What are Medicare limiting charges?
A Medicare limiting charge is the maximum amount—up to 15% more than the Medicare-approved amount—that a non-participating provider can legally bill you for a covered service when they do not accept assignment.
How the Limiting Charge Works
- Non-Participating Status: This cap applies only to non-participating providers (doctors who accept Medicare but choose not to accept assignment for all services, meaning they handle claims case-by-case or unassigned).
- The Calculation: Medicare pays non-participating providers 95% of the standard fee schedule. The limiting charge caps total billing at 115% of that reduced non-participating rate (which equals roughly 109.25% of the standard participating fee schedule).
- Consumer Protection: Providers are barred by federal law from charging more than this limit, shielding you from runaway medical bills.
Key Exceptions
- Opt-Out Providers: Doctors who completely opt out of Medicare have no billing caps and use private contracts, meaning Medicare pays nothing.
- Supplies and Equipment: Limiting charges do not apply to medical equipment or supplies.
- Participating Providers: Doctors who take assignment accept the Medicare-approved amount as payment in full and cannot use excess charges. You can check a provider's status through the official Medicare Provider Search.
What is the Medicare limiting charge rule?
The Medicare limiting charge rule is a federal cap on the maximum amount a non-participating provider can bill a Medicare Part B beneficiary for a covered service when they do not accept assignment.
📌 How the Limit Works
- Limit is 115% of the non-participating Medicare-approved fee schedule amount.
- Non-participating Medicare-approved rate is typically 95% of a participating doctor's fee.
- Actual extra cost to you is up to 109.25% of standard Medicare rates.
- Applies only to specific Part B medical services and professional fees.
- Excludes medical equipment and supplies.
- Excludes opt-out providers who use private contracts with no fee caps.
📊 Provider Classification Comparison
| Provider Type | Accepts Assignment? | Maximum Extra Billing |
|---|---|---|
| Participating | Yes | $0 (Payment in full) |
| Non-Participating | No (Case-by-case) | Up to 15% above approved rate |
| Opt-Out | Rejects Medicare entirely | No federal limit (Private billing) |
⚠️ State-Level Variations
- Lower limits: New York caps non-participating charges at 5% instead of 15% for most services.
- Zero excess charges: Seven states (CT, MA, MN, OH, PA, RI, VT) completely ban excess charges by law.
What are the 5 treatments that Medicare won't cover?
Original Medicare does not cover several major healthcare services, most notably routine dental care, hearing aids, routine vision care, long-term custodial care, and overseas medical care.
Major Uncovered Services
- Routine Dental Care: Original Medicare does not pay for routine cleanings, fillings, tooth extractions, root canals, or dentures, except in rare surgical circumstances related to specific medical treatments.
- Hearing Aids: Routine hearing tests, hearing aid fittings, and the devices themselves are completely excluded under traditional Medicare.
- Routine Vision Care: Regular eye exams for prescription glasses, as well as contact lenses and eyeglasses, are not covered (aside from standard lenses after cataract surgery).
- Long-Term Care: Ongoing custodial care—such as daily help with bathing, dressing, eating, or long-term nursing home stays—is not covered, as Medicare only pays for short-term skilled nursing rehabilitation.
- Care Outside the United States: Medical treatments and services received while traveling internationally are generally not covered.
Should I worry about Medicare excess charges?
You do not need to worry very much about Medicare excess charges, because fewer than 2% of doctors nationwide are non-participating providers who are legally allowed to bill them.
What Are Excess Charges?
- Definition: An extra fee—up to 15% above the Medicare-approved amount—that a doctor can charge if they accept Medicare patients but do not accept "Medicare assignment" (meaning they don't take Medicare's set price as payment in full).
- Where they apply: Only to Medicare Part B services like doctor visits and outpatient care, not hospital stays under Part A.
- State protections: Eight states ban these charges entirely: Connecticut, Massachusetts, Minnesota, New York, Ohio, Pennsylvania, Rhode Island, and Vermont.
How to Prevent Excess Charges
- Ask the right question: Always ask your clinic, "Do you accept Medicare assignment?" Do not just ask if they "take Medicare," because a doctor can take Medicare without accepting assignment.
- Check your Medigap plan: If you have a Medicare Supplement (Medigap) plan like Plan G or Plan F, these excess charges are completely covered. If you have Plan N, you are responsible for paying any excess charges yourself, though they remain rare.
What is a Medicare facility limiting charge?
A facility limiting charge is the absolute highest amount a non-participating Medicare provider can legally bill a patient for a service performed in a facility setting (such as a hospital, ambulatory surgical center, or nursing home).
How It Works
- Non-Participating Providers: This cap only applies to doctors and suppliers who take Medicare but do not "accept assignment" (meaning they don't take Medicare's approved amount as payment in full).
- The 115% Rule: Medicare reduces its allowed payment for non-participating providers to 95% of the standard fee schedule. The limiting charge is capped at 115% of that reduced (non-par) amount.
- Facility vs. Non-Facility: Services done in a facility have lower overhead costs for the doctor (since the facility provides the room and staff), so Medicare's baseline allowed amount—and the resulting limiting charge—is lower than it would be in a private office setting.
What Is Balance Billing And The Limiting Charge In Medicare? - Medicare Made Simple Guide
9 related questions found
Can I deduct Medicare premiums taken out of my social security check?
Yes, you can deduct Medicare premiums withheld from your Social Security check on your federal income taxes, provided you itemize your deductions and your total medical expenses exceed 7.5% of your adjusted gross income (AGI).
How the Deduction Works
- Itemizing required: To claim the deduction, you must file Form 1040 and itemize your deductions on Schedule A.
