Where Medicare Advantage plans have the question of balance billing, Medicare Supplements have excess charges. You’ve likely noticed in the comparison chartsÂ for the different types of Medicare Supplement plans that plans F and G cover what they call “Part B excess charges.”
For some clients, the idea of these unspecified excess charges can be intimidating, as they bring with them visions of crushing medical bills and the attendant financial ramifications. Even for some agents, it’s difficult to feel comfortable quantifying what excess charges are, how much they can be, and how concerned about them a client should be.
The important things to remember are as follows:
– Medicare participating providers are prohibited from billing Medicare beneficiaries for anything outside of their co-insurance or copayment, as determined by standard Medicare coverage rates and whatever Medicare Supplement plan the member may have.
– Medicare Supplement plans F and G cover excess charges, so members with either plan should never run into excess charges directly, even when seeing non-participating providers.
– 96% of providers who offer Medicare-covered services are participating providers. This means that Medicare beneficiaries are statistically unlikely to ever encounter a situation where excess charges are even potentially an issue. You can help members look up providers they may want to see by checking Physician Compare on Medicare.gov
– Medicare non-participating providers can choose on a per-service basis whether or not to accept assignment, so a member who uses a non-participating provider may not necessarily see excess charges every time.
– If a non-participating provider is going to bill for excess charges, the member will typically be required to pay for the entire service up front. The provider will then submit a claim to Medicare and the member will receive a reimbursement check for the amount covered by Medicare. The end cost to the member will likely be small, but for some people having to pay up front for the service and wait for reimbursement may be a concern.
– Excess charges themselves are limited by Medicare. Non-participating providers who are not accepting assignment for a given service can charge up to the Medicare limiting charge of 115% of the non-participating provider reimbursement rate, which is 95% of the Medicare fee schedule amount. This works out to 109.25% of the Medicare fee schedule amount, which means the member would be liable for 9.25% of the Medicare amount, in addition to whatever usual cost-sharing may apply. For example, if the Medicare fee schedule amount for a particular office visit is $175, a non-participating provider can only be reimbursed by Medicare up to $166.25. This makes the Medicare limiting charge 115% of $166.25, or $191.19. A member with a Medicare Supplement plan that covers the cost-sharing for Part B services but does not cover excess charges (Plan A, B, C, D, or M) would be liable to pay the difference between the Medicare limiting charge and the Medicare fee schedule amount, which would be $16.19. Beneficiaries with Medicare Supplement plans that have some share of cost for Part B services and do not cover excess charges (Plan K, L, or N) would pay whatever their usual coinsurance or copayment amount is, plus the excess charges of $16.19. Beneficiaries with Plan F or G would pay nothing.
– Excess charges only apply to services rendered by non-participating providers, not to services from providers who have completely opted-out of Medicare. Providers who have opted-out enter into a private contract with the individuals they treat, regardless of their Medicare eligibility, and patients must be notified before services are provided that they will be liable for the total cost of any services provided and informed that they may be able to have the same services covered by seeing a different provider.
In many cases, the potential excess charges will be less than the premium difference between a plan that would cover them and one that wouldn’t. For clients whose doctors are Medicare participating, there’s likely minimal if any benefit to a plan that protects them from potential excess charges. For clients who have a Medicare Supplement plan primarily because of the flexibility it affords them in seeing whatever doctor they want, excess charges may be a more significant consideration, particularly if there’s a provider they would like to see consistently who is non-participating. Understanding the economics of excess charges and how to estimate them can help you and your clients decide how to balance premium cost and the cost of getting care to find a solution that works.