Medicare Part B Excess Charges and How to Avoid Them
Normally, Medicare Part B covers 80% of physicians' fees for Medicare beneficiaries — over and above an annual deductible, which is $233 for 2022.
Health care providers who participate in Medicare agree to accept the official Medicare rate for any given covered service they provide. So, in most cases, there is no need to worry about excess charges under Medicare Part B.
But Medicare reimbursement rates are notoriously low, and not all doctors choose to participate. This could be a problem if you are new to Medicare and your personal physician does not accept Medicare patients.
If you choose to go outside of Medicare to see one of these doctors, they can charge you up to 15% more than the official Medicare-approved rate for that medical service. This extra expense over and above the maximum reimbursement rate for doctors is called the Medicare Part B extra charge.
It's important you understand the ramifications of the extra charge and the steps you can take to avoid it.
Who pays Medicare Part B excess charges?
You will have to pay Medicare Part B excess charges yourself, out of pocket. However, certain Medicare Supplement plans — Plan F and Plan G — cover Plan B excess charges completely.
Do Part B excess charges count towards my Part B deductible?
No. This is important because that means there is effectively no limit on the number of excess charges you could pay in a given year.
If you have a lot of medical appointments and other plan B expenses, and no outside coverage, you could potentially rack up hundreds or even thousands of dollars in Plan B excess charges.
Do all states allow Plan B excess charges?
No. Passing Plan B excess charges on to Medicare patients is prohibited in the following states:
- Connecticut
- Massachusetts
- Minnesota
- New York
- Ohio
- Pennsylvania
- Rhode Island
- Vermont
How can I avoid paying Part B excess charges?
The simplest way to avoid paying excess charges is to only see doctors who agree to take Medicare patients and accept Medicare assignment.
Fortunately, more than nine out of every 10 primary care doctors and most specialists take Medicare assignment. That means they have committed to limiting their charges to the maximum Medicare reimbursement.
Medicare Supplement insurance can help</b>
The best strategy for Medicare beneficiaries is to ask all doctors, and other providers, up front if they accept Medicare assignment.
If they don't, and you don't have a Medicare Supplement (Medigap) Plan F or Plan G, you may get charged that 15% overage.
Alternatively, you can buy a Medigap Plan F or G policy, both of which cover Plan B excess charges. You'll pay a premium for these benefits. But you will also pay little or nothing out of pocket for services covered under Medicare Parts A and B.
Unfortunately, Plan F is no longer taking new Medicare enrollees. However, if you were newly eligible for Medicare before Jan. 1, 2020, you can still enrol in Plan F and keep the plan as long as you want as you are grandfathered in.
But you can still buy Plan G, which provides nearly the same robust coverage at a lower premium. The only difference is that Plan F covers your entire Part B deductible, while Plan G does not.
Tip: If you live in one of the states that does not allow Part B excess charges, you may save money by buying a Plan N policy. These plans come at a lower premium than Plan G but provide all the same coverage and benefits — except Medicare Part B excess charges, which are illegal in your state anyway.
###