Introduction
Navigating the complexities of Medicare can be challenging, especially when it comes to understanding potential out-of-pocket costs. One such cost is a “Medicare Part B Excess Charge.” This article will delve into what excess charges are, how they work, and strategies to avoid them.
What are Medicare Part B Excess Charges?
In essence, a Medicare Part B Excess Charge arises when a doctor who accepts Medicare patients chooses not to accept “Medicare Assignment.” Let’s break that down:
- Medicare Assignment: When a doctor “accepts assignment,” they agree to accept the amount Medicare approves for a service as full payment. They cannot bill you for any amount above this approved rate.
- Non-Participating Providers: Some doctors, while accepting Medicare patients, do not sign on to Medicare Assignment. These “non-participating providers” can charge up to 15% above the Medicare-approved amount for a service. This additional fee is the “excess charge.”
How Excess Charges Work: A Real-World Example
Let’s imagine a scenario to illustrate how excess charges might work:
Scenario 1: Doctor Accepts Medicare Assignment
- You have a doctor’s visit. Medicare approves a $100 reimbursement.
- Assuming you’ve met your Part B deductible, Medicare pays 80% ($80).
- You pay the remaining 20% coinsurance ($20), but this is often covered by Medicare Supplement Plans (Medigap).
Scenario 2: Doctor Does Not Accept Medicare Assignment
- The Medicare-approved amount is reduced to 95% of the original amount ($95 in this case).
- Medicare pays 80% of this reduced amount ($76).
- Your coinsurance is 20% of the reduced amount ($19).
- The doctor can now charge you an additional 15% above the reduced Medicare-approved amount (up to $14.25).
Factors Limiting Excess Charges
While the potential for excess charges exists, it’s reassuring to note that they are not as common as one might think:
- State Laws: Several states have outlawed or significantly limited Medicare excess charges.
- High Participation Rate: The vast majority of doctors who accept Medicare patients also participate in Medicare Assignment, meaning they cannot bill excess charges.
Medicare Supplement Plans and Excess Charges
Medicare Supplement Plans (Medigap) can provide valuable protection against excess charges:
- Plans F and G: These plans, with Plan F no longer available to new Medicare beneficiaries as of 2020, provide complete coverage for Medicare excess charges.
- Plan N: A increasingly popular option, Plan N does not cover excess charges. However, given the low likelihood of encountering them, it remains a worthwhile consideration for many due to its lower premiums and slower premium increase rates.
Avoiding Excess Charges
Here are some ways to ensure you’re not surprised by excess charges:
- Choose Plan F or G (if eligible): This offers complete peace of mind.
- Verify Doctor Participation: Use Medicare.gov’s provider tool to confirm your doctor accepts Medicare Assignment. Look for the dollar sign symbol for confirmation.
Conclusion
While Medicare Part B excess charges can seem daunting, understanding how they work and their relative infrequency can alleviate concerns. Choosing the right Medicare Supplement Plan and confirming your doctor’s participation status in Medicare Assignment can effectively minimize your risk. Remember, knowledge is power when navigating the world of Medicare!