Part B Excess charges occur when a doctor overcharges Medicare more than the Medicare-approved amount. Doctors who accept “assignment” have agreed to accept the Medicare-approved amount as full payment for services rendered. Doctors who do not accept “assignment” may overcharge the Medicare rate for a particular service by a maximum of 15%. This is called an “excess charge.”
Susan goes to a doctor that does not accept “Medicare assignment.” The doctor performs a test. The Medicare rate for this test is $500. Doctors who do not accept assignment receive 95% of the Medicare fee and can add 15% to that. In this case, Susan could be responsible for the $71 excess charge.
95% of $500 = $475.
$475 x 15% = $546.
$546 – $475 = $71.
Medicare pays the doctor $475 and Susan pays the doctor $71. Additionally, when dealing with a doctor that does not accept Medicare assignment the patient (Susan) may be responsible for paying the doctor the entire amount and then filing a claim with Medicare herself. To get reimbursed.
If Susan has a supplement plan that does not cover excess charges such as Plan N, she would be responsible for the “excess charge” of $75. Excess charges can be easily avoided altogether by simply asking your doctor if he or she accepts “Medicare Assignment.” If they do, they cannot overcharge the Medicare-approved amount. In addition, Plans F and G covers excess charges at 100%.
The good news is that doctors who accept Medicare aren’t allowed to charge any more than 15% above the assigned rate. The bad news is that you might get hit with a really large and unexpected bill despite having high quality health insurance.
Generally, it is wise to make sure the doctor you see accepts Medicare assignment, regardless of the supplement plan you have. This will prevent you from having to deal with claim issues, which can be a headache.
If you live in the following states you are protected from excess charges due to MOM (Medicare Overcharge Measure): Connecticut, Massachusetts, Minnesota, New York, Ohio, Pennsylvania, Rhode Island and Vermont.