Opting Out of Medicare

Whenever Medicare changes its rules, providers express interest in opting out of Medicare.

Indeed, many clinicians are wondering about, and opting out of third party payment systems for a variety of reasons (low payment, no payment, and hassle factors), which we will explore in another article.

However, with the Medicare Access and CHIP Reauthorization Act (MACRA) and other programs that will reimburse on quality care, the complexity and hassle factor climbs above tolerance for some providers.

Thus the question comes….“How do I opt out of Medicare?”.

Let’s start at the beginning. Why do we need to opt out?

Unlike other third party payers where you must make the effort to enroll, Medicare has a rule that automatically requires you to submit claims for any Medicare Beneficiary who receives covered services from you. It’s called the Mandatory Claim Submission Rule.

Mandatory claim submission rule

The Social Security Act (Section 1848(g)(4)) requires that claims be submitted for all Medicare patients for services rendered on or after September 1, 1990. This requirement applies to all physicians (including NPs) and suppliers who provide covered services to Medicare beneficiaries, and the requirement to submit Medicare claims does not mean physicians or suppliers must accept assignment. Compliance to mandatory claim filing requirements is monitored by CMS, and violations of the requirement may be subject to a civil monetary penalty of up to $2,000 for each violation, a 10 percent reduction of a physician’s/supplier’s payment once the physician/supplier is eventually brought back into compliance, and/or Medicare program exclusion. Medicare beneficiaries may not be charged for preparing or filing a Medicare claim. (1,2)

Enrolling in Medicare means:

  • You receive a provider number and billing privileges.
  • You agree to abide by medicare’s determination regarding covered services.
  • You agree to be paid according to the Medicare allowable schedule and do not balance bill.
  • You attest that you are the individual applying for billing privileges (fraud prevention measures)
  • And of course, you agree to follow CMS rules.

Be aware, that a physician can be a “non-participating” provider with Medicare. Nurse Practitioners do not have that option. We need to either be a participating provider or a provider who has opted-out of the program.

Thus, as the rules become more complex, many providers, especially those in small solo or group practices no longer wish to participate in Medicare and possibly other third party payers. However, unlike other payers, where you just need to cancel your contracts, with medicare you need to formally opt out.

How to Opt-Out

When you opt out of Medicare you will need to notify your Medicare contractor in writing and enter into a private written contract with any patients who are Medicare Beneficiaries.

  • Contact your Medicare contractor. They may have the documents you need to opt-out. To my knowledge, there is not an online option for opting out. You’ll need to print out the form, or create it from the verbiage they give you and mail it in. My advice: Never mail anything to Medicare or a Medicare Contractor without a signature receipt and tracking.
  • Create a private contract with each Medicare Recipient that you will be treating. Your contractor may have the form you can use, or at least they will give you the language they want you to use.
  • Your patients need to clearly understand that you will not bill Medicare, and they cannot submit bills for reimbursement with Medicare. Furthermore, chances are that they will not be able to utilize any secondary insurance to cover the cost of seeing you.
  • Be aware, you cannot opt out for some patients and bill Medicare for others.
  • Keep a copy of all of the documentation, including your opt-out affidavit and your individual patient contracts.

FAQs about Opting Out

  • You can order diagnostic testing for your patients and it will be covered by Medicare if the provider doing the diagnostic testing is an enrolled Medicare provider.
  • Once you opt out, it applies to all locations you work. So if you have your own practice, and also work for someone else, they cannot bill Medicare for the services you provide.
  • Your private contracts with patients have to be written in a language, using words they understand. For best results, use large fonts and simple, everyday language. This is no place for legal or medical jargon.
  • You must file at least 30 days prior to the first day of the calendar quarter (the effective date). You cannot provide services via a private contract until after the effective date.
  • Providers who can opt out of Medicare include NPs, CNS’, CRNAs, CNMs, PAs, MDs, DOs, DDS, DPM, ODs, clinical psychologists, clinical social works and registered dietitians and nutritional professionals.

Who is your Medicare Contractor?

If you are unsure who is your contractor, here is the Medicare Fee for Service Provider Enrollment Contact List.

References

  • https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/downloads/SE0908.pdf
  • https://www.ssa.gov/OP_Home/ssact/title18/1848.htm Payment for Physician’s Services (that includes all qualified providers, ie NPs)

Your Turn

Have you opted out Medicare? What challenges did you have?

Comments 12

  1. I opted out about 3 years ago. Once you opt-out, it’s important to know it is not automatically forever, you need to “renew” your opt-out status every couple of years. It is really a bit crazy, kind of like getting a divorce then every 2 years having to file a renewal of your intent to stay divorced!! Leave it to MCR to come up with that nutty rule!

  2. Post
    Author

    Hi Rana,

    The two year opt out is expiring with MACRA.

    “Change Request (CR) 9616 alerts physicians and practitioners who signed a valid opt-out
    affidavit on or after June 16, 2015, that it will automatically renew every 2 years. CR9616
    revises the “Medicare Benefit Policy Manual” to be consistent with the Medicare Access
    and CHIP Reauthorization Act of 2015 (MACRA) amendments. If physicians and
    practitioners who filed affidavits effective on or after June 16, 2015, do not want their optout
    to automatically renew at the end of a 2 year opt-out period, they may cancel the
    renewal by notifying all MACs with which they filed an affidavit in writing at least 30 days
    prior to the start of the next opt-out period”
    https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/Downloads/MM9616.pdf

  3. Hi Barbara,

    It seems very clear to me that I have to be all in or all out with very little voice in the matter, but if I work locums in the ER, and run a cash only clinic on my own, is this legal and allowed?

    Best,

    Mark

  4. I am in solo practice and in process of getting on insurance panels. One of the health networks is a health co-op and they stated that they require me to be with Medicare in order to get referrals from them. I am to bill the co-op even if if is a Medicare beneficiary. I know that I am enrolled in Medicare, but I don’t want to accept Medicare patients, except in the case of this health co-op.
    Can I do this without causing problems for myself and my business?

  5. Barbara,
    thank you for the update i have been missing the calls due to some start up issues. Please enlighten more on MACRA. I justsign provider agreement with medicare and i have been seeing medicare patients.
    Why are NP opting out of medicare?
    Im very new to this.

  6. Post
    Author

    Mark, of course, you can work locums and your own practice. But be aware, the way I understand this is if you are opted out in your practice, the ER also cannot bill Medicare on your behalf.

    Thanks for stopping by!

  7. Post
    Author

    Hi Julie,

    Limited your patient panel to a specific payer is not unheard of. This should not cause a problem as long as you are clear upfront with new patients wanting to be a part of your practice.

    Also consider, what will you do with patients who drop that plan and have a different Medicare plan? Make sure your policies are clear and known to patients.

    Thanks for stopping by.

  8. Post
    Author

    Hi Florence,

    We did an entire webinar on MACRA in December. You’ll find it in the Member’s Portal @ http:clinicianbusinessinstitute.com.

    A lot of providers (not just NPs) are opting out of Medicare because they are choosing to have cash practices. Because of the Social Security Act, we are required to bill medicare if we see a Medicare recipient. In other words, we are opted in by law.

    Hope that helps. Hope to see you on a webinar soon!

  9. Post
    Author
  10. My question is in reference to the question above with Mark who works in the ED and has a cash practice. I am a NP and starting a cash practice. I will be opting out of Medicare. I have been working part time for another MD one day a wk. If I opt out of Medicare, I realize I can not take Medicare at the other practice. My question is whether they could pay cash at the other practice if seeing me?

  11. Post
    Author

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