While Medicare does not have a “network” of doctors in the same way that a private insurance policy does, there is still a risk that you could get hit with a bill if you see the wrong doctor. Medicare Part B has what are known as excess charges, which are directly related to whether your doctor accepts “Medicare assignment,” or the Medicare-approved costs for medical services. With Medicare, you have the option to see any doctor you choose, but if they do not accept Medicare assignment, you will end up with excess charges, which could cost you a lot. If you understand how Part B excess charges work, and how Medicare Supplement Plans fill the gaps in Part B, then you can avoid these charges.
Medicare Part B
Original Medicare has two main parts: Part A, or hospital insurance, and Part B, or medical insurance. Part B covers medical services and supplies that are considered medically necessary, including:
- Some preventive care
- Outpatient services such as doctor visits
- Cancer and diabetes screening
- Mental health care
- Laboratory testing
- Ambulance services
- Some vaccines
Medicare Part B generally covers the above at 80%, assuming that the doctor you see accepts Medicare assignment. Medicare will only approve a certain set amount for services; if your doctor agrees to charge only these amounts, that means they accept Medicare assignment. If your doctor does not accept Medicare assignment, they can overcharge the Medicare rate by up to 15%. The amount of money that is charged above the Medicare-approved amount is known as an excess charge, and it could end up being passed on to you. In addition, doctors who are not Medicare-approved may ask for full payment up-front, leaving you to pay the bill and then seek reimbursement from Medicare for 80% of the Medicare-approved amount of your bill.
Here’s an example to break it down:
- You go to your doctor, who accepts Medicare assignment, and they charge you the Medicare-approved amount of $500 for an in-office test. Your doctor then sends the bill directly to Medicare, which pays 80% of the bill ($400), and you pay the other 20% ($100).
- However, if your doctor does not accept Medicare assignment, then they will get 95% of the Medicare-approved fee, plus they can add 15% on top of that to the bill. So for the same in-office test, they can charge you $546.25 (95% of $500 = $475, 15% of $475 = $71.25, $475 + $71.25 = $546.25), meaning you’ll have an excess charge of $46.25 above your usual 20% share. Medicare will only pay 80% of the approved-Medicare amount ($500), so your total out-of-pocket costs would be $146.25, instead of just $100. You might also have to pay the bill up front and then file a claim with Medicare for reimbursement.
How To Avoid The Part B Excess Charges
One way to avoid these excess charges is to check whether your doctor accepts Medicare assignment. But the best way to avoid them, and to save on other out-of-pocket costs? Get a Medicare Supplement Plan. All Medicare Supplement Plans will pay the 20% of costs that Original Medicare does not cover, and some Medicare Supplement Plans will cover Part B excess charges.
The two Medicare Supplements Plans that will cover these excess charges are Plan F and Plan G. If you signed up for Medicare before 2020, you have the option of picking either Plan F or Plan G. But if you signed up for Medicare after 2020, then you can no longer get Plan F and Plan G will be your only option to get coverage for excess charges. The only difference between the two plans is that G does not cover the Medicare Part B deductible.
Looking to save more money? Are you interested in a Medicare Supplement Plan? EZ can help! If you are considering Plan G, then we can compare all plans from different carriers in your area to find the best plan for your needs. If you are undecided on which Medicare Supplement Plan you would like to purchase, then one of our agents will assess your needs, compare all available plans in your area, and provide you with quotes for free. Our agents will guide you towards the plan with the best coverage at the best price. To start comparing plans, simply enter your zip code in the bar above, or to speak directly to one of our agents, call 888-753-7207.