What Is a Non-Facility Limiting Charge?

A non-facility limiting charge represents a specific financial boundary within Medicare Part B. Understanding this charge helps Medicare beneficiaries assess their healthcare costs and financial responsibilities.

Understanding Non-Participating Providers and the Limiting Charge

A “non-participating provider” is a healthcare professional who has not formally agreed to accept Medicare’s approved amount as full payment. These providers can still treat Medicare beneficiaries. They can accept assignment on a case-by-case basis, but are not obligated to do so for every service.

The “limiting charge” is the maximum amount a non-participating provider can legally charge a Medicare beneficiary for a covered service. The limiting charge is calculated as 115% of the Medicare-approved amount for that service, as established by federal law 42 U.S.C. § 1395u.

This charge applies to services rendered in non-facility settings. Examples include a doctor’s private office or a patient’s home. It does not apply to services provided in institutional settings like hospitals.

Your Financial Responsibility with a Limiting Charge

When a Medicare beneficiary receives services from a non-participating provider, their financial responsibility differs from seeing a participating provider. Medicare pays 80% of the Medicare-approved amount for the covered service. This payment goes directly to the beneficiary or, if the provider chooses to submit a claim, to the provider.

The beneficiary is responsible for the remaining 20% coinsurance of the Medicare-approved amount. Additionally, the beneficiary must pay the difference between the Medicare-approved amount and the limiting charge. This difference amounts to an extra 15% of the Medicare-approved amount. For example, if the Medicare-approved amount for a service is $100, the limiting charge would be $115. Medicare would pay $80, and the beneficiary would be responsible for $20 plus the $15 difference, totaling $35 out-of-pocket.

This contrasts with “accepting assignment,” where a participating provider agrees to accept the Medicare-approved amount as full payment. In such cases, the beneficiary is only responsible for the 20% coinsurance after meeting their Part B deductible. The limiting charge therefore directly impacts a beneficiary’s out-of-pocket costs by allowing non-participating providers to charge up to 15% more than the Medicare-approved amount.

Verifying a Non-Facility Limiting Charge

Medicare beneficiaries can take proactive steps to determine if a charge from a non-participating provider is legitimate and adheres to the limiting charge rule. First, it is important to ascertain the Medicare-approved amount for the specific medical service received. This information can often be found using tools available on the Medicare.gov website, such as the Procedure Price Lookup for outpatient services. Beneficiaries can also contact Medicare directly by calling 1-800-MEDICARE for assistance in finding approved amounts.

Once the Medicare-approved amount is known, the beneficiary can calculate the maximum permissible limiting charge. This is done by multiplying the Medicare-approved amount by 1.15. For instance, if the Medicare-approved amount is $200, the limiting charge would be $230 ($200 x 1.15). Comparing this calculated amount to the charge billed by the provider helps verify compliance.

It is advisable to perform this calculation before making a full payment if there is any doubt about the charge. This proactive verification allows beneficiaries to understand their financial obligations clearly. It also provides a basis for discussion with the provider if there appears to be a discrepancy.

Addressing Overcharges

If a Medicare beneficiary believes they have been charged more than the non-facility limiting charge, there are specific steps to address the situation. The initial action should be to contact the provider’s billing office directly. Billing errors can occur, and a simple discussion may resolve the discrepancy without further action. It is helpful to have the Medicare Summary Notice (MSN) and the calculated limiting charge readily available for this conversation.

Should contacting the provider not resolve the issue, the beneficiary can report the potential overcharge to Medicare. This can be done by calling 1-800-MEDICARE, the official Medicare helpline. Another resource is the State Health Insurance Assistance Program (SHIP), which provides free counseling and assistance to Medicare beneficiaries.

When reporting an overcharge, it is important to provide detailed information. This includes the provider’s name, the date of service, the amount billed, and any relevant documentation like the Medicare Summary Notice. Medicare takes such reports seriously, and providers who consistently violate the limiting charge rule may face sanctions or penalties.