What excess charges are

Excess charges are amounts your doctor or other healthcare provider bills you above what Medicare Part B allows them to charge. When a provider does not accept Medicare assignment, they can legally bill you for the difference between their full fee and the Medicare-approved amount — and that difference is the excess charge.

Medicare sets a maximum amount it will pay for each service. If your doctor's actual fee is higher than that amount, and they do not accept assignment, you pay the gap. For example, if Medicare approves $100 for an office visit but your doctor charges $150 and does not accept assignment, you could owe the $50 difference on top of your normal Part B coinsurance.

Not all providers charge excess amounts. Many doctors accept assignment, meaning they agree to accept the Medicare-approved amount as payment in full (after you pay your coinsurance and deductible). Others do not accept assignment and may charge excess fees. A few providers do not participate in Medicare at all, which is a different situation.

Key Takeaways

  • Excess charges happen only when a provider does not accept Medicare assignment and charges above the Medicare-approved amount for that service.
  • Medicare limits excess charges to 15 percent above the approved amount, though some states have stricter caps.
  • You can ask your doctor before your visit whether they accept assignment and what your out-of-pocket cost will be.
  • Medigap supplemental insurance covers excess charges for most people, which is one reason many seniors buy it.
  • If a provider bills you more than the legal limit, you can report it to Medicare and request a refund.

The 15 percent limit and state variations

Federal law caps excess charges at 15 percent above the Medicare-approved amount. This means if Medicare approves $100, your doctor cannot bill you more than $115 for that service, even if their normal fee is much higher.

Some states have set their own limits that are stricter than 15 percent. Connecticut, Florida, Massachusetts, New York, Pennsylvania, and Vermont all limit excess charges to lower percentages or prohibit them entirely. If you live in one of these states, your protection may be stronger. You can contact your state's insurance commissioner's office to learn what the rule is where you live.

The 15 percent cap applies to the provider's bill to you, not to what Medicare pays. You still owe your Part B deductible and coinsurance as usual, and the excess charge sits on top of that.

How to learn about your doctor accepts assignment

Before your appointment, call your doctor's office and ask directly: "Do you accept Medicare assignment?" A yes answer means they accept the Medicare-approved amount as full payment. A no answer means they may bill you excess charges.

You can also check the Medicare Provider Lookup tool on Medicare.gov. Search for your doctor's name and location, and the tool will show whether they participate in Medicare and whether they accept assignment. This tool is not always up to date, so a phone call is more reliable.

If your doctor does not accept assignment, ask what the out-of-pocket cost will be for your specific visit or procedure. Some non-assignment providers charge excess fees on everything; others charge them only on certain services. Getting a price estimate before you go protects you from surprise bills.

What Medigap insurance covers

Most Medigap supplemental plans cover excess charges, which is one of the main reasons seniors buy them. If you have a Medigap policy, check your plan documents or call your insurance company to confirm that excess charges are covered under your plan.

The Medigap plans that cover excess charges are Plans C, D, F, G, M, and N. (Plan F is no longer sold to people newly may be able to access for Medicare after 2020, but people who had it before that date can keep it.) If you have one of these plans, your Medigap insurer will pay the excess charge after Medicare pays its share, and you will owe nothing extra.

If you have Original Medicare without Medigap, or if your Medigap plan does not cover excess charges, you are responsible for paying them yourself. This is one reason to review your coverage if you see a doctor who does not accept assignment.

What to do if you receive an excess charge bill

If you receive a bill for an excess charge that exceeds the 15 percent limit (or your state's lower limit), you can dispute it. First, contact your doctor's office and explain that the charge exceeds the legal maximum. Many billing offices will correct the bill once you point out the overage.

If the office does not correct it, you can file a complaint with Medicare. Call 1-800-MEDICARE (1-800-633-4227) and ask to report a billing violation. Have your bill, the Medicare-approved amount for that service, and your doctor's name ready. Medicare can investigate and request a refund on your behalf.

You can also report the provider to your state's insurance commissioner or state medical board. These agencies track patterns of overcharging and can take action if a provider repeatedly violates the excess charge rules.

Excess charges versus other out-of-pocket costs

It is important to understand that excess charges are separate from the costs Medicare Part B already requires you to pay. Your Part B deductible (currently $240 per year, though this changes annually) and your coinsurance (usually 20 percent of the approved amount) are not excess charges — they are your normal cost-sharing.

An excess charge is only the amount above what Medicare allows. If your doctor accepts assignment, you will never see an excess charge, even though you still owe your deductible and coinsurance. If your doctor does not accept assignment, the excess charge is added to those costs.

Some providers do not participate in Medicare at all. These are called non-participating providers, and they operate under different rules than non-assignment providers. A non-participating provider can charge you their full fee with no limit, so the stakes are higher. Always ask whether a provider participates in Medicare before your visit.

Planning ahead to avoid surprise bills

The best way to manage excess charges is to plan ahead. When you schedule an appointment, ask whether the provider accepts assignment. If they do not, ask for a cost estimate and whether your Medigap plan covers excess charges.

If you do not have Medigap and your doctor does not accept assignment, you have a choice: you can see that doctor and pay the excess charge yourself, or you can find a doctor who accepts assignment. Many areas have plenty of Medicare-accepting doctors, so you often have options.

Keep copies of all bills and explanations of benefits (EOBs) from Medicare. These documents show what Medicare approved and what you were billed. If a bill looks wrong, you have proof to dispute it.

Frequently Asked Questions

Can a doctor charge me an excess charge without telling me first?

No. Providers who do not accept assignment must tell you in writing before they treat you that they do not accept assignment and that you may be billed excess charges. If your doctor did not give you this notice, you may not owe the excess charge. Contact Medicare to report it.

Does Medicare Part D prescription coverage have excess charges?

No. Excess charges explore only to Part B services like doctor visits, tests, and outpatient procedures. Prescription drug coverage is Part D, and it works differently. Pharmacies do not charge excess amounts the way doctors do.

What if my doctor charges less than the Medicare-approved amount?

If your doctor's fee is lower than what Medicare approves, you pay only what they charge (plus your deductible and coinsurance). This is not an excess charge — it is actually a savings for you. Some doctors do this to attract patients.

Will my excess charge bill go toward my Part B deductible?

No. Your Part B deductible applies only to the Medicare-approved amount, not to excess charges. If Medicare approves $100 and your doctor charges $115, the $100 counts toward your deductible, but the $15 excess charge does not.

What happens if I do not pay an excess charge bill?

Your doctor's office may send your bill to a collection agency, which can affect your credit. However, if the excess charge violates the 15 percent limit or your state's rules, you may not legally owe it. Contact Medicare before paying to confirm whether the bill is valid.