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In Part B, you’ll pay a share of the cost of your                   

How does this work?

Medicare covers thousands of specific medical

procedures and decides how much it is willing to

pay for each of them. The amount Part B will pay

for any given procedure is called the “Medicare approved

amount.” When you pay your share, the

amount you are splitting with Part B is usually the

Medicare-approved amount. In some cases, though,

your share may be more than 20 percent of the

Medicare-approved amount.

Accepting assignment

Most doctors agree to take Medicare’s payment

of the Medicare-approved amount as full payment.

This is called “accepting assignment.” If your doctor

accepts assignment, your share is limited to 20

percent of the Medicare-approved amount.

Excess charges

Some doctors, though, do not agree to take

the Medicare-approved amount as full payment.

Medicare reduces the Medicare-approved amount

for these doctors by fi ve percent. Part B also allows

these doctors to charge you up to an additional

15 percent of the reduced Medicare-approved

amount. (This ceiling is less than 15 percent in

some states, and some states prohibit additional

charges completely.) This is called “balance billing”

or “excess charges.”

Co-insurance percentages

The cost sharing percentage is not always

20 percent. For outpatient mental health services,

for example, your co-insurance share is 50 percent.

And for some services, like fl u shots, there is no

co-insurance. Medicare pays 100 percent.

Co-payment amounts

Some cost sharing in Part B uses co-payments

instead of co-insurance. In these cases, Medicare

sets a dollar amount that you will pay.

care as you receive it. You’ll pay the same share

whether you need a little care or a lot.

What’s my share?

You’ll pay your share as a deductible, co-payments,

and co-insurance. In 2008 your Part B deductible

is $135 per year. For co-insurance, in general,

Part B pays 80 percent of the cost and you pay

the remaining 20 percent. There are some exceptions

to that rule that are discussed below.

There are no limits on your out-of-pocket spending

for cost sharing in Part B. If you have a chronic

condition that requires a lot of care, or you have a

serious illness, your cost sharing amounts may be

substantial.       
 doctor who accepts assignment.

Ellen has already satisfied her deductible.

Interpret cardiovascular stress test $175

Read diagnostic x-ray $125

Doctor’s usual and customary fee $300

Total Medicare-approved amount $220

Reduced Medicare-approved amount $209

(95% of Medicare-approved amount)

Medicare-approved amount +15% $240

of approved amount

Medicare pays 80% of approved amount $167

Ellen’s 20% co-insurance $42

Ellen’s 15% “excess charge” $31

Total Ellen pays $73

(co-insurance + excess charges)

Note: Even though this doctor doesn’t accept

assignment, Medicare still limits the excess charges

Ellen must pay to 15 percent of the Medicare approved

amount. The doctor receives $240. This is

less than the usual and customary fees of $300 but

more than the Medicare-approved amount.

Example: doctor who does accept assignment

Example: doctor who doesn’t accept assignment

Ellen visited a doctor who doesn’t accept assignment.

Ellen has already satisfi ed her deductible.

Interpret cardiovascular stress test $175

Read diagnostic x-ray $125

Doctor’s usual and customary fee $300

Total Medicare-approved amount $220

Reduced Medicare-approved amount $209

(95% of Medicare-approved amount)

Medicare-approved amount +15% $240

of approved amount

Medicare pays 80% of approved amount $167

Ellen’s 20% co-insurance $42

Ellen’s 15% “excess charge” $31

Total Ellen pays $73

(co-insurance + excess charges)

Note: Even though this doctor doesn’t accept

assignment, Medicare still limits the excess charges

Ellen must pay to 15 percent of the Medicare approved

amount. The doctor receives $240. This is

less than the usual and customary fees of $300 but

more than the Medicare-approved amount.

Example: doctor who does accept assignment

Ellen visited a doctor who accepts assignment.

Ellen has already paid her deductible for the year.

Interpret cardiovascular stress test $175

Read diagnostic x-ray $125

Doctor’s usual and customary fee $300

Total Medicare-approved amount $220

Medicare pays 80% of approved amount $176

Ellen’s 20% co-insurance $44

Total Ellen pays $44

Your share of Part B costs

continued

Medicare Part B

Show Me Guide


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