What are excess charges?
Medicare beneficiaries may have to pay Medicare Part B excess charges if the receive services form a non-participating provider. A provider that has not signed an agreement to accept assignment for all Medicare -covered services is considered "non-participating." However, these providers can still choose to accept assignment on a case by case basis.
Here's what happens if a doctor, provider, or supplier doesn't accept assignment:
The Medicare beneficiary might have to pay the entire charge at the time of service. Their
doctor, provider, or supplier is supposed to submit a claim to Medicare for any Medicare-
covered services they provide to them.
The Provider can charge them more than the Medicare-approved amount, but there's a limit
called "the limiting charge." The provider can only charge them up to 15% over the amount that non-participating providers are paid. Non-participating providers are paid 95% of the fee schedule amount.
Because the maximum limiting charge is actually only 9.25% more than participating providers can collect, unless the medical provider can collect the limiting charge balance on almost all patients, it may be more profitable for them to become a participating provider In addition, Medicare reimburses the beneficiary directly instead of sending the payment to the non-participating provider. This means that the provider must incorporate additional billing process’s.
The vast majority of providers who provide Medicare-covered services are participating providers In addition, some states ban charging Medicare Part B excess charges and require all providers to except assignment on Medicare claims. These states include Connecticut, Massachusetts, Minnesota, New York, Ohio, Pennsylvania, Rhode Island, and Vermont.