Will I have to pay a Part B excess charge?

How do Part B excess charges work?

A provider that charges an excess charge is one who doesn’t accept Medicare assignment.  Consequently, the provider can “balance bill” the patient above the Medicare-approved amount.  There is a federal law that limits how much the provider can bill – known as the “limiting charge”.  The law restricts the excess charge to 115% of the Medicare-approved amount.

How common are Part B excess charges?

Excess charges are not common.  In fact, only 4% of medical providers charge an excess charge.

Which Medigap plans cover the Part B excess charges?

Plan F and Plan G are the only two Medicare Supplement plans that cover Part B excess charges.  However, Plan F is no longer sold to anyone that turns 65 after January 1, 2020.  As a result, Plan G is the only plan available that covers Part B excess charges.  All other Medigap plans are exposed to any Part B excess charge.

Part B excess charge billing example:

Let’s assume you visit a doctor for a procedure and the doctor doesn’t accept Medicare assignment.  This means he doesn’t accept Medicare’s approved amount as full payment for his services.  The doctor normally charges $500 for the procedure.  However, the Medicare-approved amount for the procedure is only $275.  Let’s see how this scenario plays out if you have one of the below coverages.

1.  Original Medicare

1. 1. Doctor charges:  $316.25 (115% of the Medicare approved amount of $275).  He can charge this because he doesn’t accept Medicare “assignment”.
   2. Medicare pays:  $220 (80% of the Medicare approved amount of $275).  Doctor’s visits are billed to Part B and Medicare pays 80% of Part B charges.
   3. You pay Part B coinsurance:  $55 (20% of $275).  You are responsible for 20% of all Part B charges.
   4. You pay: $41.25 for the Part B excess charge ( $316.25 – $275).

2.  Original Medicare + Medicare Supplement Plan G

Note:  We will assume you have already paid the Part B annual deductible for this scenario.

1. 1. Doctor charges:  $316.25 (115% of the Medicare approved amount of $275).  Remember, this doctor can charge this amount because he doesn’t accept Medicare “assignment”.
   2. Medicare pays:  $220 (80% of the Medicare approved amount of $275).  Doctor’s visits are billed to Part B and Medicare pays 80% of Part B charges.
   3. Your Plan G pays:  $96.25 (($55 goes to the 20% Part B coinsurance (20% of $275) AND $41.25 pays the excess charge ($316.25 – $275).
   4. You pay:  $0

3.  Original Medicare + Medicare Supplement Plan N

Note:  We will assume you have already paid the Part B annual deductible for this scenario.

1. 1. Doctor charges:  $316.25 (115% of the Medicare approved amount of $275).  He can charge this because he doesn’t accept Medicare “assignment”.
   2. Medicare pays:  $220 (80% of the Medicare approved amount of $275).  Doctor’s visits are billed to Part B and Medicare pays 80% of Part B charges.
   3. Your Plan N pays:  $55 (20% Part B coinsurance (20% of $275)
   4. You pay:  $41.25 for the Part B excess charge ( $316.25 – $275).

How to avoid Medigap Plan N excess charges

There are 3 ways to avoid an excess charge if you have Medicare Supplement Plan N:

1. The odds are with you – 96% of all Medicare providers don’t charge an excess charge
2. We can look up all your doctors and make sure you they don’t charge an excess charge.  You can also do this yourself by going to the physician finder tool on Medicare.gov.
3. Call your provider.  This isn’t recommended because sometimes the doctor’s office gets confused between accepting Medicare “assignment” and accepting Medicare.