What Are Medicare Excess Charges?

Imagine this: You’re checking out of the doctor’s office and the doctor's charge is 15 percent more than the Medicare rate. What happened? Is this a mistake?

Participating providers take assignment.

Many seniors have been in similar situations. No, it’s not a mistake. In Original Medicare, your Part B costs, after the deductible is met, depend in part on what type of provider you see. A participating provider agrees to accept Medicare's approved amount for health care services, and bills Medicare directly for your services. This is called taking assignment. Your coinsurance when using a participating provider is generally 20% of Medicare-covered services.

Non-participating providers do not take assignment.

A non-participating provider accepts Medicare but does not agree to accept Medicare's approved amount in all cases. Non-participating providers can charge up to 15% more than the Medicare approved amount for the cost of services provided, on a claim by claim basis. For some claims, you may be responsible for your 20% coinsurance plus a 15% excess charge on the Medicare-approved amount for covered services. Excess charges are not allowed in some states.

Ask your doctor’s office if they are Medicare participating.

Be sure to ask your doctor's office if your provider is Medicare participating or non-participating. There are Medicare Supplement insurance plans that provide a benefit to cover excess charges if you see a non-participating provider. Contact a licensed insurance agent for more information on which Medicare Supplement insurance plan to choose for excess charges coverage.