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.


  • 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?

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  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. 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”

  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?



  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. 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. 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. 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. 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?

  10. Thank you for this info! I own a cash pay practice. I understood that if I opted out that I could still order diagnostics if the facility providing the diagnostics is a Medicare provider (as you indicated). However, the facilities are telling me that I cannot. I was told that I cannot order testing under Medicare because I cannot treat. I’m currently waiting for my Opt Out paperwork to go through. Can you clarify please?

  11. Hello Laura,

    According to this document, as long as you have an NPI and have an “approved” or “opted out” status, you should be able to order testing.
    You might also consider clarifying with your local Medicare contractor as things can change, but this is the most updated reference I found.
    Good luck!

  12. I am a physician who has opted our of Medicare. I have hired a Nurse Practitioner who would like to see Medicare patients.

    Do you know if I can have a collaborative agreement with a nurse practitioner who bills medicare under his own NPI number?

    In other words, does the supervising MD have to also be in Medicare for the NP to be able to see Medicare patients and get reimbursed?


  13. To my knowledge, as long as the NP is credentialed and has a contract to provide Medicare services and bills under his/her NPI numbers (NPI11 and NPI-2) it should be fine. If the billing is being done under your business NPI number, you may run into problems.

    Thanks for stopping by and asking the question.

  14. Hi, I am a Family and Psychiatric NP looking into starting my own business. I live in an area where there is a high geriatric population. I am actually thinking of accepting only Medicare insurance and having cash pay for all other clients that don’t have Medicare.
    What would be the downfalls of this?

  15. Lots of practice work in this way. You’ll need to make sure that your numbers work out since Medicare is typically has a lower reimbursement. In other words, can you generate enough revenue to cover the overhead (including what you would pay yourself), and still make a profit?

  16. Yes and no. We are required (by law) to bill CMS for Medicare beneficiaries unless we opt out. However, you still have to apply for credentialing/providing number in order to bill Medicare. You don’t have a provider number if you’ve never enrolled, however, if a Medicare beneficiary submits a bill to Medicare for reimbursement, you could be fined if you have not opted out.

  17. If an NP does not qualify to be a Medicare provider because they do not have a Masters and we’re not grandfathered in, do they have to opt out? Can they bill a patient for services?

  18. Can you limit the number of Medicare patients your practice allows at one time? I am finding that I have great difficulty billing and waiting on medicare, especially if there is a primary and secondary insurance to bill for.

  19. Hello, thank you for all the helpful information you provide. Im a FNP, that currently works a part time job, where soon I might be seeing Medicare Patients, so I don’t think I want to Opt-Out just yet; but if I go into practice for myself, a cash based practice, and decided not to take Medicare, is it a contract my patients have sign or is it best if I opt-out all together?

  20. Hi Veronica,

    If you want to privately contract with Medicare recipients you MUST opt out of Medicare. You need to understand that opting out is global. Once you are opted out, Medicare requires that you enter into a “private contract” with the recipient before you can charge cash for your services.


  21. I work in an occupational setting running a clinic. The company pays for all visits, care, medications given I do not have an active medicare contract since my last job accepting medicare was over two years ago, working at a physicians office.. I do have an NPI and have not entered into a private business contract with medicare.
    My 1st. question is if i opt out. Can i still call in medications with my NPI for the occ. patients and make referrals?
    2nd. question. If i enter into my private practice and do not have a contract with Medicare ( which i do not), can i choose not to see Medicare patients? or just offer free/ services ie: educational services for them. And for all other private insurance customers enter into a private contract?

  22. First, be clear, even if you are not currently credentialed by Medicare you are still obligated to bill on behalf of the beneficiary if you happen to see one. If you inadvertently see a patient with Medicare, and charged them cash for a covered service and they submitted the claim to Medicare in order to get reimbursement, you will be fined. You may always choose not to see Medicare beneficiaries and not opt out, however, are you really sure that person does not have Medicare? (Hint, you can’t go on age alone).

    Your NPI number is yours and you can indeed make referrals and call in medications. In some cases, if you are not credentialed with the individual’s insurance plan, it may or may not be covered.

    The “private contract” is used for seeing Medicare Beneficiaries when you opt out of Medicare. It is not required otherwise. That said, of course, you will have a “contract” in the form of treatment consents and financial policies.

  23. Hi Barbara, I opted out of Medicare last spring and then later closed my solo practice. I think this means I wouldn’t be a candidate to work in any other practice that involves caring for Medicare patients until I can opt back in in two years, right?

  24. It is my understanding that (a) After the very first opt-out affidavit is filed, there is a 90-day period in which the provider can opt back in. But this is not allowed in subsequent opt-out periods. (b) Opting back in can ONLY occur on each two-year anniversary subsequent to the initial opt-in. In other words, after each renewal anniversary passes, opting back in can only occur at the next renewal anniversary. So if it’s only been 6 months since the last renewal anniversary, it would be necessary to wait another 18 months to opt back in. Does that seem correct? I got this from the CMS website. https://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/MedicareProviderSupEnroll/OptOutAffidavits.html Unfortunately, I could not find very detailed information about opting back in, even after reading MLN Matters Number: SE1311. Thank you!

