If you’re a senior citizen, then there’s a good chance you’ve heard of Medicare excess charges. What are they, and what do they mean for you? Understanding how they work is important for getting the most out of your health care dollars. 

Medicare excess charges are the amount a doctor may charge beyond what Medicare Part B has authorized as payment.  A non-participating provider is permitted to charge up to 15% beyond the Medicare fee, in addition to the service’s approved amount.

Did you know that as a senior citizen, there are certain healthcare costs that Medicare doesn’t cover? I’ll discuss Medicare Excess Charges and how to look up to see which providers charge an excess charge, which providers don’t, and which providers have opted out of accepting Medicare. Read on to learn more!

Medicare Explained: Excess Charges

There are some terms we need to know the definitions to. I get these right from the official Medicare and You Handbook. I know a lot of you take notes from my blogs and videos. How do I know this? Because when you call asking questions, you tell me that you’re referring to the notes you took while reading my blogs, and watching my videos, and everyone is so nice when they tell me the blogs and videos I’ve made really helped them understand Medicare. I can’t tell you how good that makes me feel.

Yes this is my job and I do this for money, but I know you have a job or had a job for the same reasons, but what keeps you coming back is when people let you know how much you helped them. We all have jobs and we have to do it for the money, but what makes you feel good, or at least what makes me feel good is I know I was able to help someone. Especially with Medicare because it certainly can be so damn confusing. These excess charges are no different. Let’s get into the definitions:

Excess Charge

• The first definition is an Excess Charge. I couldn’t find a definition in the handbook, but the definition is in the glossary of medicare.gov. It states “If you have Original Medicare, and the amount a doctor or other health care provider is legally permitted to charge is higher than the Medicare-approved amount, the difference is called an excess charge.” In the handbook, it’s actually referred to as a limiting charge and it is on page 53. The Medicare.gov glossary defines a limiting charge as in Original Medicare, the highest amount of money you can be charged for a covered service by doctors and other health care suppliers who don’t accept assignment.

What is the Limiting Charge Amount Medicare Fee Schedule?

The limiting charge is 15% over Medicare’s approved amount. The limiting charge only applies to certain services and doesn’t apply to supplies or equipment. I put this here because I wanted you to know that excess or limiting charges don’t apply to supplies or equipment. Now you need to know what assignment is, also referred to as Medicare-assignment, and you need to know what Medicare-approved amount is. Medicare-approved amount In Original Medicare is the amount a doctor or supplier that accepts an assignment can be paid. It may be less than the actual amount a doctor or supplier charges. Medicare pays part of this amount, and you’re responsible for the difference. 

• The next term, the assignment also called Medicare Asignment: is an agreement by your doctor, provider, or supplier to be paid directly by Medicare, to accept the payment amount Medicare approves for the service, and not to bill you for any more than the Medicare deductible and coinsurance. 

Are there Different Medicare Providers?

We now need to know the three different types of providers there are in the eyes of Medicare. There are participating providers. Later, I’m going to show how to use medicare’s websites to look up any provider that accepts Medicare and those that have opted out of Medicare (view video here). Next is a non-participating provider, and the third is a private contract provider. This is all from pages 53 and 54 of the 2020 handbook. 

• The first type of provider I want to get out of the way is the private contract provider. You can look at page 54 of the Medicare and You Handbook. Private contract providers are simple to understand. Private contract providers have opted out of accepting Medicare payments. On page 54 it states: What are private contracts? Certain doctors and other health care providers who don’t want to engage with the Medicare program may “opt-out” of Medicare. You can still see these providers, but they must enter into a private contract with you (unless you’re in need of emergency or urgently needed care).

Does Medicare pay services under A Private Contract? Find out!

Medicare won’t pay for any services you get under a private contract, so you’ll pay the provider’s entire charge out of your own pocket. You and your provider will set up your own payment terms through the private contract. This also means if you have a Medicare Supplement plan it will not pay either. There’s also a way to look up providers that have opted out. I wanted to get the private contract providers out of the way because they are the simplest. By the way, less than 1% of providers opt-out of accepting Medicare. 

What is a Non-Participating Provider of Medicare?

Next, I’ll talk about non-participating providers, and they’re by far the most difficult to understand, but if I have done my job you’ll easily understand this by the end of the blog. Now you would think from the term non-participating that this type of provider or physician doesn’t participate in Medicare, but they do participate in Medicare. They are non-participating when it comes to assignment or Medicare-assignment. This means that these providers accept Medicare, but they don’t accept Medicare-assignment or the Medicare-approved amount as payment in full.

