Our Guide To Understanding Medicare Excess Charges
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 your questions 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 additional 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 an additional $150 for their services.
Now, if you have a Medigap (Medicare Supplement) Plan F or Plan G, you have full coverage for any and all 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 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 the excess charges 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 some people when the approved amounts incurred are large.
The odds of running into major Part B excess charges on a medical claim from your outpatient providers is low.
If you want to put the risk to bed, a Medicare Supplement Plan G would be my recommendation. That plan includes coverage for “Part B Excess Charges.”
Yes, 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. If you have deep pockets, Plan F will always be the no hassle, Rolls Royce of Medicare Supplement plans.
All charges outside the hospital will fall under Part B of Medicare. Part A is hospital care, Part B is outpatient care and services.
Part B expenses are applicable to excess charges only. The stay in a hospital is strictly under Part A.
Keep in mind that there could be a reverse trend in providers limiting their charges to the Medicare approved amount an opt to start charging 15% additional. Medical billing itself has become more difficult for providers to receive reimbursements for services rendered. On the healthcare end of things, there are some complaints about reduced payments for certain services.
Could this create a trend of part b excess charges be applied for frequently?
There is a lot of pressure for medical providers to take reduced fees yet provide 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 and 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. Medicare Part B excess charges as a benefit may be something to consider in your Medigap plan.
If you are worried about how an excess charge could affect you, it would seem best to make sure you are not overpaying on your Medicare Supplement plan first. That could be costing you hundreds of extra dollars each and every year just for having the wrong carrier insuring you.
We see many seniors choosing loyalty to an insurance company that is overcharging them believing the insurer has been good to them. They don’t understand that Medicare demands they perform like this. Medicare Supplements are regulated at the State and Federal level to be certain they perform to Medicare guidelines.
There are, very often, other insurers offering the same identical plan for hundreds of dollars a year less.
Why overpay? If your on a fixed income and/or money conscious, take action and find out which insurers you can save money now. Don’t get sucked into the idea that one company pays better than the other. Having access to 99% of the carriers out there, I can tell you, that is completely not true. I’ve had some of my own clients fight me tooth and nail insisting that there supplemental company was the best. I’ve replaced a lot of seniors Medigap plans. In over 20 years in business, no one has ever told me that saving money on their Medigap plan with another insurer was a mistake.
No one changed back to the carrier that was overcharging them either.
What does that say?
The happiest seniors are all on Plan F, Plan G, Plan N and High Deductible Plan F. It’s not because they have a policy with United American, Bankers Life and Casualty or AARP (United Health Care), it is the plan letter.
Medicare standardized this all in 1992.
There are no claims difference between Mutual of Omaha, Bankers Fidelity or any of the previously mentioned insurers on any of those plans.
Don’t make that mistake yourself. It just comes down to cost of ownership.
How much are you paying a year to own the plan you have? Could you save real money? Unless you have someone that know the business well, there is a good chance you are overpaying.
Before you concern yourself with Part B Excess Charges. which you very well may never incur regardless of health, overpaying for a Medicare Supplement is a good way to lose you hard earned money, year after year.
Hanging onto loyalty to an insurance company will get you taken advantage of financially in the long run. They are paying because Medicare requires them to follow the rules or be banned from the business. The issue with staying “loyal” becomes a huge problem if your health turns bad and the insurance company has a huge rate increase. Now you are just stuck with that company.
Does that sound like a good situation for seniors on a fixed income?
This happens folks and I mean regularly!!
The key to making a change is to do it at your healthiest so you have the most competing options.
We can help you find out if your are being grossly overcharged in less than 5 minutes on the phone by shopping your plan out to all the companies in the state.
If you have decided you need Part B Excess Charge protection, Plan F and Plan G will give you the peace of mind you want.
Hope this article has answered your questions today and provided some solutions to saving money.
As always, feel free to comment below.
Give us a call right away if you would like us to review your coverage to see where you stand. We’re always here to help. 269-244-3420