Medicare Part B Excess Charges Explained

What Are Part B Excess Charges?

Part B excess charges occur when a doctor who doesn't accept Medicare assignment charges more than the Medicare-approved amount. The doctor can charge up to 15% above Medicare's approved rate.

Example

Medicare approves $100 for a service:

• Doctor accepts assignment: You pay $20 (20% coinsurance)
• Doctor charges excess: Doctor bills $115. You pay $35 ($20 coinsurance + $15 excess charge)

How Common Are Excess Charges?

Very rare! Here's why:

• Over 95% of doctors accept Medicare assignment
• 8 states prohibit excess charges by law
• Even non-participating doctors often don't charge them
• You can check if a doctor accepts assignment before your visit

States That Prohibit Excess Charges

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

If you live in these states, excess charges aren't a concern at all!

Which Medigap Plans Cover Excess Charges?

Only two plans cover Part B excess charges:

• Plan F: 100% coverage (if eligible)
• Plan G: 100% coverage

All other plans (including Plan N) don't cover excess charges.

Should You Pay More for Excess Charge Coverage?

For most people, no. Here's why:

• Excess charges are rare
• When they occur, the maximum is 15% (usually much less)
• You can avoid them by checking if doctors accept assignment
• The extra premium for Plan G vs. Plan N usually exceeds any excess charges you'd pay

Plan G costs ~$40/month more than Plan N ($480/year)

You'd need $3,200 in excess charges annually to make Plan G worth it for this benefit alone!

How to Avoid Excess Charges

• Ask if the doctor accepts Medicare assignment before scheduling
• Use Medicare's Physician Compare tool at medicare.gov
• Most doctors clearly state their Medicare participation status