Let’s look a little deeper. If a provider doesn’t accept Medicare assignment as full payment, then they can charge 95% of the Medicare-approved amount and also an additional 15% excess charge. Let’s break this down with some actual numbers and this will become clearer. For example, if the Medicare-approved amount for the Medicare-covered Part B claim is $500, then a provider that doesn’t accept assignment as full payment may charge 95% of the Medicare-approved amount. In this case, 95% of $500 is $475. Now Medicare Part B will cover 80% of the $475 charge and for this example, we are assuming the Medicare beneficiary has already satisfied their Part B deductible. 80% of $475 dollars is $380.

What does a Medicare Beneficiary Responsibility?

The Medicare beneficiary will be responsible for the other 20% and again we are assuming the Part B deductible has already been met in this case. The balance due for the Part B claim is $95 by the Medicare beneficiary. One of the reasons you are probably reading this blog is you are interested in purchasing a Medicare Supplement and are learning how Medicare and Medicare Supplements work. 7 of the 12 Medicare Supplement plans available to purchase will pay 100% of the Part B 20% coinsurance after the Part B deductible has been satisfied.

The plans that don’t pay 100% are plan K which will pay 50% of the Part B coinsurance, Plan L will pay 75% of the Part B coinsurance and Plan N will pay 100% of the Part B coinsurance, however with Plan N, if you have a certain type doctor office visit the Medicare beneficiary is subject to up to a $20 copayment and up to a $50 copayment for an emergency room visit when the ER visit did not result in an inpatient admission to the hospital. High deductible Plan F and G will also pay 100% of the Part B coinsurance but only after a deductible has been met. The deductible on those plans for 2020 happens to be $2,340. You can get quotes on all the plans in your area through my website, MedicareRateQuote.com.

Who Charges Excess Charges in Medicare?

The non-participating provider may charge the Medicare beneficiary an additional 15% of the 95% of the Medicare-approved amount. In this case, the extra 15% is calculated on the $475 not the $500. If the non-participating provider charges the excess charge, and just because they are a non-participating provider doesn’t mean they actually have to charge the excess charge. But in this case, the excess charge is $71.25. That’s 15% of $475. This $71.25 is the Medicare excess charge. There are technically four Medicare Supplement Plans that cover excess charges, and they are Plans F, G, and High Deductible F and G. However, the excess charge will not be paid on High deductible F and G until the deductible of $2,340 has been met.    

• Now I want to talk about Participating providers and this is pretty easy and you probably already have a good idea where this is going. I chose to put the hard part in the middle about non-participating providers so we could end this portion of the blog with something easy before I showed you how you can look up to see providers that are participating, non-participating, and those that have opted-out of Medicare. If you see a participating provider, they are not allowed to charge Medicare excess charges, because they have agreed to accept Medicare-assignment as payment in full.

Providers Accepting Medicare Assignment

About 96% of participating and non-participating providers accept Medicare-assignment. I don’t want to take up more time citing articles about this, so I’ve provided links in the description to various articles that outline the percentages of providers participating, non-participating, and opting out. Now let’s use another example and we’ll use the same $500 Part B provider claim. This participating provider is going to get the $500 for this service and that’s it. They are allowed to charge the full Medicare-approved amount because they agree to Medicare-assignment, unlike the non-participating provider that can charge 95% of the Medicare-approved amount because they elected not to accept Medicare-assignment as payment in full.  

Improved Medicare Beneficiary Example

Let’s break this down, 80% of the $500 will come from Medicare. That is $400. The last 20%, again we are assuming the Medicare beneficiary has already paid the Part B deductible. 20% of $500 is obviously $100. This $100 will come entirely from the Medicare beneficiary if they don’t have a Medicare Supplement or depending on which Medicare Supplement they have, the Medicare Supplement can cover all of the 20% coinsurance. I really hope that made sense, if you have questions, please feel free to contact me. Now I will show you how you can easily look up doctors that are participating, non-participating, and those that have opted out of Medicare through Medicare’s websites. 

I graduated from the University of Nevada Las Vegas before the last turn of the century to be a history teacher, so I have a tendency to make sure everyone understands before moving on. In this example, the provider would receive a total of $546.25 for this service. The provider will receive $380 from Medicare that’s 80% of the $475. You’ll be responsible or your Medicare Supplement will be responsible to pay the doctor the remaining 20% balance of the $475 which is $95. The amount paid by your Medicare Supplement, if you have one, will depend on which Medicare Supplement plan you choose.

