Balance billing is a practice in which doctors or other health care providers bill you for charges that exceed the amount that will be reimbursed by Medicare for a particular service. If your doctor is a participating provider with Medicare, balance billing is forbidden. 93 percent of non-pediatric primary care doctors in the US are participating providers.
Some doctors aren’t participating providers with Medicare, but they also haven’t opted out of Medicare altogether. These non-participating providers can balance bill you, but the total charge can’t be more than 15 percent more than Medicare will pay the doctor. Medicare pays non-participating doctors 95 percent of the regular Medicare rate, and the doctor can increase that amount by up to 15 percent and charge it to the patient (in addition to the normal Medicare deductible and/or coinsurance that applies for the service). This 15 percent cap is known as the limiting charge.
Providers who have opted out of Medicare altogether cannot seek reimbursement from Medicare at all. The patient is fully responsible for paying the entire bill in that case, and there’s no limit to how much the provider can bill. It’s important for patients to understand the difference between a doctor who is non-participating versus a doctor who has opted out altogether, since the Medicare limiting charge doesn’t apply to doctors who have opted out of Medicare. Opting out is rare overall, but fairly common for some specialties. According to Kaiser Family Foundation data, only 1 percent of all doctors have opted out of Medicare, but that rises to 42 percent among psychiatrists.