If you are enrolled in Original Medicare (Medicare Part A and Part B) – and particularly if you also have a Medicare Supplement insurance plan – then you might have seen the term “Excess Charges” referred to in your coverage or on your bills. If you have a Medicare Advantage plan, this won’t matter a bit to you!
So for those of you on Original Medicare with, or without a Medicare Supplement, pay attention. When a doctor chooses to accept payments from the federal government Medicare program, they get paid a certain amount of money per procedure. This is called, “accepting Medicare assignment.” That amount is set by Medicare. The vast majority of doctors accept that agreed-upon fee, but not all. That’s where Medicare excess charges come in. If a doctor does NOT accept Medicare assignment, they still have to “accept” Medicare’s fee structure, but can charge you up to 15% MORE, on top of that fee.
Well, wait a second… how many doctors are we talking about here? 50% of all doctors? Or 5%? Answer: much closer to 5%. As I wrote about a year or so ago, (you can read it by clicking here) the vast, vast majority of doctors simply accept Medicare assignment and won’t try any funny business by charging you more.
Like I said above, if you do happen to run into a doctor that won’t accept Medicare assignment, he or she can charge you 15% more for the service. Doesn’t sound like a big deal, until you start talking about multiple visits for say, cancer. And, there’s no limit to the number of TIMES that doctor can charge you the additional 15%. It’s not like it’s just a one-time deal. If a doctor or other medical provider accepts Medicare’s assignment rates (i.e., the rate that Medicare deems a certain procedure should cost), it means that they will not charge you an amount that is more than the allowable Medicare rate. As an example, if you undergo a procedure that, according to Medicare’s allowable rate is $10,000, then the medical provider will not be allowed to charge any more than that amount for this service.
If you live in Connecticut, Minnesota, Ohio, Pennsylvania, Rhode Island, Vermont, Massachusetts or New York, never fear! They’ve outlawed this practice. However, in the rest of the states, doctors – including surgeons and specialists – are allowed to charge that additional 15% more than the Medicare approved amount for medical procedures. So, how do you “fix” this?
… and one of them is going away for some people, very soon. That one is Medicare Supplement Plan F. The other is Medicare Supplement Plan G which is essentially the “new” replacement for Medicare Supplement Plan F, now that it’s going away for people who turn 65 after 2020. Only difference between the two is that Plan F covers the Medicare Part B deductible. Plan G does not.
Or…. get a Medicare Advantage plan.
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Author Bio: Ben started Prepare for Medicare in 2014 to help people help people get objective answers to questions about Medicare. He’s held leadership roles at numerous Fortune 500 Medicare health insurers in product development, sales, marketing and strategy for over 20 years.