Avoid the sticker shock of Medicare billing

Published by Medicare Made Clear®

If you’re scheduled for surgery or a medical procedure, learning how Medicare billing works may help prevent a serious case of sticker shock later.

It’s important to know that not all doctors bill the same way. Some doctors accept Medicare assignment and agree to the rates Medicare sets and takes those amounts as full payment. Other doctors participate in the Medicare program but do not accept Medicare assignment. Some other doctors don’t accept Medicare at all. They can charge whatever they want.

In each situation, costs will vary and how much you will be financially responsible for changes as well.

Accepting Medicare assignment

Doctors who accept Medicare assignment agree to be paid by Medicare. They submit the claim to Medicare and agree to accept the Medicare-approved dollar amount for a procedure. They can't charge you more than that amount.

You may still be responsible for deductibles, copays and coinsurance, but your share is limited by what Medicare pays.

For example, Medicare agrees to pay a doctor $500. The doctor agrees to accept $500 as full payment. You will likely be charged coinsurance, often 20 percent. So you would be responsible for $100.

Not accepting assignment

Some doctors participate in the Medicare program but do not agree to accept Medicare assignment.

Medicare pays these doctors a slightly lower rate. But under the rules of Medicare Part B, doctors in this situation are allowed to charge you a maximum of 15 percent more than the amount non-participating providers are paid for certain Medicare-covered services. The additional amount would be the responsibility of the patient.1

For example, if Medicare pays a doctor who accepts Medicare Assignment $500, it could pay a doctor who doesn't accept assignment $475. Then that doctor could charge you $71.25. This is called an excess charge or balance billing. This amount is added to any coinsurance charge, which is often 20 percent. In our example, you would be responsible for $166.25 or 35 percent of $475.

Ask your doctor beforehand

The best way to find out whether or not your doctor accepts Medicare is to call the doctor’s office directly. Call and ask them if they accept Medicare’s payment as payment in full. It’s also a good idea to ask how you will be billed.

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