What does a Non- participating Provider Allow in Medicare?

They are allowed to charge an additional 15% excess charge because this is a non-participating provider, the 15% is on the $475 and not the $500, which is $71.25. Remember because this is a non-participating provider they can only charge 95% of the Medicare-approved amount. This is how the $546.25 totals $380 from Medicare, the other $166.25 comes from the Medicare beneficiary through the 20% Part B coinsurance of $95 and the excess charge of $71.25, totaling $546.25. The 4 Medicare Supplement plans that will pay the excess charges of $71.25 are Medicare Supplement plan F and G. Also Plans High Deductible F or G will pay but only after the deductible has been met. Almost all of my Medicare Supplement clients have Plan G or N and I still have only a few that have Plan F.

Some States Allow Medicare Excess Charges Some Don’t

Not all states allow providers to charge Medicare excess charges. Excess charges aren’t allowed to charge some providers in the states of

• Pennsylvania
• Vermont
• Connecticut
• Ohio
• Rhode Island
• Minnesota
• Massachusetts
• New York

So if you see providers in these states you don’t have to worry about paying the excess charges. You also need to know this about non-participating providers. If you see a non-participating provider, then the provider may ask for payment upfront from you. 

How Do I Submit a Claim?

I take this again from the Medicare and You handbook on page 53 of the 2020 version. You might have to pay the entire charge at the time of service. Your doctor, provider, or supplier is supposed to submit a claim to Medicare for any Medicare-covered services they provide to you. If they don’t submit the Medicare claim once you ask them to, you need to call 1-800-MEDICARE (1-800-633-4227). I’ve provided a link to the Medicare claim form below and a link to medicare.gov’s site about how to file a claim if needed, I found this interesting on the webpage.

If your claims aren’t being filed in a timely way:

1. Contact your doctor or supplier, and ask them to file a claim

2. If they don’t file a claim, ask for the exact time limit for filing a Medicare claim for the service or supply you got

If it’s close to the end of the time limit and your doctor or supplier still hasn’t filed the claim, you should file the claim. Call me at 1-800-MEDICARE (1-800-633-4227).   

Conclusion — Medicare Excess Charges: Understand to Make Your Best Choice

I hope you enjoyed reading about the Medicare Excess Charges today and I am happy to answer any questions that may arise. Please contact us anytime at 800-910-3382, I would love to hear from you!

About The Author — Christopher Duncan

I’m Chris Duncan, owner of Trusted Benefits Direct. As your Medicare advisor, I want you to know that my business offers superior solutions for everyone. I do not work for insurance companies, which allows me to serve you at a high level without any hidden agendas or conflicts of interest. All resources are provided at no cost. Because people must find peace of mind when looking ahead years down the line.

As an insurance agent, it’s my goal to make your life easier. That includes the process of securing all types of coverage for you and your loved ones, including Medicare Supplements, Medicare Advantage, Medicare Part D, Final Expense life insurance services, and retirement security plans. You can reach me toll-free at 800-910-3382 or get a free quote on MedicareRateQuote.com with just a few clicks! Don’t forget that I also offer contact forms if you would like more information from trustedbenefitsdirect.com – click here now!

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Links: News articles for Providers Accepting Medicare

• https://www.modernhealthcare.com/article/20180130/NEWS/180139995/fewer-doctors-are-opting-out-of-medicare
• https://www.advisory.com/daily-briefing/2018/02/02/cms-data
• https://www.kff.org/medicare/issue-brief/paying-a-visit-to-the-doctor-current-financial-protections-for-medicare-patients-when-receiving-physician-services/
• Medicare Claim Form: https://trustedbenefitsdirect.com/wp-content/uploads/2020/06/Medicare-Claim-Form.pdf
• How to File a Claim: https://www.medicare.gov/claims-appeals/how-do-i-file-a-claim
• https://www.kff.org/medicare/issue-brief/paying-a-visit-to-the-doctor-current-financial-protections-for-medicare-patients-when-receiving-physician-services/
• Medicare and You: https://trustedbenefitsdirect.com/wp-content/uploads/2020/03/2020-Medicare-and-You.pdf Medicare Physician Compare: https://medicare.gov/physiciancompare
• Provider Opt Out of Medicare Search: https://data.cms.gov/opt-out-affidavits