What is Medicare Part B Excess Charges and How You Can Avoid Them

If a provider does not accept Medicare, they can charge you an additional 15% more than the Medicare allowable amount. Medicare Part B excess charges aren’t common, but they can be distressing when they arise. These charges are often unexpected and can potentially cause financial hardship when you can least afford it. 

Thankfully, Part B excess charges need not trouble you. Understanding what these charges are and how to avoid them can help you reduce your risk of a confusing Medicare bill. In this article, we outline how to avoid Part B excess charges, and we detail the Medicare Supplement plans (also called Medigap) that can pay for Medicare excess charges.

What are Medicare Part B Excess Charges: The Basics

Most doctors and health care providers have a contract with Medicare to accept assignment. This means they accept the Medicare-approved amount as full payment for services that Medicare beneficiaries receive.

These providers send their invoices directly to Medicare rather than you handling the charge. Medicare then typically pays 80% of the cost of Part B services (e.g., doctor’s office visits, X-rays, crutches or a wheelchair) and you’ll receive a bill for the remaining 20%. This 20% is your Medicare Part B coinsurance.

Doctors who don’t accept assignment may charge a Medicare Part B excess charge, which could be up to 15% more than the amount Medicare approved for the cost of that specific service or piece of medical equipment.

People with Original Medicare (Medicare Part A and Part B) or a Medicare Advantage plan (Part C) may face Medicare Part B excess charges. If this happens, you may need to pay for the entire medical bill upfront. You can then file a claim with Medicare for reimbursement. Medicare will cover 80% of the Medicare-approved amount, and you’ll be responsible for the remaining 20% along with the Part B excess charges.

It’s important to note how much Medicare Part B's annual Part B deductible excess charges do not count towards your , which is $240 in 2024. 

How Medicare Excess Charges Work

Let’s say you need an echocardiogram to check your heart function. A doctor who accepts assignment from Medicare may charge $100 for the procedure. They would receive $80 from Medicare and send you the bill for the Part B coinsurance amount of $20. If you have a Medicare Supplement plan, your Medigap insurance plan will cover all or part of the Part B coinsurance ($20 in this example).

If instead, you decided to attend a clinic that doesn’t accept Medicare assignment, the doctor could impose a Medicare Part B excess charge of 15% on top of the $100 charge for the echocardiogram. Instead of $100, the total for the service would be $115. 

The doctor may require you to pay the total bill upfront instead of submitting it to Medicare, in this situation. You’d then file a claim with Medicare for reimbursement. Medicare would cover 80% of the $100 Medicare-approved amount as before. You would pay the remainder, meaning your out-of-pocket cost would be a total of $35 rather than $20.

This example shows how Medicare Part B excess charges work with a relatively small medical bill. However, doctors can also impose Part B excess charges on much larger bills costing thousands of dollars. 

How Common Are Medicare Excess Charges?

Just 1% of non-pediatric physicians have opted out of Medicare. In Alaska, Colorado and Wyoming, this figure is slightly higher at 2%. Medicare excess charges are uncommon, mainly because most health care providers accept Medicare assignment.

It’s illegal for health care providers to charge their patients Part B excess charges in the following eight states:

• Connecticut
• Massachusetts
• Minnesota
• New York
• Ohio
• Pennsylvania
• Rhode Island
• Vermont

Residents of these states can feel confident they’ll never need to pay Part B excess charges when receiving medical treatment from local providers. This applies even to health providers who don’t accept Medicare assignment. Remember that you may still face these charges if you get medical treatment outside your home state.

How to Avoid Medicare Part B Excess Charges

Once you’re billed for Medicare Part B excess charges, you have no option but to pay them. 

For people who live in a state where health care providers can impose Medicare Part B excess charges, the following steps can help you avoid them in the future:

• Ask health care providers if they accept Medicare reimbursement for payment in full when booking your treatments. If they do, you won’t face Medicare Part B excess charges. If they don’t accept Medicare reimbursement for payment, ask whether you’ll receive an excess charge. At this point, you can find another provider that won’t charge you more.
  
  Because a provider’s rules and conditions often change, it’s a good idea to ask these questions whenever you make a booking, even if you’ve seen that provider before.
  
  
• Get a Medigap supplement plan that covers Part B excess charges. Plan F and Plan G are the only two Medigap plans that cover these extra charges.
  
  Plan F health insurance is no longer available to new beneficiaries, but everyone can buy Plan G. If you first became eligible for Medicare before January 1, 2020, you can still apply for Plan F if it’s available where you live. If you became eligible for Medicare after that date, you won’t be able to apply for Plan F, but you can consider Plan G.

The Importance Of Understanding the Part B Excess Charges

Medicare Part B excess charges can trouble unsuspecting beneficiaries, but you don’t need to face these unnecessary and often expensive charges. Taking proactive steps can make sure you’re never charged more than you expect for your medical care.

Medigap Plans That Cover Part B Excess Charges

Certain Medicare Supplement insurance plans can cover Medicare Part B excess charges even if your doctor does not accept Medicare assignment. Medigap Plan F and Plan G include a benefit that covers all Medicare excess charges.

Medicare beneficiaries with Medicare Supplement Plan F or Plan G would not pay the excess charges, even if they visit a non-participating doctor.

You can get help comparing Medicare Supplement Plan F vs. Plan G, and you can also learn more about other Medicare Supplement plan options available where you live by calling to speak with a licensed insurance agent. They'll be able to help you compare what the available plans can pay for, how much the plan premiums are and help you apply for a plan if you're eligible.

You can also compare plans yourself online. It's free, and there's no obligation to enroll.