Medicare Excess Charges

Do I need to worry about Medicare Excess Charges?

The very short answer is: no, you don’t.

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The longer answer will take me about five minutes, so stay with me if you want to know the reasoning behind why you don’t have to worry about Medicare Excess Charges…

Medicare Part B Excess Charges

Medicare Excess Charges only apply to Medicare Part B outpatient services, and the reason they occur is because of the way medical providers contract with Medicare. Providers can contract either as participating providers or as non-participating providers.

Participating Providers

Medicare makes it much more beneficial for a provider to contract as a participating provider. It’s easier to file claims. Medicare also has a higher rate of pay for participating providers.

Because of the benefits, about 96 percent of all providers are contracted as participating providers.

Participating providers agree to accept the Medicare assigned cost for service as payment in full, so they can’t charge you, the patient, more than what they are paid by Medicare for Medicare covered services.

Non-Participating Providers

Four percent of providers contract with Medicare as non-participating providers. They receive a little lower fee for their services from Medicare, but they are allowed to balance bill patients up to 15% above what Medicare pays them for their service. That 15% is the Medicare Part B Excess Charge.

That charge is your responsibility unless you have a Medicare Supplement that covers Excess Charges. To determine if it’s worth it to pay for coverage for Excess Charges, it’s a good idea to look at how often this really happens.

How often are Excess Charges added to medical bills?

A few years ago, one of our Medicare Supplement insurance companies decided to go through all of their claims for a year to see how often Excess Charges came up. What they found was that 99.34% of claims didn’t include any Excess Charges at all. Of the other 0.66% of claims that did include Excess Charges, the average cost of an Excess Charge was under $20.

Excess Charges are very rare, and they aren’t automatic even if you’re seeing a non-participating provider. The provider decides on a case-by-case basis whether to charge Excess Charges at all, and how much to charge for Excess Charges.

The 15% is the upper limit of what they can charge. They are allowed to charge less than that in balance billing as an Excess Charge.

Medicare Supplement Plan G vs Plan N

The question of Excess Charges comes up when people are looking at Medicare Supplement Plan G, which does cover Excess Charges, versus Medicare Supplement Plan N, which does not cover Excess Charges.

Wisconsin Exception

If you’re in Wisconsin, you don’t have lettered plans for Medicare Supplements. Your Excess Charge coverage comes as an optional rider, so it’s not part of your basic benefits, but if you choose to have Excess Charges covered, know that you are purchasing an extra insurance rider and paying extra for that.

Is it worth paying more to cover Excess Charges?

The risk of Excess Charges is low, and the out-of-pocket risk to you even if you encounter Excess Charges is so low that paying more for insurance coverage for Excess Charges generally doesn’t make sense.

Are my providers participating or non-participating?

If you’re wondering how your providers are contracted with Medicare, there is a physician compare tool where you can look up all of your providers. Provider contracting can change annually, so it’s a good idea to periodically go to that tool and look up your providers just to see if their contracting has remained the same or if they’ve had a change from one year to the next.

So that’s the long answer. Same as the short answer just more wordy. No, you don’t need to worry about Medicare Excess Charges. I hope this has helped to lessen your stress a little bit regarding Medicare.

If you have a question about Medicare, please feel free to reach out either by email, Facebook, or in the comments here, and we will definitely compile your questions and take a look at answering them in future videos. If you are new to Medicare and aren’t sure how to compare plans, watch our free online video to learn how to find the best Medicare coverage for you.