Medicare Part B excess charges are any costs higher than those approved by Medicare. A person is usually required to settle these costs themselves, but help may be available.
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Medicare Part B provides coverage for outpatient services, such as visits to a doctor’s office or appointments with a specialist.
Medicare has set amounts that it will pay for specific treatments and services. If a healthcare professional charges more than the Medicare-approved amount, the patient is required to pay the difference out of pocket.
The difference between the higher cost the provider charges for a service and the Medicare-approved amount is known as an excess charge.
Help is available to cover out-of-pocket expenses, and sometimes this includes Part B excess charges.
This article looks at Medicare Part B excess charges and the additional help that may be available.
Glossary of Medicare terms
- Out-of-pocket cost: This is the amount a person must pay for care when Medicare does not pay the total amount or offer coverage. Costs can include deductibles, coinsurance, copayments, and premiums.
- Premium: This is the amount of money someone pays each month for Medicare coverage.
- Deductible: This is an annual amount a person must spend out of pocket within a certain period before Medicare starts to fund their treatments.
- Coinsurance: This is the percentage of treatment costs that a person must self-fund. For Medicare Part B, coinsurance is 20%.
- Copayment: This is a fixed dollar amount a person with insurance pays when receiving certain treatments. For Medicare, this usually applies to prescription drugs.
Medicare Part B provides medical coverage for non-hospital visits such as to a primary care physician, a specialist, or another healthcare professional.
Medicare has a pre-approved amount that it will pay a healthcare professional for eligible treatment and services.
Providers can bill the Medicare-approved amount only for services that they accept assignment for. However, they are allowed to charge up to 15% more than the Medicare-approved amount for other services. This limit cap is known as the limiting charge.
Providers that do not fully participate only receive 95% of the Medicare-approved amount when Medicare reimburses them for the cost of care.
In turn, the provider can charge the patient up to 15% more than this reimbursement amount. Medicare will not cover this extra charge, which causes Medicare recipients to incur greater out-of-pocket costs.
Excess charges must be paid by an individual, and these costs do not usually count toward an annual deductible.
The list below is a summary of Part B covered services:
- Healthcare provider services: health services a person receives from a licensed medical professional
- Durable medical equipment (DME): the purchase or rental of DME, such as a wheelchair or walker, from a Medicare-approved supplier — a doctor must confirm that the item is medically necessary
- Home health services: skilled nursing or therapy care if a person is unable to leave home
- Ambulance services: emergency transportation, usually to and from a hospital
- Non-emergency ambulance: transportation when no safe alternative is available for medically necessary treatment or services
- Preventive services: screenings and counseling intended to maintain health, prevent illness, and detect health conditions
- Therapy services: outpatient services, including speech, physical, and occupational therapy provided by a Medicare-approved therapist
- Mental health services: group and family therapies, activity therapies, substance use disorder therapy, and some medications that must be administered by a doctor
- Limited prescription drugs: immunosuppressants, cancer drugs, antiemetic drugs, dialysis drugs, and medications from a physician
Diagnostic tests and limited chiropractic care are also usually available with Part B coverage.
Private insurance companies offer Medigap plans, also known as Medicare supplement insurance. Medigap plans aim to fill some of the gaps left by Original Medicare’s out-of-pocket expenses.
Some plans even offer additional benefits, including emergency care provided outside the United States and excess charges.
To be eligible for a Medigap plan, a person must have Original Medicare parts A and B.
A separate monthly premium is payable to the private insurance company selling the Medigap plan.
If a person has Medicare Advantage (Medicare Part C), they cannot legally buy Medigap insurance.
Other Medigap eligibility requirements may apply, depending on the state in which an individual resides.
Each Medigap policy offers different benefits and levels of coverage.
Monthly premiums may vary depending on:
- the private insurance provider
- the state in which a person lives
- when an individual becomes eligible for Medicare
With these considerations in mind, a person may have up to 10 different Medigap policies to compare, including plans A, B, C, D, F, G, K, L, M, and N.
It is important to note that Medigap policies in the states of Massachusetts, Minnesota, and Wisconsin may differ from those available in other states and may also be subject to different rules.
Medigap plans F and G may cover Part B excess charges. High deductible versions of both of these plans are available in some states.
However, as of January 1, 2020, Plan F is not available to those newly eligible for Medicare. Medigap policies that provided coverage for the Part B deductible are also no longer available for new enrollees as of January 1, 2020.
If a person needs help choosing a Medigap policy, they can contact their State Health Insurance Assistance Program (SHIP).
For more information on state Medigap policies, an individual can contact the State Department of Insurance.
Excess charges are treatment or service costs that exceed Medicare-approved amounts.
Some Medigap policies cover Medicare Part B excess charges, and a person can compare plans to choose the most suitable coverage for their needs.
Private insurance companies offer Medigap policies, and, as such, benefits may vary. There may also be different benefits and rules according to the state in which a person lives.
