Most doctors accept Medicare assignment. This means they have agreed to provide a covered service for the amount of money Medicare says it will pay.
The doctor’s office is not allowed to charge more than this approved amount if they are a Medicare participating provider.
Rarely, you will find a doctor who sometimes but not always accepts Medicare assignment. These doctors, called "non-participating providers", are allowed to charge their patients more than what Medicare says it will pay, up to a maximum of 15%.
Here is an example:
You feel ill and visit your doctor for a checkup. The Medicare fee schedule pays $100 for a doctor checkup. Your doctor prefers to be paid $200 for every office. He is a non-participating provider, meaning that he only accepts Medicare assignment on a case-by-case basis.
In this example, your doctor decides to accept Medicare assignment for your care. Medicare pays him $100 for your checkup - $100 less than what he normally charges his patients.
Your doctor is allowed to send you a bill for $15 (that is 15% of the $100 Medicare paid your doctor). Those 15 dollars represent the "Part B excess charge" and the method of collecting that money is known as "balance billing".
After all bills have been settled, your doctor will have collected $115 ($100 from Medicare and an extra $15 from you). He must forgo the other $75.
Unless you have a Medicare supplement insurance plan or certain kinds of state financial assistance, you will be responsible for paying 20% of the amount Medicare paid your doctor ($100) in addition to 100% of the excess charge ($15).
Certain states do not allow a doctor to balance bill a Medicare patient if she lives and receives care in their state. They include Connecticut, Massachusetts, Minnesota, New York, Ohio, Pennsylvania, Rhode Island and Vermont.
Certain Medicare supplement insurance plans (like Plan F and Plan G) cover the enrollee's Part B excess charges, but remember that most doctors are participating providers and will not charge you a Part B excess.
If you have a Medicare Advantage plan and get care from a network doctor, your doctor must accept the amount specified by the insurance company and nothing else.
Let's revisit the previous example of the doctor who prefers to be paid $200 for a checkup. Let's also assume he is in your plan's network and that your insurance company pays $105 for checkups.
Although you may be subject to a deductible or co-payment, your doctor will only be paid $105. He must forgo the other $95.
Remember: Most Medicare Advantage plans have a doctor network. If you receive non-emergency care from an out of network provider, you may be responsible for paying the entire cost of that care.