Why Some Doctors Charge You More for Medicare

Understanding the Limiting Charge

Your Medicare billing can be complicated. Knowing how your doctors charge for services can help you get the best deal. Hill Street Studios/Blend Images/Getty Images

Not every doctor accepts Medicare. Even for those who do, they do not all play by the same rules. That includes how much they will charge you for their care. Knowing what to look for when you choose your doctor may save you money.

Doctors Who Do Not Accept Medicare

If your doctor does not accept Medicare for payment and this is your only insurance, then you are on the line for paying all health care costs out of pocket.

This can get expense quickly. It is obviously in your best interest to choose a doctor that accepts Medicare.

Doctors Who Accept Medicare

Using a doctor that accepts your insurance will save you money but how can you maximize those savings? Doctors that accept Medicare for payment fall into two categories. Those that accept assignment and those that do not.

Every year, the Centers for Medicare and Medicaid puts out a recommended physician fee schedule. Doctors who accept assignment of this fee schedule are called participating providers and will not be allowed to charge more than the recommended amount. Doctors who do not accept assignment are non-participating providers and may charge more, even though they know that Medicare will not pay them for that extra amount. To get their money, those doctors will bill you separately for what they feel is their fair share.

The Limiting Charge

The idea that a doctor can bill you whatever he wants can be intimidating.

To avoid fraud and abuse, Medicare has set a limit on how much those doctors can charge. That amount is known as the limiting charge. At the present time, the limiting charge is set at 15 percent. Doctors who charge more than the limiting charge could potentially be removed from the Medicare program.

For example, if the fee schedule lists a service for $100, the doctor could bill up to $115 dollars. Medicare will pay towards the $100 portion of the bill and the doctor will bill you separately for $15.

Sadly, the limiting charge only extends to healthcare providers. Non-participating suppliers of medical equipment, meaning those that do not accept assignment, can charge you as much as they want. This is the case even if the doctor who prescribed that equipment accepted assignment. It is in your best interest to shop around for medical supply companies that provide the best costs and customer service.

Incentives for Doctors

What is to stop all Medicare providers from not participating? Wouldn’t the limiting charge help them make more money? The answer is easy. Doctors are incentivized by Medicare to participate in the fee schedule.

Medicare will cover 100 percent of the recommended fee schedule amount for participating providers but only 95 percent for non-participating providers. Put simply, for every $100 of services, a non-participating provider will lose $5 from Medicare.

Though a doctor could bill an extra $15 with a limiting charge, this would at best be a $10 profit. A doctor has to weigh whether or not his patient population would be able to afford the added cost or if more money could be lost in bad debts and collection costs.

Other benefits for participating providers include:

  • Free preventive screening. While the doctor still receives payment from Medicare for his care, Medicare beneficiaries pay no out of pocket costs. 
  • Faster processing of Medicare claims. The government is notorious for slow response times. Hastening reimbursement is a significant benefit for any medical office.
  • Medicare directories. Medicare promotes participating providers to senior organizations and to anyone who asks for their directory.

The number of participating providers has increased from 28 percent in 1986 to 96 percent in 2011.

How Much You Will Pay


Participating Providers

Non-Participating Providers

Physician Fee Schedule Amount$100$100

Limiting Charge



(maximum 15 percent)

How Much the Doctor Can Charge$100$115
How Much Medicare Pays


(80 percent standard Medicare payment)


(95 percent of the 80 percent standard Medicare payment)

How Much You Will Pay


(20 percent coinsurance)


($19 [95 percent of your standard 20 percent coinsurance] + $15 limiting charge)

Some preventive screening tests are free to you when you receive care through a participating provider. However, this is the exception. Medicare does not pay 100 percent for most services rendered. Medicare typically pays 80 percent of the recommended cost and you pay a 20 percent coinsurance.

Understanding how the system works will help you to make the most of your dollars. This table outlines the cost breakdown if you received the same $100 service from a participating and a non-participating provider.

Incentives for You

What better incentive can there be than saving money? The services you receive from each Medicare provider is the same but you have the advantage of getting free preventive care and could be charged less for your other services. Find a participating Medicare provider and reap the benefits.


Boccuti, C. Paying a Visit to the Doctor: Current Financial Protections for Medicare Patients When Receiving Physician Services. The Henry J. Kaiser Family Foundation. http://kff.org/medicare/issue-brief/paying-a-visit-to-the-doctor-current-financial-protections-for-medicare-patients-when-receiving-physician-services/. Published April 7, 2014. Accessed June 25, 2015.

Medicare.gov. Lower costs with assignment. http://www.medicare.gov/your-medicare-costs/part-a-costs/assignment/costs-and-assignment.html. Accessed June 25, 2015.