What is the “Limiting Charge” in Medicare?

Medicare Benefits Solutions
Oct 19, 2021

Original Medicare costs and savings make healthcare a more affordable option for people 65 years and older, or those under 65 who qualify for Medicare due to certain disabilities.

Because there are many facets to Original Medicare’s benefits, a careful understanding of what consumers are expected to pay or are being charged is an ongoing and significant learning opportunity. 

Seek Original Medicare providers who accept assignment

An Original Medicare provider “assignment” is a legal and binding agreement between Original Medicare and health care providers. Those providers who accept assignment are held liable to work within Medicare’s financial terms of provider charges. Because not all healthcare providers accept assignment and agree to Medicare’s terms, it is wise to confirm your provider’s position before accepting medical care or treatment.

What is a limiting charge?

Being a part of Original Medicare has its perks. A limiting charge, or limiting charge cap is the highest Medicare-approved payment charge a Medicare recipient can be charged by a physician, supplier or provider who does not accept Medicare assignment for covered services. That cap generally reflects up to a 15% overage of Medicare’s top approved charge of services performed.

It also means those who have accepted assignment will accept Medicare’s limiting charge terms-of-payment amount as payment in full for covered services rendered. This is one big, money-saving advantage Medicare benefits can provide.

How Medicare’s limiting charge can help

Finding ways to save even more money with Medicare benefits and limiting charge assignments helps keep medical service costs lower. The limiting charge assignment agreement can assist in lowering out-of-pocket expenses while leveraging the consumer’s position of payment protocols. 

For example, you may be able to prolong out-of-pocket expenses and defer claim submission charges by only being charged upfront for Medicare’s deductible, and coinsurance costs (if applicable). Once a claim is finally filed, your remaining out-of-pocket expenses may be paid directly to the service provider.

Use caution when choosing providers

There are a lot of great providers out there who have chosen to “opt-out” of working with Medicare. It is important to understand, however, that receiving healthcare services from a private provider, physician or facility that has chosen to “opt-out” means you receive little-to-no Medicare benefits or coverage. There are exceptions where emergency circumstances may allow some coverage. 

Providers opting to work independently from Medicare must do so for two years. After two years, they may continue to opt-out or become a Medicare assigned resource upon request.