If your doctor does not accept Medicare assignment, you may be charged up to 15% beyond what Medicare pays. This is called a Medicare Part B excess charge.

Medicare assignment is the cost that Medicare has approved for a particular medical service. Medicare-approved healthcare professionals accept Medicare assignment.

Doctors who don’t accept Medicare assignment may charge more for medical services than the amount assigned by Medicare. Costs above this amount are known as Part B excess charges.

These charges are in addition to your deductible, coinsurance, and copay. They don’t count toward your deductible.

But Medicare limits these extra charges to 15%. This is referred to as the limiting fee or limiting charge, and it is the maximum you can be charged over the Medicare-approved amount for certain services.

Some Medigap plans may cover Part B excess charges. Eight states have banned these fees altogether.

Part B excess charges can wind up costing you significantly, but there are ways you can avoid them.

Not every healthcare professional accepts Medicare assignment. Doctors who accept Medicare assignment have agreed to accept the Medicare-approved amount as their full payment for a service.

A doctor who doesn’t accept Medicare assignment may charge you up to 15% more than the Medicare-approved amount. This is known as a Part B excess charge.

Doctors may also opt out of Medicare completely. In this case, Medicare will not pay for any care you receive from this doctor unless the care is emergency treatment. Healthcare professionals may opt out of Medicare for 2 years at a time, meaning that every 2 years they must opt out again.

When you visit a healthcare professional or equipment supplier who accepts Medicare assignment, you can be sure that you’ll be charged the Medicare-approved amount only.

These doctors send the bill for their services directly to Medicare rather than handing it to you. Medicare pays 80%, then you receive a bill for the remaining 20%.

Doctors who do not accept Medicare assignment can ask you for full payment up front. You will be responsible for getting reimbursed by Medicare for 80% of the Medicare-approved amount of your bill.

Here are some examples of how this works:

Your doctor accepts Medicare assignment

Your general practitioner who accepts Medicare might charge $300 for an in-office test. They would send that bill directly to Medicare rather than asking you to pay the entire amount.

Medicare would pay 80% of the bill ($240). Your doctor would then send you a bill for 20% ($60). So, your total out-of-pocket cost would be $60.

Part B excess charges do not count toward your Part B deductible.

Your doctor doesn’t accept Medicare assignment

If you instead go to a doctor who doesn’t accept Medicare assignment, they might charge you $345 for the same in-office test. The extra $45 is 15% over the cost that a doctor accepting Medicare assignment would charge. This amount is the Part B excess charge.

Instead of sending the bill directly to Medicare, the doctor would ask you to pay the entire $345 upfront. You would then be responsible for filing a claim for reimbursement with Medicare. That reimbursement would be equal to only 80% of the Medicare-approved amount ($240).

In this case, your total out-of-pocket cost would be $105.

Your doctor has opted out of Medicare completely

If you go to a doctor who has opted out of Medicare completely, they are considered “nonparticipating.” In this example, a nonparticipating doctor may charge you $400 for the same in-office test. Medicare doesn’t cover any of the cost of this test ($0).

The doctor will not bill Medicare and will ask you to pay the entire $400 upfront. You may be able to create a payment plan through a private contract directly with them.

You cannot file a claim with Medicare, and there is no Medicare reimbursement. So, in this case, your total out-of-pocket cost would be the full $400.

Certain states have passed laws that make it illegal for healthcare professionals to charge Medicare Part B excess charges. These states are:

  • Connecticut
  • Massachusetts
  • Minnesota
  • New York
  • Ohio
  • Pennsylvania
  • Rhode Island
  • Vermont

If you live in any of these eight states, you don’t have to worry about Part B excess charges when you see a doctor in your state.

You can still be charged Part B excess charges if you receive medical care from a healthcare professional outside your state who doesn’t accept Medicare assignment.

Do not assume that a doctor or supplier accepts Medicare. Instead, always ask whether they accept assignment before you book an appointment or service.

It’s a good idea to double-check that they accept Medicare and ask how much the service will cost, even with doctors you have seen before.

Medigap is supplemental insurance that you might be interested in buying if you have Original Medicare (parts A and B). Medigap policies help pay for the gaps left in Original Medicare coverage. These costs include deductibles, copayments, and coinsurance.

The two Medigap plans that cover Part B excess charges are:

  • Medigap Plan F: Plan F is no longer available to most new Medicare beneficiaries. If you became eligible for Medicare before January 1, 2020, you may still purchase Plan F. If you currently have Plan F, you are able to keep it.
  • Medigap Plan G: Plan G is a very inclusive plan that covers many of the things Original Medicare doesn’t. Like all Medigap plans, it costs a monthly premium in addition to your Part B premium.

Medicare Part B is the part of Medicare that covers outpatient services, such as doctor visits and preventive care. Medicare Part A and Medicare Part B are the two parts that make up Original Medicare.

Some of the services Part B covers include:

  • flu vaccine
  • cancer and diabetes screenings
  • emergency room services
  • mental health care
  • ambulance services
  • laboratory testing

If your doctor, supplier, or provider doesn’t accept Medicare assignment, they may be able to charge you up to 15% more than the Medicare-approved amount of your medical service. This overage is referred to as a Part B excess charge.

You can avoid having to pay Part B excess charges by seeing only Medicare-approved providers.

Medigap Plan F and Medigap Plan G both cover Part B excess charges. But you may still have to pay your healthcare professional up front and wait for reimbursement.