Balance Billing and Medicare: What Beneficiaries Need to Know

By Andrea · Last updated: August 2026

Balance billing occurs when a provider charges a patient the difference between their billed rate and what Medicare actually pays. For most Medicare beneficiaries, federal rules limit or outright prohibit this practice — but the protections depend heavily on whether a provider has signed a participation agreement with Medicare and what type of plan you're enrolled in.

How Balance Billing Works Under Medicare

Medicare sets approved payment amounts for nearly every covered service. When a provider treats a Medicare patient, the payment structure — and whether you can be billed for the remainder — depends on the provider's status.

Participating Providers

Participating providers have signed an agreement to accept Medicare's approved amount as payment in full. They cannot bill you for any amount above that approved rate. You still owe your standard cost-sharing — the Part B deductible and 20% coinsurance — but nothing more. Roughly 96% of providers who accept Medicare fall into this category.

Non-Participating Providers

Non-participating providers have not signed a Medicare participation agreement, but they may still treat Medicare patients. They can charge above the Medicare-approved amount — but only up to a federally capped limit called the limiting charge. For most services, that ceiling sits at 115% of the Medicare-approved amount for non-participating providers, which itself is set at 95% of the standard fee schedule. In practice, the maximum out-of-pocket exposure from the limiting charge is capped at roughly 9.25% above the standard Medicare payment rate.

Opt-Out Providers

A small group of providers have formally opted out of Medicare entirely. These providers — most commonly certain physicians and practitioners — can charge whatever they choose, with no limiting-charge ceiling. To see an opt-out provider, you must sign a private contract explicitly acknowledging that Medicare will not pay any portion of the bill. If you did not sign such a contract and were still charged beyond Medicare's limits, you have grounds to dispute the charge.

Medicare Advantage (Part C)

Medicare Advantage plans use their own provider networks. In-network providers have contracted rates with the plan and cannot balance bill you beyond your plan's cost-sharing. Out-of-network providers are more complex: some MA plans cover out-of-network care at a higher cost-share, but protections vary by plan. Critically, the federal limiting-charge rules that apply to Original Medicare do not automatically transfer to Medicare Advantage — your plan's Evidence of Coverage document is the governing document for balance billing exposure.

Medicare Supplement/Medigap

Medigap plans often reduce or eliminate the cost-sharing gaps in Original Medicare, including the 20% Part B coinsurance. Some Medigap plans — particularly Plans F and G — cover the excess charges from non-participating providers, effectively zeroing out your balance billing exposure for covered services. Plan F is no longer available to beneficiaries who became eligible after January 1, 2020, but Plan G remains a strong option for those seeking protection against excess charges.

When Balance Billing Is Illegal Under Medicare

Federal law prohibits balance billing in several specific situations:

A participating provider bills above the Medicare-approved amount for a covered service.
A non-participating provider charges more than 115% of their reduced fee schedule — the limiting charge.
An opt-out provider treats a Medicare patient without a signed private contract in place.
Any provider bills a Medicare patient for a service that Medicare has classified as a non-covered or excluded service without clearly informing the patient beforehand in writing (an Advance Beneficiary Notice, or ABN, is required in these cases).

If any of these situations applies to a bill you received, you have the right to dispute the charge — and in most cases, you should not pay it until the dispute is resolved.

How to Dispute an Improper Balance Bill

Start by requesting an itemized bill and your Medicare Summary Notice/MSN. The MSN shows what Medicare was billed, what it approved, and what it paid. Compare these figures against the provider's invoice. If the provider charged more than the limiting charge, or more than the Medicare-approved amount (for participating providers), document the discrepancy in writing.

Contact the provider's billing department first — many overcharges are billing errors rather than intentional violations, and a direct conversation often resolves the issue. If the provider insists the charge is valid and you believe it violates Medicare rules, escalate to:

Your State Health Insurance Assistance Program/SHIP — free, unbiased counseling available in every state.
1-800-MEDICARE — file a complaint directly with Medicare.
Your State Medical Board — for licensed physician violations.
The HHS Office of Inspector General — for suspected Medicare fraud.

The No Surprises Act and Its Limited Overlap with Medicare

The federal No Surprises Act, effective January 2022, primarily protects people with private health insurance from unexpected out-of-network bills — particularly for emergency care and certain non-emergency services at in-network facilities. It does not directly apply to Original Medicare beneficiaries, because Medicare already has its own limiting-charge framework. However, beneficiaries enrolled in Medicare Advantage may see some overlapping protections depending on plan structure. If you receive an unexpected bill for emergency services while on a Medicare Advantage plan, the No Surprises Act may offer an additional layer of recourse.

Practical Steps to Avoid Balance Bills Before They Happen

Confirm provider status before any scheduled appointment — participating, non-participating, or opt-out — using Medicare Care Compare.
Ask the provider's office directly: "Do you accept Medicare assignment?" Accepting assignment means they are participating and cannot balance bill.
For planned hospital procedures, verify that all providers involved — anesthesiologists, surgical assistants, pathologists — separately accept Medicare assignment. Hospital participation does not cover every individual practitioner working there.
If you have a Medigap Plan G, confirm whether it covers Part B excess charges in your state — a few states prohibit non-participating providers from balance billing entirely, making this moot.
Keep all Advance Beneficiary Notices/ABNs you are given — if a provider did not give you a required ABN before delivering a non-covered service, you may not be legally obligated to pay.

States With Stronger Balance Billing Protections

Several states go beyond federal Medicare rules. Connecticut, Massachusetts, Minnesota, New York, Ohio, Pennsylvania, and Vermont prohibit non-participating providers from balance billing Medicare patients at all — meaning even the limiting charge cannot be imposed in those states. If you live in one of these states and receive an excess charge from a non-participating provider, that charge is illegal regardless of federal thresholds.

State rules apply based on where the service was provided, not where you live. If you receive care while traveling, the state of service governs.

Key Terms at a Glance

Medicare-Approved Amount: The fee schedule rate Medicare considers reasonable for a covered service.
Assignment: A provider's agreement to accept the Medicare-approved amount as full payment.
Limiting Charge: The maximum a non-participating provider can bill — capped at 115% of the non-participating fee schedule (roughly 109.25% of the standard Medicare rate).
Opt-Out Provider: A provider who has formally left Medicare and may charge any amount, provided the patient signed a private contract.
Advance Beneficiary Notice/ABN: A written notice required before delivering a service Medicare may not cover, giving patients the choice to accept or decline.
Medicare Summary Notice/MSN: A quarterly statement showing all claims billed to Medicare on your behalf — your primary tool for spotting billing discrepancies.