What Are Medicare Part B Excess Charges?

What Are Medicare Part B Excess Charges?

Medicare Part B premiums are required for most people who are eligible for Social Security or Railroad Retirement benefits and are not covered under another group health plan that provides Medicare benefits.

Medicare Part B pays 80% of the cost of certain health services, such as physician services, outpatient hospital services, and medical supplies, but not prescriptions. Part B requires a monthly premium that is paid to the insurance company, but the premium is deducted from Social Security benefits or paid by those who are not receiving Social Security benefits.

For most people, there is a copayment (or coinsurance) for most Medicare Part B benefits. The current monthly premium is $121.80 in 2015. Most people who are eligible for Part B have to pay a deductible of $147 per year. This deductible does not apply to preventive services (such as most blood tests) or to services received under the “Welcome to Medicare” physical.

The amount of the deductible for inpatient hospital services starts at $1,260 in 2015, but could be lower for those who are eligible for premium-free Part A benefits.

A percentage of the Medicare Part B premium (generally 25% of the total) is paid for by the federal government “as the beneficiary's contribution to the cost of the premium.”

You can find more information about the Medicare Part B premium and deductibles at Medicare.gov.

What are Part B excess charges?

Medicare Part B excess charges occur when a doctor or other health care provider bills Medicare for more than the allowed Medicare Part B payment for a service.

If the doctor or other health care provider bills Medicare for more than the allowed Medicare Part B payment, the provider must pay the difference to Medicare.

If you have questions about health care bills, you should call the provider's billing office and request an itemized bill. The itemized bill will show you exactly what the doctor or other health care provider has charged for the service.

You can compare the itemized bill to the allowed Medicare Part B payment. If the provider charged more than the Medicare Part B payment, the provider will send you a bill for the difference between the provider's bill and the Medicare Part B payment.

You can also compare the itemized bill to the Medicare website's database of allowed Medicare Part B payments. If the provider charged more than the Medicare Part B payment, you can let the provider know that the provider's bill is not legal.

If the bill is not legal, the provider is not allowed to submit that bill to Medicare. Medicare will not pay the bill and will not send you a bill for the difference between the provider's bill and the Medicare Part B payment.

How do you know if the bill is not legal?

The Medicare website has a database of allowed Medicare Part B payments for each service.

The provider's bill should match the Medicare Part B payment.

Medicare Part B allows a small payment to physicians and other health care providers for the “professional component” of their services. The professional component is limited to 15% of the Medicare Part B payment.

After deducting the professional component of the Medicare Part B payment, the provider can only bill Medicare for 80% of the Medicare Part B payment. The provider can bill the remaining 20% of the Medicare Part B payment, but the provider must pay to Medicare the difference between the Medicare Part B payment and the amount the provider billed.

What can you do if the provider does not pay the difference to Medicare?

The provider must pay the difference between the provider's bill and the Medicare Part B payment.

The provider cannot submit the bill to Medicare for payment.

If the provider bills you, the provider must pay to you, rather than to Medicare, the difference between the provider's bill and the Medicare Part B payment.

For example, suppose that the Medicare Part B payment for a medical procedure is $100. The provider bills you $200. You do not pay the $200 bill, and the provider does not submit the bill to Medicare.

You have the option of suing the doctor or other health care provider.

You can also contact your local Area Agency on Aging to determine if the agency has a consumer assistance program that helps with health care cost problems.

These are serious issues that can have serious consequences for the doctor or other health care provider. You should contact a lawyer to determine what your options are.

Updated July 1, 2015 and originally published in February 2010.

If you found this article helpful, you might also want to read “What is Medicare Advantage?

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