Our Medicare Part B Excess Charges Guide
If you have been doing your due diligence and looking into Medicare Supplement (Medigap) plans, Plan F and G in particular, you have probably run across the terminology “Part B excess charges.” Sounds good doesn’t it? An extra benefit that none of the other standardized Medicare plans actually have. But what does it really mean? What are Medicare Part B excess charges anyway? Do I really need that benefit?
Well, you are not alone in wanting to have this question answered. The truth is, most folks really don’t know or worse yet, good numbers of misinformed people believe that the benefit pays for healthcare claims not approved by Medicare.
This assumption goes back even 20+ years and is completely false. No Medigap plan will pay a nickel if Medicare does not first approve the claim and pay its portion first.
Remember, Original Medicare has standardized plans. All participating companies must pay according to the benefits outlined in your plan after Medicare itself has payed it’s 80% of the approved amount.
For most people, Part B excess healthcare charges are usually pretty minimal… but not always. It is good to have an understanding of how you can incur them as well its effect on your actual out of pocket expenses.
What Does Medicare Part B Excess Charges Mean?
Part B Excess Charges Explained
Medicare has agreements with the vast majority of healthcare providers to perform approved services for a preset amount. All providers that accept Medicare are said to “participate” with Medicare. A provider that accepts Medicare approved and limiting amounts as payment in full are said to accept “assignment.” The difference between these two terms are where part b excess charges can occur.
All providers that accept Medicare assignment cannot charge above and beyond the approved amount. Your average doctor, ambulance, physical therapist etc. have agreed to Medicare’s limiting/approved amount to cover a particular healthcare claim.
Now, there are also providers who do not accept assignment with Medicare though they participate with Medicare. By law, these particular providers are allowed to charge up to 15% above Medicare approved amounts on approved Part B charges. For example, your doctor refers you to a specialist such as a cardiologist for an evaluation. As it turns out, this specialist does not accept the Medicare limiting amount of the (fictitious) $100 Medicare might have otherwise paid. Instead, the specialist office charges an additional $15.00 as they are permitted. Part B excess charge coverage would pay this up charge. 10 months later, Jane ends up in an ambulance. She had a heart attack and the nearest ambulance service came. As it turned out, this company did not accept Medicare as payment in full either. Medicare approved $1000 and the ambulance company balanced billed and additional $150 for their services.
Now, if you have a Medigap (Medicare Supplement) Plan F or Plan G, you have full coverage for any Part B excess charges. In the example above, Jane paid no excess charges due to her Plan G. Remember to keep in mind, with Plan G, you must pay your Part B deductible ($183) during the year before Medicare and your supplement pick up the bill with any Part B healthcare expenses. As a refresher, Part B expenses are all outpatient healthcare as approved by Medicare.
What States Do Not Allow Medicare Part B Excess Charges?
There are a few states that do not allow any provider to charge you above what Medicare allow IF they participate with Medicare. Connecticut, Massachusetts,Minnesota, New York, Ohio, Pennsylvania, Rhode Island and Vermont.
Am I suggesting that you don’t necessarily need that benefit in your Medigap policy?
No, not necessarily. However, if you do not travel out of state and reside in one of the above you probably will not trigger the benefit.
What Are Medicare Part B Excess Charges – Conclusion
Most providers have accepted Medicare limiting amounts as payment in full for years. If you have Original Medicare and a good supplement, you’re typically ok. Part B excess charges are pretty rare in terms of “big bills,” though it can happen. Where they can get hefty for example, would be an air ambulance that does not accept Medicare’s limiting amount. Oxygen providers are another possible risk. While far and few between, those billable charges are much higher. A 15% “excess charge” can be a very significant amount of money for many people when the approved amounts incurred are large.
The odds of running into major Part B providers is pretty darn low. If you want to put the risk to bed, a Medicare Supplement Plan G would be my recommendation. I am directing folks away from Plan F at this time due to the new MACRA laws set to take effect in January of 2020.
All charges outside the hospital will fall under Part B of Medicare. Part A in hospital care, Part B is outpatient care and services.
As an agent watching payments to providers in recent years, it would not surprise me to see an increase in providers that will opt to start charging 15% additional. Medical billing itself has become more difficult for providers to receive reimbursements for services rendered.
There is a lot of pressure for medical providers to take reduced fees yet provided faster service. Providers would have to have their Medicare agreement altered before they can charge you anything additional. A provider just can’t decide to charge you an extra 15% without going thru dropping their assignment agreement with Medicare.
You may always ask your provider the question, “do you accept Medicare assignment?” If yes, there will be no 15% upcharges. Again, very few providers do not accept assignment. I’m playing the devils advocate here to help you work thru this healthcare issue.
This of course is theory on my part, but take it for what it is worth. Part B Excess Charges as a benefit may be something to consider in your Medigap plan.
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