A quick explanation of Medicare Part B “Excess Charges.”
For Example; say the Medicare allowable charge for a certain visit or procedure is $100. Medicare Part B pays $80; the Medicare Supplement pays the remaining $20. If the doctor does not accept assignment, and the client has Plan D, the client pays the 15%.
Medicare states that if the doctor does not accept assignment the doctor can add 15% to the amount Medicare approves. However, Medicare reduces the amount they have approved by 5% because the doctor does not accept assignment.
Now the doctor can only add the 15% to the reduced amount.
If Medicare approves a total of $100 and the doctor does not accept assignment then Medicare reduces it by 5% so now the approved amount is $95. $95 x 115% = $109.25
The above shows that although the doctor can add an additional 15%, after Medicare reduces the amount by 5% the doctor is really only getting an additional $9.25 and not $15.
That really is not enough additional money for the doctor to risk not getting paid or have to spend money billing.
When the doctor sends a claim to Medicare, Medicare will assign a value to that claim. If the doctor agrees to “Accept Assignment” then the doctor also agrees to accept that assigned value as 100% payment for his/her services, of which Medicare pays 80% and the Medicare Supplement policy pays the remaining 20%.
If the doctor says no to assignment the claim still goes to Medicare and Medicare will “assign a value”. It makes no difference whether or not the doctor Accepts Assignment.
If the doctor does not Accept Assignment then Medicare will reduce the amount of value by 5%. The doctor can then add the 15% to the reduced amount. Either the insurance company or the individual will have to pay that additional money.
However, neither Medicare nor the Medicare Supplement will pay the doctor. Why, because he says no to assignment of the claim. The money goes to the client.
So now the doctor has to hope he gets $115 from the client after he does all the billing instead of knowing he will receive $100.
Assume the net annual premium difference between Plan F and Plan D is $275, after deducting the $135 Part B deductible that is not paid by Plan D. At 15%, that would mean that the client would have to incur bills of almost $2,000 from doctors that do not accept assignment.
Since only 1% of the doctors do not accept assignment and knowing how much Medicare limits charges, it becomes difficult for Plan F to be a money saver for any client.