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Opt Out of Medicare: What Physicians & Practitioners Need to Know

opt out of medicareBy: Susan St. John

Physicians and practitioners are ordinarily required to submit claims on behalf of Medicare beneficiaries when payment may be made for items and services provided by the physician or practitioner. However, in today’s health care environment, more and more physicians and practitioners are considering opting out of Medicare. For those professionals facing this decision, there are a few things to consider.

Is the Physician or Practitioner Eligible to Opt-Out?

First, determine if you are eligible to opt out of providing services to Medicare patients. Not every physician or practitioner is eligible to opt out of Medicare. For purposes of opting out of Medicare, “physician” is limited to: doctors of medicine; doctors of osteopathy; doctors of dental surgery or medicine; podiatrists; and optometrists; licensed by the state in which they practice (this could be multiple states).  The term practitioner, for opt-out purposes, is limited to: PAs, ARNPs, Clinical Nurse Specialists, CRNAs, Certified Nurse Midwife, Clinical Psychologist, Clinical Social Worker, Registered Dietitian and Nutrition Professional. What is omitted from the definition of physician and practitioner are chiropractors, and physician therapists and occupational therapists in independent practice. Consequently, a chiropractor may not opt out of Medicare; neither may PTs or OTs in independent practice, but it seems PTs or OTs working in a physician’s office may be eligible to opt out.

Will Opt-Out Significantly Effect Revenue?

Next, if as a physician or practitioner, you are eligible for opting out of Medicare, consider the patient base you provide or will be providing services to. Will your patient base consist of a significant percentage of Medicare patients, whose conditions will be covered by Medicare? If so, would opting out drive patients away from you, negatively impacting your stream of revenue? Or, is it likely that the services your patients need are not covered by Medicare, and the patient would bear the financial responsibility of paying for your services out of pocket? If most of the services you provide would not be covered by Medicare or your patient base is not made up of a significant percentage of Medicare patients, opting out may be for you.

Private Contracts

Opt-out physicians or practitioners are required to use private contracts with Medicare beneficiaries, making sure the beneficiary understands they are fully financially responsible for the physician’s or practitioner’s charges for items or services provided. Advanced Beneficiary Notice of Noncoverage may not be used by opted-out physicians and practitioners as they do not apply – a private contract must be in place with the beneficiary. A physician or practitioner who opts out of Medicare, is not required to submit claims on behalf of Medicare beneficiaries. Further, opted-out physicians and practitioners are not limited in the amount they may charge beneficiaries for Medicare covered services.

Private contracts with beneficiaries must meet certain requirements. The private contract must clearly set forth that neither the physician, practitioner, or beneficiary, may submit claims for items or services provided by an opted-out physician or practitioner. The Medicare beneficiary agrees to give up Medicare payment for services provided by the opted-out physician or practitioner and agrees that charge limits that would normally apply if the physician or practitioner had not opted-out may be exceeded and the beneficiary will be fully responsible for the charges. The private contract must clearly set forth that the physician or practitioner has opt-out of the Medicare program. Further, the private contract must be reduced to writing, in large enough print for the beneficiary to read (no small type or fine print allowed) and must include affirmation that the beneficiary (or legal representative) understands the beneficiary may seek items and services from a physician or practitioner who has not opted out of the Medicare program.

The private contract must also provide that the beneficiary has not been compelled to enter into the private contract. The contract should include the physician’s or practitioner’s opt-out effective dates. It must include a statement that Medigap plans do not make payments not made by Medicare, and supplemental plans may elect not to make payments if Medicare does not pay.

The contract must provide that no emergency services or urgent care services were required at the time the contract was signed. It must be signed by the beneficiary (or legal representative) and the opted-out physician or practitioner. A signed copy of the contract shall be given to the beneficiary or legal representative and the original must be retained and kept on file by the physician or practitioner for the duration of the then current opt-out period.

A contract is needed for each Medicare beneficiary treated by the opted-out physician or practitioner.

A new contract must be entered into for each 2 year opt-out period.

Because the private contract with the Medicare beneficiary must include provisions discussed above, it would be wise to seek counsel to review or prepare a private contract the physician or practitioner is anticipating using with Medicare beneficiaries.

When may a physician or practitioner opt out of Medicare?

If the physician or practitioner is enrolled in Medicare, but is not-participating, the physician or practitioner may opt-out at any time provided that the opt-out affidavit is filed with the MAC within 10 days of signing his/her first private contract. If the physician or practitioner is enrolled in Medicare and is participating, he or she must submit an opt-out affidavit at least 30 days before the first day of the next calendar quarter. Services may not be provided under private contract until the first day of the effective date of the opt-out.

Medicare requires certain that provisions be included in the affidavit for opting out that will be signed by the physician or practitioner and submitted to the MAC. A few of the required provisions include: that the physician or practitioner must include his or her identifying information, including NPI or tax id number, state that the physician will use private contracts for providing items and services to Medicare beneficiaries (except for emergency or urgent care), no claims will be submitted during the opt-out period and no Medicare payment made for opted-out services. There are other mandatory provisions that must be included in the opt-out affidavit. As with the private contract, it would be prudent to have counsel review or prepare the opt-out affidavit to make sure it meets requirements set forth by the Medicare program.

Consequences of Opting-Out

Physicians or practitioners who choose to opt-out, opt-out for all covered Medicare services he or she provides, not just “sometimes” unless the opted-out physician or practitioner provides emergency or urgent care services to a beneficiary that has not signed a private contract with the physician. However, an opted-out physician or practitioner may refer patients to non-opted out physicians or practitioners for medically necessary services and Medicare would cover the services provided by the non-opted out physician or practitioner.

More to Come

There are many nuances to physicians or practitioners opting out of Medicare, such as providing emergency or urgent care, providing follow-up care after emergency or urgent care is rendered, working as part of a group practice, or working for a hospital under a salary or other compensation arrangement. These topics will be explored in Physicians and Practitioners – Opting Out of Medicare, Part II.