If you are already Medicare-eligible, or will be soon, you are probably facing a confusing list of options. There is Original Medicare, Medicare supplement plans, and Medicare Advantage plans. Original Medicare coverage that includes Part A for hospital services and Part B for more general medical care falls under a fee-for-service arrangement. This is the coverage commonly seen in the commercial health insurance products you have likely used in the past.
With original Medicare you are free to use your Part B coverage to see any doctor that accepts Medicare. Your provider will bill Medicare using a pre-approved list of procedures and amounts, or a fee schedule, from the Centers for Medicare & Medicaid Services (CMS). While this seems straightforward, there is a hidden element that beneficiaries opting for the original Medicare need to be aware of. These are the Medicare Part B excess charges.
What Are Medicare Part B Excess Charges?
As you read above, providers bill Medicare Part B using a fee schedule from CMS. The fee schedule lists every medical procedure, test, treatment, etc. that Part B will cover and how much Medicare will reimburse or pay on the bill. As the patient, under Medicare guidelines you are usually responsible for 20% of the billed amount plus your Part B deductible.
Most providers accept the CMS fee schedule as is, but, if your doctor feels Medicare does not pay them enough, they have the option to up charge. These additional costs are known as Medicare excess charges.
What Does It Mean When Doctors Accept Medicare Assignment?
If a doctor accepts Medicare assignment, this means they agree to the CMS and Medicare Part B fee schedule. Providers who agree to the assignment fee schedule from CMS will not charge you an excess charge. They will send a claim straight to Medicare for your treatment or visit, and will not ask for anything from you beyond your normal 20% and/or Part B deductible.
Are Part B Excess Charges Common?
For Medicare beneficiaries, most providers do not bill for excess charges. In fact, 95% of providers across the United States accept Medicare assignment and do not bill excess charges. You are most likely to encounter Medicare excess charges when seeing a specialist versus a family doctor or primary care physician.
There are 8 states that have banned excess charges all together. If you live in:
- Connecticut
- Massachusetts
- Minnesota
- New York
- Ohio
- Pennsylvania
- Rhode Island
- Vermont
it is illegal for any provider who accepts Medicare to bill Medicare Part B excess charges.
The Maximum You Can Be Charged
If your provider forgoes the assignment fee schedule and opts to bill for Medicare Part B excess charges, they are not allowed to bill over 15% over the normal Medicare reimbursement rate. This means whatever the rate is from the CMS fee schedule, your doctor can add the excess charge of 15% to that amount. If, under Medicare assignment, your bill would have been $600, the doctor can bill an excess charge of up to $90, which equals 15% of $600.
Who Pays Medicare Excess Charges?
As a beneficiary of original Medicare Part B, you are responsible for the entire excess charge, besides any copay or deductible you would normally pay under your Medicare coverage. Using the example above, with a $600 bill you would pay the entire excess charge of $90, plus the 20% you are expected to pay towards a Medicare-covered bill, and your Medicare deductible. Over time, excess charges have the potential to significantly increase your healthcare spending.
How To Protect Yourself Against Excess Charges
The first step you can take to avoid Medicare excess charges is to ask your provider if they take Medicare assignment. Be sure you don’t simply ask if they take Medicare. Your doctor can take Medicare, but charge the excess charges, so make sure you are certain they accept the CMS assignment rates.
Another option available to you is to purchase a Medicare supplement plan, otherwise known as Medigap coverage. If you plan on seeing providers who bill excess charges, this may be a more cost-effective option. There are a variety of Medigap plans but only two cover excess charges: Part F and Part G plans.
These supplemental plans are a great way to bridge the cost between original Medicare covers and what you the beneficiary pay, including any Medicare Part B excess charges. Get yourself covered today with FirstQuote Medicare, and avoid any excess charges that my come your way.
