Medicare Excess Charges relate to Medicare "Part B" coverage--which is for Medical services.
If you are on Medicare and happen to go to a doctor who does not accept Medicare assignment (or accepts Medicare’s full payment), the doctor may be allowed to have an "excess charge". This excess charge would be an amount above and beyond what Medicare approves for a specific procedure / doctor office visit.
Medicare utilizes a system of what they deem reasonable and customary fees or every procedure and what it should cost to perform. For example, Medicare might say a specific test will cost $400. If you were to go to a doctor, and have that specific test performed, Medicare will pay a maximum of $400, because that is what they deem reasonable and customary.
If the doctor decided the $400 payment is not enough and charges an additional amount over the $400 this would be called the excess. However, the doctor is limited to charging an additional 15% over and above what Medicare approves. For example, a test from your doctor based on the Medicare approved amount costs $400. The doctor might be able to charge 15% higher or $60 additional to the original $400 already approved by Medicare. In this case, the total allowable charges would be $460.
The following states do NOT allow any excess charges due to the MOM Law (Medicare Overcharge Measure): Connecticut, Massachusetts, Minnesota, New York, Ohio, Pennsylvania, Rhode Island and Vermont.
If you purchase Medicare Supplement Insurance (Medigap policy), you can eliminate the cost of any "excess charges" that you may be faced with. However, not all Medicare Supplement Plans will provide
Medicare excess charge coverage
. Currently, only Medicare Supplement Plans F & Plan G will provide excess coverage. Both Plan F & G will pay 100% of any excess charges you may incur.
If you purchase a Medicare Supplement Plan that does not provide excess charge coverage, you can still shield against ever paying any excess charges as long as you simply ask your doctor before you go to him "Do you accept Medicare assignment?". As long as your doctors says they accept Medicare assignment, you won’t have a Medicare excess charge.