His Doctor Billed 9% Over the Medicare Rate. His Share of the Bill Went Up 66%.

8 min read · Last updated July 31, 2026

In this article

• Participating, non-participating, and opted out
• Where the 15 percent actually comes from
• Why your share rises faster than the bill
• Only two Medigap plans pay this
• What to ask before the appointment
• Frequently asked questions

Warren Osei booked a dermatology procedure in February 2026 that Medicare prices at $500. He had Original Medicare, he had met his Part B deductible in January, and he expected to owe $100, which is the 20% coinsurance everyone learns first. The bill came to $546.25, Medicare reimbursed him $380, and his real cost was $166.25. Nothing had gone wrong. His dermatologist simply had not signed one form.

Participating, non-participating, and opted out

Every provider who bills Medicare sits in one of three buckets, and the label decides your bill before you walk in.

A participating provider has agreed to accept assignment on every claim. Medicare.gov states that you get the lowest cost when a provider accepts the Medicare-approved amount as payment in full, and that if a provider accepts assignment it applies to all Medicare-covered Part A and Part B services. Most providers do this.

A non-participating provider is still enrolled in Medicare but decides claim by claim. When they do not accept assignment, Medicare.gov says they can charge you more than the Medicare-approved amount, and that in many cases the charge cannot be more than 15% above the approved amount for non-participating providers. That ceiling is called the limiting charge, and the amount above the approved figure is the Part B excess charge.

A provider who has opted out is in a different category entirely. Medicare will not pay for items or services from an opted-out provider except in emergencies, and Medicare.gov notes providers opt out for a minimum of two years. There is no 15% ceiling there because there is no Medicare payment at all.

Where the 15 percent actually comes from

The 15% figure is real, but it is measured against a base most people assume is the standard Medicare rate. It is not.

Two sections of the Code of Federal Regulations, the published body of federal agency rules, do the work. 42 CFR 414.20(b) states that the fee schedule amount for a nonparticipating supplier is 95 percent of the fee schedule amount for a participating one. Then 42 CFR 414.48 states that for items or services paid under the physician fee schedule, the limiting charge is 115 percent of the fee schedule amount for nonparticipating suppliers.

The Centers for Medicare and Medicaid Services, the federal agency that runs Medicare, states the same rule in plain language in its provider booklet on the physician fee schedule. The limiting charge equals 115% of the non-participating fee schedule amount. That non-participating amount is itself equal to 95% of the Medicare Physician Fee Schedule.

Multiply the two and the answer is 1.0925. The most a non-participating provider can bill you is 109.25% of the participating rate, so the top-line bill is 9.25% above what a participating doctor would have charged, not 15% above it. On Warren’s $500 procedure the ceiling was $546.25.

That sounds like good news. It is not, and the reason is the second half of the same rule.

Why your share rises faster than the bill

Medicare pays 80% of the approved amount after your Part B deductible. On an unassigned claim the approved amount is the reduced figure, 95% of the participating rate. So Medicare pays 80% of $475 rather than 80% of $500, and the $20 it holds back does not disappear. It lands on you, on top of the excess charge.

Participating fee schedule amount	Non-par approved amount (95%)	Limiting charge you are billed (115% of that)	Medicare pays (80% of non-par)	Your cost, no assignment	Your cost if assigned
$150	$142.50	$163.88	$114.00	$49.88	$30.00
$500	$475.00	$546.25	$380.00	$166.25	$100.00
$1,200	$1,140.00	$1,311.00	$912.00	$399.00	$240.00
$3,000	$2,850.00	$3,277.50	$2,280.00	$997.50	$600.00

Look at the last two columns. The billed amount moved 9.25%, but your share moved 66.25%, and it does so at every price point because both figures scale from the same fee schedule amount. On a $3,000 procedure that is $397.50 out of your pocket for a form the office never signed.

Only two Medigap plans pay this

Medicare supplement insurance, sold as lettered Medigap plans, is where this gap gets closed, and only two letters close it. Medicare.gov’s own plan benefit comparison marks the Part B excess charge as covered under Plan F and Plan G, and not covered under Plans A, B, C, D, K, L, M, or N.

That matters most for shoppers weighing Plan G against Plan N, because Plan N is usually the cheaper premium and this is one of the benefits the discount buys out. If you live somewhere with a high concentration of non-participating specialists, the excess charge exposure belongs in that premium comparison rather than beside it. The full Plan G and Plan N cost projection runs those numbers over time, and if you are still deciding between a supplement and an Advantage plan, the structural differences come first.

State law can override the federal ceiling entirely, and Massachusetts does it through licensure rather than insurance regulation. Massachusetts General Laws Chapter 112, Section 2 attaches a condition to granting or renewing a physician’s certificate of registration. The physician must agree not to charge or collect from a Medicare beneficiary any amount above the reasonable charge determined by the Secretary of Health and Human Services. A handful of other states restrict balance billing in their own ways, so check with your state insurance department before you assume the 15% ceiling is the floor of your protection.

What to ask before the appointment

Ask one question when you book, and ask it about the specific provider rather than the practice: does this doctor accept Medicare assignment. Practices commonly have participating and non-participating physicians under the same roof, and the scheduler will know. You can also verify a provider’s status through Medicare’s care compare tool before you call.

If the answer is no and the procedure is significant, ask whether they will accept assignment on this claim. Non-participating providers decide case by case, and a direct request before the appointment is far more likely to succeed than a phone call after the bill arrives. If they decline, price the same service with a participating provider and compare the two right-hand columns of the table above.

If you already carry a Medigap policy, check your letter today rather than at the next bill. Switching later is not automatic, because outside your initial enrollment window most states let insurers underwrite you, which is covered in Medigap medical underwriting after open enrollment. And if you are still building the base picture of what Original Medicare pays for, start with what Medicare covers.

Frequently asked questions

What is a Medicare Part B excess charge?

It is the amount a non-participating provider bills above the Medicare-approved amount when they do not accept assignment. Medicare.gov caps it at 15% above the approved amount for that provider, and the ceiling is called the limiting charge.

How much can a doctor charge above the Medicare-approved amount?

Up to 115% of the non-participating approved amount under 42 CFR 414.48. Because that approved amount is itself 95% of the participating fee schedule, the ceiling works out to 109.25% of the participating rate, so about 9.25% above what a participating doctor bills.

Which Medigap plans cover Part B excess charges?

Plan F and Plan G. Medicare.gov’s plan comparison shows the Part B excess charge benefit as covered under those two letters only, and not under Plans A, B, C, D, K, L, M, or N.

Do excess charges apply if my doctor opted out of Medicare?

No, and that is worse rather than better. Medicare pays nothing for services from an opted-out provider except in emergencies, so there is no approved amount and no 15% ceiling. You pay whatever the private contract says, and providers opt out for a minimum of two years.

How do I find out if my doctor accepts Medicare assignment?

Ask the scheduler about the individual physician, not the practice, since both types often work in the same office. You can also check the provider’s status on Medicare’s care compare tool before your appointment, and ask a non-participating provider to accept assignment on your specific claim.

Warren’s $66.25 was a rounding error against a year of premiums. The number that mattered was the one he found when he checked his supplement letter that night and learned which column of the Medicare.gov chart he had been sitting in the whole time.