- The 7.5% threshold: You can only deduct the portion of your total qualified medical expenses (including Medicare Parts A, B, C, D, and Medigap premiums, plus out-of-pocket costs like copays and prescription drugs) that goes over 7.5% of your AGI.
- Self-employed exception: If you are self-employed and show a net profit, you may qualify for an above-the-line deduction for health insurance premiums without needing to itemize.
Finding Your Total Premiums
- Form SSA-1099: The Social Security Administration sends you an annual Form SSA-1099. This document lists the exact total of your Medicare premiums that were withheld from your checks over the prior year.
What is the big mistake people make with Medicare?
The single biggest and most costly mistake people make with Medicare is missing enrollment deadlines, leading to permanent late-enrollment penalties and gaps in coverage.
Missing Enrollment Deadlines
- Initial Enrollment Period (IEP): This window lasts for seven months. It starts three months before the month you turn 65, includes your birthday month, and ends three months after.
- Late Penalties: Failing to sign up for Part B or Part D on time can trigger permanent monthly or yearly financial penalties added to your premiums.
- Delayed Enrollment Confusion: Many people wrongly assume they can delay Medicare past age 65 just because they have health coverage like COBRA, a marketplace plan, or small-employer insurance.
Other Costly Medicare Mistakes
- Ignoring Annual Changes: Sticking with automatic renewal without reading the Annual Notice of Change (ANOC) can result in unexpected costs, as drug lists and doctor networks shift every year.
- Choosing Solely by Low Premiums: Picking a plan based only on a low monthly cost while ignoring total out-of-pocket expenses like deductibles, copays, and coinsurance.
- Missing the Medigap Window: Forgetting to apply for a Medigap (Medicare Supplement) policy during your open enrollment window. After this six-month period, insurers can use medical underwriting to charge more or deny coverage.
- Skipping Financial Assistance: Overlooking programs like Medicare Savings Programs or Part D Extra Help that assist with out-of-pocket medical and prescription expenses.
Does Medicare pay 100% of your medical bills?
Original Medicare does not pay 100% of your medical bills.
Out-of-Pocket Costs
- Deductibles: You must pay a yearly amount out-of-pocket before Medicare starts paying.
- Coinsurance: For most doctor and outpatient services under Part B, Medicare pays 80% and you pay 20% of the approved amount.
- Copayments: You may pay fixed amounts for certain services or prescription drugs (under Part D).
- No Maximum Limit: Original Medicare has no yearly limit on out-of-pocket costs.
What is Not Covered
- Prescription drugs: Original Medicare (Parts A and B) does not cover everyday retail medications.
- Routine care: It excludes routine dental care, eyeglasses, hearing aids, and long-term (custodial) care.
How to Get More Coverage
- Medigap: You can buy a private Medicare Supplement Insurance policy to help pay remaining costs like coinsurance and deductibles.
- Medicare Advantage: You can join a private Part C plan that includes a yearly limit on your out-of-pocket spending. You can review official plan options directly through the Medicare Plan Finder tool.
Is Medicare Part D worth it for seniors?
Medicare Part D is generally worth it for seniors, especially with the annual out-of-pocket spending cap set at $2,100 and insulin costs capped at $35 per month.
Why Part D is Worth It
- Financial Protection: Out-of-pocket drug costs are limited. Once you hit the $2,100 limit, you pay $0 for covered drugs for the rest of the year.
- Cost Spreading: The Medicare Prescription Payment Plan allows you to break high pharmacy costs into smaller monthly payments over the calendar year.
- Avoid Penalties: Going 63 days or more without creditable prescription drug coverage results in a permanent late-enrollment penalty added to your monthly premium.
When It Might Not Seem Worth It
- Healthy Seniors: If you take no prescription drugs, paying a monthly premium (averaging around $34.50 to $36) feels like an unneeded expense.
- The Penalty Risk: Even if you take no medications now, dropping or skipping coverage risks a lifelong penalty if your health needs change later.
- Low-Income Options: Seniors with limited income and resources may qualify for the National Council on Aging (NCOA) Extra Help program, which lowers or eliminates premiums and deductibles.
What is no longer covered by Medicare?
Original Medicare Original Medicare Not Covered and Medicare Advantage plans have strict rules regarding items and services that are excluded from coverage.
Expiring & Restrictive Coverage Changes
- Broad Telehealth Flexibilities: Pandemic-era telehealth waivers expired on January 31, 2026 Medicare telehealth flexibilities expire. Beneficiaries generally must be located in a medical facility and in a rural area to receive covered telehealth services, except for behavioral health care Medicare Will No Longer Cover This Popular Service Starting Jan. 31.
- Medicare Advantage Non-Qualifying Supplemental Items: CMS rules restrict Medicare Advantage plans from covering non-health items previously allowed for chronically ill enrollees, including alcohol, cannabis, tobacco, unhealthy foods, cosmetic procedures (facelifts), funeral costs, and life or hospital indemnity insurance Medicare Advantage Can No Longer Cover These Items in 2026.
Standard Exclusions in Original Medicare
- Routine Dental Care: Cleanings, fillings, tooth extractions, and dentures What Medicare will not cover in 2026 | The American Legion.
- Routine Vision Care: Eye exams for prescription glasses, contact lenses, or eyeglasses (except following cataract surgery) What Medicare will not cover in 2026 | The American Legion.
- Hearing Care: Routine hearing exams and hearing aids What Medicare will not cover in 2026 | The American Legion.
- Long-Term Custodial Care: Extended nursing home care or assisted living that only involves personal help with daily living activities What Does Medicare Not Cover? Eight Things You Should Know.
- Routine Foot Care: Cutting corns or calluses and basic toenail clipping What Medicare will not cover in 2026 | The American Legion.
- Overseas Care: Medical treatment received outside the United States What Medicare will not cover in 2026 | The American Legion, with rare exceptions.