Part B Excess Charges: Should You Really Worry?

You don’t have to dig far to learn that Medicare Supplement Plan N does not cover Part B Excess charges. So, how important are excess charges and what does that mean for your coverage?

Medicare Supplement Plan N is considered the new kid on the block, even though the plan has been around for 16 years. Only in recent years has the Plan N actually started to resonate with Medicare beneficiaries. Since 2020, Medicare Supplements across the board have been experiencing market turbulence and steep rate increases thus making the Plan N a more attractive option. Plan N typically saves $20-$30/month over the Plan G and in return may charge up to a $20 copay for a doctor office visit and up to a $50 copay for an ER visit*.

*The $50 ER copay may be waived if the ER visit results in a hospital stay.

So, what are excess charges? How much can one spend on an excess charge? And why are Medicare beneficiaries choosing Plan N over Plan G when Plan N leaves exposure to excess charges?

1. A Medicare Part B excess is the difference between what a provider bills and what Medicare has deemed as the allowable rate for a service. Excess charges only happen if a provider does not accept Medicare assignment. According to a KFF article, “How Many Physicians Have Opted Out of the Medicare Program?,” 98% of non-pediatric doctors nationwide accept Medicare assignment. That means 1 out of 50 non-pediatric doctors are likely to not accept Medicare assignment. It’s not surprising then that excess charges are very rare.

2. In addition to Medicare excess charges being an anomaly, Medicare has also set a cap on how much an excess charge can be. Typically, the provider is not allowed to charge more than 15% over or above the Medicare allowed amount.

   Example: If your provider bills $250 but Medicare's approved amount is $100, a non-participating provider can only add up to 15% over the approved amount. So, they can bill you no more than about $15 extra, capping the total around $115.

3. Many people who choose to accept the risk of excess charges have found that saving $250-$300/year is worth the small chance of receiving a bill.

Data source: https://www.kff.org/medicare/how-many-physicians-have-opted-out-of-the-medicare-program/

Other interesting facts regarding excess charges:

Some States Limit Part B Excess Charges

Some states have protected beneficiary laws that have banned providers from billing excess charges. States that have banned excess charges are:

• Connecticut

• Massachusetts

• Minnesota

• New York (limited)

• Ohio

• Pennsylvania

• Rhode Island

• Vermont

Data source: https://legalclarity.org/does-medigap-plan-g-cover-part-b-excess-charges/

Search If Your Provider Participates with Medicare

You can search if your provider accepts Medicare assignment by using the provider search offered by Medicare.gov.

Click here to search your provider: https://www.medicare.gov/care-compare/

On Medicare.gov, providers who accept Medicare assignment are marked with a dollar-sign ($) icon and the note "charges the Medicare-approved amount (so you pay less out-of-pocket)." If a provider is missing that marker (as shown below), it may mean they're non-participating and could bill you an excess charge.

We recommend confirming with the provider's office directly.

The Medicare.gov Provider Look Up Tool

If you have questions about Plan N or your provider charging excess charges, feel free to reach out to our local office in Madison, MS. We’re happy to help! 😊