Part B Excess Charges: What They Are

Part B excess charges are amounts that doctors and other healthcare providers can bill you above what Medicare pays them. When a provider does not accept Medicare's approved amount as full payment, they can charge you the difference — and that difference is the excess charge.

Here is how it works in practice: Medicare sets an approved amount for each service — say $100 for an office visit. If a doctor accepts Medicare assignment, they agree to take that $100 as payment in full (after you pay your deductible and coinsurance). If a doctor does not accept assignment, they can bill you $100 plus an excess charge — perhaps $20 or $30 more. You end up paying the full approved amount plus that overage.

Not all providers charge excess amounts, and not all providers who do not accept assignment will use the full amount allowed by law. But the possibility exists, and understanding it helps you avoid surprise bills.

Key Takeaways

  • Excess charges occur when a non-participating provider bills you above Medicare's approved amount for a service.
  • Participating providers (those with "accepts Medicare assignment" in their profile) cannot charge excess amounts.
  • Federal law caps excess charges at 15 percent above Medicare's approved amount, though not all providers use the full limit.
  • You can check whether a doctor participates in Medicare and accepts assignment before your visit using the Medicare Provider Search tool.
  • Excess charges are your financial responsibility and do not count toward your Part B deductible or out-of-pocket maximum.

Participating Versus Non-Participating Providers

A participating provider has a contract with Medicare and agrees to accept Medicare's approved amount as full payment for covered services. When you see a participating provider, you pay only your deductible (if you have not met it) and your coinsurance — typically 20 percent of the approved amount. You will never see an excess charge.

A non-participating provider does not have a contract with Medicare but can still see Medicare patients. These providers can choose whether to accept assignment on a case-by-case basis. If they accept assignment for your visit, you pay the same as you would with a participating provider. If they do not accept assignment, they can charge you an excess amount on top of what Medicare pays.

You can find out whether a doctor participates in Medicare by using the Medicare Provider Search tool on Medicare.gov. Search by name or location, and the results will show you whether the provider is participating, non-participating, or opted out of Medicare entirely.

The 15 Percent Legal Limit

Federal law sets a ceiling on excess charges: a non-participating provider cannot charge more than 15 percent above Medicare's approved amount. So if Medicare approves $100 for a service, the maximum excess charge is $15, bringing your total bill to $115.

This cap applies to most doctors, nurse practitioners, physician assistants, and other healthcare providers who bill Medicare. However, some providers — such as those who have opted out of Medicare entirely — operate under different rules and are not bound by this limit.

Even though 15 percent is the legal maximum, many non-participating providers charge less or nothing at all. The cap is a ceiling, not a standard practice.

How Excess Charges Affect Your Out-of-Pocket Costs

Excess charges are separate from your Part B deductible and coinsurance. They do not count toward your annual Part B deductible ($240 in 2024, though this amount changes yearly), and they do not count toward your out-of-pocket maximum under Original Medicare.

This means excess charges are an additional cost on top of what you would normally pay. If you see a non-participating provider who charges the full 15 percent excess, you could end up paying significantly more than you would with a participating provider for the same service.

For example: a participating provider charges you 20 percent coinsurance on a $100 approved amount ($20). A non-participating provider charging the full excess would bill you 20 percent coinsurance ($20) plus 15 percent excess ($15), totaling $35 for the same service.

How to Avoid Excess Charges

The simplest way to avoid excess charges is to see participating providers whenever possible. Before scheduling an appointment, call the office and ask whether the provider accepts Medicare assignment. You can also check the Medicare Provider Search tool online.

If you must see a non-participating provider, ask them directly whether they accept assignment for your visit. Get the answer in writing or note the name of the person who told you. If they say they do not accept assignment, ask what their excess charge will be before the visit so you know what to expect.

If you receive a bill with an excess charge you believe is incorrect or excessive, you can file a complaint with your state's insurance commissioner or with Medicare. Keep copies of all bills and correspondence.

Excess Charges and Supplemental Insurance

If you have a Medigap (supplemental insurance) policy, check what your plan covers regarding excess charges. Some Medigap plans cover excess charges, while others do not. Plan F and Plan G, for example, cover excess charges under certain conditions, though Plan F is no longer sold to people newly may be able to access for Medicare.

Review your Medigap policy documents or call your insurance company to understand what you are covered for. This information can help you decide whether to see a non-participating provider or wait to see a participating one.

Opting-Out Providers and Balance Billing

Some providers opt out of Medicare entirely, meaning they do not bill Medicare at all and do not accept Medicare patients under the standard rules. If you see an opted-out provider, you will sign a contract agreeing to pay their full fee out of pocket. This is different from excess charges — it is a separate financial arrangement.

Opted-out providers are not bound by the 15 percent excess charge limit. They can charge whatever they want. Original Medicare will not pay anything toward their services, and your Medigap policy typically will not cover the bill either.

You can find out whether a provider has opted out by calling their office or checking Medicare.gov. If a provider has opted out, you should understand the full cost before proceeding with care.

Frequently Asked Questions

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

No. Providers must inform you in advance if they do not accept assignment and plan to charge an excess amount. If you receive a surprise excess charge bill, contact the provider's office and ask for an explanation. You may be able to dispute the charge.

Do excess charges count toward my Part B deductible?

No. Excess charges are separate from your deductible and coinsurance. They do not reduce the amount you still owe toward your annual deductible, and they do not count as out-of-pocket spending under Original Medicare.

What should I do if I receive a bill with an excess charge I think is wrong?

Contact the provider's billing office first and ask for an itemized bill explaining the charges. If you believe the excess charge exceeds the 15 percent legal limit, file a complaint with your state's insurance commissioner or contact Medicare directly for guidance.

Will my Medigap plan pay excess charges?

It depends on your plan. Some Medigap plans cover excess charges, while others do not. Check your policy documents or call your insurance company to find out what your specific plan covers.

Is there a difference between excess charges and balance billing?

Yes. Excess charges are the 15 percent overage that non-participating providers can legally charge above Medicare's approved amount. Balance billing is a broader term that can include excess charges but also refers to any amount a provider bills you beyond what Medicare pays and what you owe in coinsurance.