Just when you think you have your expenses figured out under Original Medicare, something pops up to throw a wrench in your calculations. If you’ve ever been billed for excess charges, you know how frustrating they can be.
Although eight states have taken steps to prohibit excess charges, Texas isn’t one of them—at least not yet. Here’s what you need to know about Medicare excess charges in Texas.
What are Medicare excess charges?
Have you ever looked at a medical bill after Medicare pays its portion? There’s the fee the provider actually charges for the service and the amount Medicare will pay for it, which is usually well below the provider’s usual fee. This is Medicare’s “allowable charge” for your care.
Providers who accept assignment agree to consider Medicare’s allowable charge as payment in full. Here’s how it works: You see your doctor, who sends Medicare a bill for $200 for the visit. Medicare’s allowable charge might be $35 for the exam, so Part B pays 80%, or $28, and you pay 20%, or $7, assuming you met your deductible. The doctor writes off the other $165 of your bill and your account is paid in full.
Non-participating providers don’t have to accept Medicare’s allowable charge as payment in full, but the government limits how much they can charge above Medicare reimbursement rates. Currently, the amount is 15% of Medicare’s allowable charge. In other words, if you saw a non-participating doctor in the example above, you would owe $13.25 for the visit: $7 for your 20% and $5.25 in excess charges (15% of $35). Excess charges are based on the Medicare reimbursement rate, not your share of the cost.
The good news is that in Texas, fewer than 10% of physicians who accept Medicare don’t accept assignment.
One thing to keep in mind, however, is that some doctors opt out of the Medicare program entirely. These doctors aren’t bound by Medicare excess charges rules—if you see a doctor who has opted out, the doctor can charge whatever he wants and you are responsible for the entire bill. Doctors who opt out must notify you in writing, and you must sign a private contract accepting financial responsibility before you get care. Fortunately, in Texas, doctors who opt out are few and far between, so you likely won’t have to worry about it.
Do Texas Medigap plans cover excess charges?
The short answer is, “it depends.” Texas Medicare Supplement Plans are sold by private insurance companies, but Medigap plan benefits are standardized by the federal government. In other words, if you buy Plan G from one company, it will have essentially the same benefits as Plan G from any other company licensed to sell plans in Texas.
Currently, only Plan F and Plan G cover 100% of your Part B excess charges. But if you aren’t eligible for Medicare until January 1, 2020, or later, only Plan G will be available. When Congress passed the Medicare Access and CHIP Reauthorization Act (MACRA) in 2015, they phased out Medigap plans that paid the Part B deductible as of December 31, 2019. Plan F is one of MACRA’s casualties, along with Plan C.
However, if you are eligible for Medicare prior to January 1, 2020, but haven’t officially enrolled, you may still be able to buy Plan F for 100% coverage of your Part B deductible and Medicare excess charges.
After December 31, 2019, Plan G will be the most comprehensive Medigap plan available in Texas. Plan G covers 100% of your Part A hospital, hospice, and skilled nursing facility coinsurance, your Part A deductible, your Part B coinsurance and excess charges, and provides emergency medical care if you’re traveling overseas (up to plan limits, of course). It’s the closest thing you can get to first-dollar coverage once Plan F is phased out.
How can I avoid excess charges in Texas?
The easiest way is to always ask if your doctor accepts assignment before you are seen. Ask to speak to someone in the billing department when you make your appointment just to be sure—sometimes financial policy changes aren’t communicated efficiently to the front desk staff.
If your doctor doesn’t accept assignment as a rule, he or she may make exceptions for certain services. For example, a doctor might accept assignment for office visits, but not for surgical procedures. If you decide to see a doctor that doesn’t accept assignment, it never hurts to ask if there are exceptions.
Unfortunately, there is no out-of-pocket limit on your expenses under Original Medicare. If you have a serious illness or injury, you could wind up with thousands of dollars in out-of-pocket costs. If you’re worried about excess charges and other Texas Medicare expenses, get in touch with a Texas Medicare insurance broker to discuss your options.