Finally, if you have a Medicare Supplement plan that does not cover Excess Charges (or if you have no plan at all), you may ask your provider if they accept Medicare Assignment and also check here to do an online search.

There are different rules in different states.  And those rules follow you regardless of where you live or where you bought your Medicare plan.  It can be important to work with an agency that understands different states and has a national view, which is one reason Venture Insurance Group now writes across the Midwest in Michigan, Ohio, Kentucky, West Virginia, and now Missouri.  Contact us for local knowledge with nationwide understanding. We’re obsessed with insurance so you do have to be!

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