Opting Out of Medicare: How to Get Out and Stay Out
Physicians can cut ties with Medicare and privately contract with Medicare beneficiaries, but doing it incorrectly can be costly.
Fam Pract Manag. 2017 Nov-Dec;24(6):17-20.
Author disclosure: no relevant financial affiliations disclosed.
For many physicians, the administrative side of practicing medicine has grown increasingly complex in recent years. The challenges are particularly evident in the Medicare program, where a host of initiatives (e.g., meaningful use, the Physician Quality Reporting System, Value-based Payment Modifier, the Medicare Access and CHIP Reauthorization Act, and now the Quality Payment Program) require tracking more information, submitting more data, and working more closely with electronic health record (EHR) systems. For physicians who are too overwhelmed or unprepared to successfully participate, these programs threaten payment penalties and potential exposure to false claims liability. Family physicians' Medicare participation rates have remained stable despite the demands,1 but opting out remains a viable option for those who want to set their own fees free of Medicare's limiting charges and are prepared to navigate the complicated requirements. This article explains how.
The basics of Medicare participation
A physician who opts out of Medicare may set his or her own fees but may not submit claims to Medicare or receive any payment from Medicare. When the physician sees a Medicare beneficiary, the physician and patient must enter into a private contract (discussed below) that prevents either side from submitting any claim to Medicare for what would otherwise be a covered service. Opted-out physicians and their patients may not receive payments under Medicare Advantage plans either.
Note that opting out differs from “non-participating” status. Non-participating physicians may accept Medicare assignments on a claim-by-claim basis. They are paid 95 percent of the fee schedule amount by Medicare for assigned claims. For unassigned claims, they can charge their Medicare patients up to the “limiting charge,” which is 115 percent of the Medicare-allowed amount for non-participating providers.
Only individuals may opt out of Medicare; a corporation cannot. As a practical matter, however, if all the physicians or other providers in a group opt out individually, then the corporation will have effectively opted out.
Opting out applies to almost all settings in which a physician treats Medicare patients, so physicians should carefully consider all arrangements in which their participation might be necessary. For example, if a physician moonlights as an independent contractor for another practice, he or she could still see Medicare patients in that role, but neither the physician nor the entity for which the physician works could receive any payments from Medicare for the physician's services.
These prohibitions do not include emergency or urgent care services. (See “Opt-out status exceptions: emergency and urgent care.”)
OPT-OUT STATUS EXCEPTIONS: EMERGENCY
1. Martin S. AAFP member survey provides valuable perspective. In The Trenches. August 2017. http://bit.ly/2wBK0fx. Accessed Aug. 22, 2017.
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