Dealing with The Limiting Charge in Medicare
Part 3, Chapter 9: Medicare and Medicare Related Programs: Medicare Page 3
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That 115% rule is known as the limiting charge. The additional 15% above the Medicare allowable amount is referred to as the excess charge. A simple way to make sense of the limiting charge is to view it in terms of dollars rather than in terms of percentages. From that point of view, the limiting charge permits a provider to charge a maximum of an additional $15 -- the excess charge -- for each $100 of the Medicare allowable amount.
For example, let's assume that the Medicare allowable amount for a specific treatment provided by a doctor is $200. Once the beneficiary's yearly deductible has been met, a doctor who accepts assignment -- a participating provider -- can generally bill the Medicare beneficiary only for the co-insurance, regardless of the standard fee that might be charged to a patient who was not covered by Medicare. However, if the doctor does not accept assignment -- a nonparticipating provider -- he can charge the patient for the co-insurance plus an additional $30 (15% of the allowable amount of $200).
Although the Medicare system works quite well in the majority of cases, at times it can be complex and confusing. In addition, communication between Medicare and Medicare beneficiaries sometimes leaves a great deal to be desired. As a result, it can sometimes be difficult to solve problems that do occur.
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