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
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