Video: Excess Charges and Medicare Supplements

Video Transcript

Sylvia Gordon: What is Medicare excess charges? Those of you that are interested in the new Medicare Supplement Plan N might be surprised to learn that it does not cover any excess charge. Excess is what a doctor can charge a client above what Medicare is willing to pay.

So, for example, Medicare has a schedule of what they will pay for every procedure. They pay so much for a hip, so much for a rotator cuff — it's extremely low.

Let's say you need a hip replacement, and Medicare is only willing to pay $1,000. If your doctor accepts Medicare assignments, then that is the most your doctor can charge. And it's about 85 percent of doctors across the nation that accept Medicare assignment. If they do, it has to be posted in their waiting room, and they cannot charge you above what Medicare pays.

Now, since Medicare is cutting reimbursements and inflation continues to go up, more and more doctors are not willing to accept Medicare's low payments. If they don't, they can charge you excess. It can only be 15 percent above what Medicare is willing to reimburse them. So they can get 15 percent extra dollars in their pocket.

So if your surgery was $1,000 — Medicare was only willing to pay a thousand — that doctor can get an extra $150 from you — not from your insurance company, but from you.

So if you have a Medicare supplement plan that doesn't pay all of your excess, you have to be aware that you could be on the hook for another 15 percent. Like I said, most doctors across the nation accept Medicare assignment, but it's becoming more popular that they won't.

When do you find doctors that don't accept assignment? It's generally the doctors that you don't meet. Your anesthesiologist — that guy that comes in after your surgeon, puts you out and you never talk to the guy, you didn't choose him, you might not even know his name. Those are very high-priced people, and they like to get as much money as they can.

So that's one thing you need to check with your doctor. If you have a plan that charges excess, check with your doctor and say, "Hey, make sure everybody that you refer me to, everybody that's gonna be working on my case, also accepts Medicare assignment," because you do not want any excess charges.

If you have any questions, call us at Gordon Marketing. We'd love to help.