Medicare was designed to be an affordable healthcare option for older adults and people with qualifying disabilities. That does not mean it can’t get expensive at times. Part of the problem lies in costs that are not always transparent, especially when it comes to who provides that service and where you get it.

This article will show you where to look for hidden fees and how to protect yourself from unwanted bills when you are on Medicare.

The Limiting Charge

If you are on Medicare, you want to choose a doctor who takes Medicare as payment. This means they have signed a contract with the government and agree to follow set rules and regulations. Not choosing a doctor that opts in to Medicare will result in your paying for your care completely out-of-pocket.

However, you also want to make sure your doctor is a participating provider, meaning they also “accept Medicare assignment.” Not only do they take Medicare for payment, but they also “accept” the Medicare rates set for services each year. In that way, there is a cap on how much you will spend on any given service.

Any doctor who takes Medicare but does not agree to the annual fee schedule is known as a non-participating provider. They can legally charge you up to 15% more than what Medicare recommends. This is known as the limiting charge. Some states lower the limiting rate even further. New York State, for example, decreases it to 5%.1

To find out if a healthcare provider accepts assignment, check out Medicare’s Care Compare. Use the search engine to look for providers by area, name, or specialty. Their listing will have a notation that says “Charges the Medicare-approved amount (so you pay less out-of-pocket).”

Preventive Screening

Participating providers can offer you free preventive screening services like colonoscopies and mammograms. If your doctor is a non-participating provider, however, you will be charged for these services. Expect to pay the Part B coinsurance, which is 20% of the cost of each test.

Balance Billing

When you sign up for insurance (Medicare or otherwise), the expectation is that your plan will cover your care as long as you pay your premiums, deductibles, coinsurance, and copayments. Balance billing occurs when a doctor or facility bills you for services after your insurance plan paid what it was contracted to.

The limiting charge is one example of balance billing. Non-participating providers charge you more than what Medicare will pay, and you are expected to pay the difference. At least in this situation, there’s a limit as to how much you could pay.

In most cases, balance billing costs are not capped. Any care received out of your plan’s network could lead to an extra bill. Also, services that are not covered by Medicare, or any other health plan you have, could result in your paying for everything yourself. Cosmetic surgery is a common example.

You could even be hit with a surprise bill if you go to an in-network facility. This often occurs when a provider at the facility does not accept assignment or is not in your Medicare Advantage network.

Medicare Networks

Original Medicare has the widest possible network. You can receive care from any provider who opts into Medicare regardless of where you are in the country. Medicare Advantage plans, however, are limited to a local network of providers and facilities.

The No Surprises Act

Many states have enacted laws to protect you from unexpected bills like these. Thankfully, legislation is underway to decrease surprise billing on a federal level too.

The No Surprises Act is part of the Consolidated Appropriations Act of 2021. It was signed into law on December 27, 2020 and will take effect on January 1, 2022. It won’t stop balance billing completely, but it will prevent it from happening in the following situations:2

Emergency care at an in-network facility by an out-of-network health provider

Emergency care at an out-of-network facility

Non-emergency care at an in-network facility by an out-of-network health provider without first notifying you they are out-of-network or giving you in-network options

Out-of-network air ambulance services

An emergency is an emergency. You should not face financial penalties because you were too sick at the time to pick and choose which health professionals took care of you. Likewise, it is unfair for you to get a bill if you were not notified someone was not in your plan’s network, especially if you made efforts to get care at an in-network facility.

This law requires that doctors and facilities get your consent before they bill you more than what your insurance plan covers. Otherwise, you will pay what you normally would for in-network care, even if that care was out-of-network.

The Hospital Price Transparency Rule

Balance billing issues aside, it can be hard to know if you’re getting the best deal for hospital care when you only find out the price after you get a bill for it. That is why the Trump administration enacted a law in November 2019 requiring hospitals to post standard cost information online to the public. That law took effect on January 1, 2021.3

The costs that hospitals must disclose include those for:

Supplies and procedures (diagnostic tests, imaging scans, laboratory tests, medications, surgeries, etc.)

Room and board

Use of the facility (“facility fees”)

Services performed by hospital-employed physicians and non-physician practitioners (physician care, physical therapy, occupational therapy, psychotherapy sessions, etc.)

Services packages where multiple services are covered for one flat price

Any items or services that the hospital can bill you for

The hospitals must list the flat rate for each of these services. They must also list the negotiated rates for different insurance companies and the range of discounted prices for people who do not have insurance or choose not to use their insurance.

Unfortunately, as many as a third of hospitals have been noncompliant with the ruling.4 Either they do not post the data at all or bury it where it is difficult for people to find it on their websites. Also, fewer than 10% of people realize that they have this cost-comparison option at all.5

Finding a Fair Price

In an emergency, you do not have time to make a cost comparison. However, if you have a planned procedure or test performed at a hospital or hospital-affiliated site, checking prices online can be a great way to save.

Consider the following examples:

Based on the prices you find, you can decide if you are willing to travel farther to get a better rate.

You have a high-deductible health plan, and the end of the year is approaching. Essentially, you would be paying the full cost out-of-pocket if you used your health plan. You may be able to save more by paying cash than using your insurance.

You receive care out-of-network. You can use the hospital’s posted rates to make sure you are getting a fair deal.

The Centers for Medicare & Medicaid Services has released a Procedure Price Lookup tool that compares national prices for common procedures performed at ambulatory surgery centers or in hospital outpatient departments. It does not break down costs by healthcare provider or region.

Many companies are putting the public online hospital data into search engines and apps. This makes it even easier to look for fair prices in your area. One example is FAIR Health Consumer, which is free to use. Others like Healthcare Bluebook offer a free tool but also have subscription options.