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Posted 07/30/2021 in Category 1

How Common are Part B excess charges

How Common are Part B excess charges

Before discussing how common excess Part B charges are, we need to know what an excess charge is.

What is a Part B excess charge?

"Excess Charges" is a term that applies to original Medicare, or original Medicare with a Supplement Insurance Plan (Medigap). 

Excess charges do NOT apply to Medicare Advantage Plans.

These are charges that doctors add to the Medicare-approved amount when they don't accept "Medicare Assignment".  

What is Medicare Assignment?

Medicare assignment is an agreement that a provider makes with Medicare.

When a provider accepts Medicare assignment it means that the provider won't bill you above the Medicare-allowable rate. A participating provider won't bill you above the Medicare-allowable rate if a provider accepts Medicare assignment.

If Medicare states the allowable rate for a certain heart procedure is $25,000 the provider must agree to abide by it and not charge more. In most states doctors, surgeons, specialists, and other healthcare professionals are allowed to bill 15% above Medicare's approved amount.

If your Medigap plan does not cover Excess charges, then you would need to pay out of pocket that 15% above the allowable rate.

Let's say Susie, a Medicare recipient, is visiting a state where charging Part B excess charges isn't against the law.

Susie steps into a hole and breaks her ankle while walking on an uneven sidewalk. She goes to the ER. The emergency room surgeon looks at her ankle to see if there is any damage, and it turns out there is ligament damage and it needs surgery.  

Susie's surgeon accepts Medicare but doesn't accept Medicare assignment.  In this example, the Medicare-approved rate is $8,500, but since the surgeon doesn't accept Medicare Assignment, he can charge an additional 15%, which is $8500 x .15 or $1,275.  If Susie's Medigap plan doesn't cover excess doctor charges, she will pay her regular deductable and co-insurance or co-pay amount plus the $1,275.

For example, if she had a Plan N (which does not cover excess charges), Plan N would cover (after the Part B deductible) the procedure, but not the excess charge.  So Susie would be on the hook for the $1,275.

Other reasons to choose providers who accept Medicare Assignment:

Providers who accept Medicare Assignment agree to only collect your Part B deductible at the time of service. Most providers will wait for Medicare to pay its share before they bill you. Nonparticipating providers can collect payment in full upfront.

Additionally, at no cost to you, the provider must submit your Medicare claim for you. It's possible that nonparticipating providers won't bill Medicare, so you have to file your own claim. (What a hassle).

It would be best if you asked that provider the assignment question. The billing department will know the answer, and it's an easy question to ask. They will know if they accept the Medicare-approved amount.

It is important to have a Medigap plan that covers Part B excess charges because if you have an emergency (like getting hit by a car), you won't be able to ask this question.

Although most doctors in the US currently accept Medicare Assignment at the time of this writing, COVID has taught that you never know what the future holds.  

How Common are Medicare Part B Excess Charges?

As I stated earlier, in most parts of the country, Part B Excess charges are rare. 

However, when you visit a specialist, you are more likely to see an excess charge than when seeing a primary care physician.  In urban areas with higher costs of living, these charges are more commonplace. 

Excess fees are capped at 15% on each service, but there is no annual maximum on excess fees.  You can be in for a big bill if you are unlucky enough to need multiple services or expensive services such as chemotherapy.

Although you may not have a lot of regular doctor visits now, you should still choose a Medigap plan based on your long-term plans. You have an initial 6-month open enrollment window, and after that, you would have to “qualify medically” to move to a different plan.  Medical underwriting means that if you have medical conditions, the insurance company can refuse to add you to their plan.  Medigap plans do not have to accept you into their plan except in certain circumstances.

What states prohibit Part B Excess Charges?

There are eight states where providers are prohibited from charging Part B excess fees. If you live in one of these eight states, you won't have to worry about excess charges unless you get services in a state that allows them.

Because many of us travel, we recommend that you include Part B excess charges in your plan even if you live in one of these states.

Those states that prohibit excess charges are Connecticut, Massachusetts, Minnesota, New York, Ohio, Pennsylvania, Rhode Island, and Vermont. 

How Can you Avoid or Protect Yourself from Part B Excess Charges?

There are several ways to avoid Part B Excess Charges.

First, you can live in a state that doesn't allow excess charges and ensure that all of your services are provided inside that state.

You can also check with your providers (i.e. your doctors) to make sure they accept Medicare Assignment.  If they accept Medicare Assignment, then they cannot charge excess fees.  Also, you can find a doctor who will accept Medicare assignment using the physician finder tool.

But it isn't just doctors you'll need to ask.  You'll need to ask any Part B provider you want to use because they might not accept Medicare Assignment.  Part B providers include physicians, Nurse Practitioners, Home Health Care Agencies, Lab facilities, Occupational and Physical therapists, etc.  

But the easiest way to avoid Excess charges is to get a Medigap plan that covers the excess charge.

Plans F, G, and the high deductible versions of these plans cover Part B excess charges. 

If you currently have a plan that doesn't cover excess charges, or if you're currently paying Part B excess charges now, we can help! 

Find an insurance agent who can help you with Medicare right now!