  25. Hi Barbara,

    If an NP is working with a supervising physician and the NP is not credentialed with Medicare but the supervising physician is, is the NP required to sign an opt out? All charts are signed off by the supervising DO so Medicare should reimburse under him, correct?

    Can you even sign an opt out if you’re not credentialed with Medicare? And if I were to sign an opt out and the NP I feel like we wouldn’t be able to bill Medicare for the patients I see regardless of if the supervising DO is signing the chart.

  26. Lindsey, is this your practice? Or the physicians?
    If you are seeing the person and just having the physician sign off, and you are not credentialed, then it would be a false claim for the physician to bill (he/she did not see the patient).
    By law, a nurse practitioner must credential and bill medicare for medicare beneficiaries. The only way around this is to opt-out and it’s crucial you understand that it’s global. See the most recent blog post where I address it.

  27. can a non- part medicare physcian employ a NP and charge patients for NP under medicare limiting guidelines or does NP have to be particapting even though he is paid a hourly fee

  28. Jerry,

    Not sure I understand your questions, so if this is not correct, let me know.

    Another provider cannot see a patient and bill as if another provider saw the patient. So if the NP did not see the patient, the physician should not be billing as if the she/he did.

  29. Hi Barbara,
    You give the best advice.
    I’m a FNP/ PMHNP currently employed by a company, where I am credentialed with Medicaid, Medicare, and a number of other insurances. I do not have any known patients with Medicare or Medicaid, though.

    I have had an LLC where I have traditionally provided contracted services to other organizations. However, I would like to move forward with opening up my own private practice. I currently have an autonomous practice license (and will keep it, provided that Virginia passes HB 1245).

    I am considering a cash fee only practice;
    Or credentialing with only Medicare and one or two other payors.

    Insurance seems to be the biggest headache for practice owners and providers, and it seems accepting self pay and providing a super bill would eliminate a lot of hassle. However, I am nervous about opting out of Medicare.

    I have considered not opting out of Medicare, and not taking patients with Medicare (this might be a dumb question, but is that legal?), and having a form that the patient signs that says they do not have Medicare and will not attempt to submit the paid bill to Medicare for reimbursement.

    I have also considered not opting out but limiting my Medicare panel to only a small panel of patients, as you mentioned in response to Allison Hill above. It’s not necessarily that I find the rate terrible, but moreso that I have heard filing/ meeting Medicare’s demands to be cumbersome. Do you have any suggestions?

    What about Medicare replacement plans? How do those factor into the equation?

  30. 1. Insurance is not necessarily the easiest thing to navigate, but the truth is most people want to use insurance and practices that accept it grow sooner and faster than one that is all cash. To me, it was always just a necessary hoop. I saw plenty of people with no insurance as well, so it can be both.

    2. If you are going to continue to work and want the flexibility of possibly working for someone who accepts Medicare, you should not opt-out.

    3. Under the SS Act, we must bill Medicare for covered services unless we opt-out. We don’t always know who has Medicare and who does not. Providers have been burned by this in the past. Even people who agree not to try and get reimbursed through their payers, may still do so, setting you up for a potential fine and more.

    4. My personal experience was that Medicare demands are not difficult. I found some commercial payers worse.

    5. You can limit your panel for any of the payers.

    6. If my Medicare replacement plans you mean Medicare Advantage Plans, if you want to see those folks and bill those payers, you must not opted out.

    I hope that helps. I appreciate your kind words.

    ~ Barbara

  31. I work a part-time job but also have my own side niche business in men’s health. Can I stay opted in and continue to take Medicare patients for my employer and simply not see Medicare eligible patients in my side niche? My side niche does not accept any insurance and is a cash only practice. Can I put something on my website saying that I cannot take Medicare patients? Does this also apply to managed Medicare plans? Should I put something on the consent form that says “patient verifies that he is not enrolled in Medicare” or something similar? BTW- I love you and I’ve been following you for years!!

  32. Hello,

    I’ve submitted an opt out affidavit for my business. Does anyone know where I can find a private contract sample for NPs online or can I create my own as long as it has all the required elements?


  33. Hi Barbara, I am a physician who has opted out of Medicare and all patients sign a private contract. If I hire an NP does he/she also have to opt out separately? Would the contract that patients sign with me also cover him/her, or would patients have to sign a separate contract for each provider?

  34. Hi Barbara! Thank you for this very informative article, and please forgive me for arriving so late to the party! I am an FNP soon to be practicing in GA where I must do so with a collaborating physician agreement. My vision is to start a direct primary care practice and opt out of Medicare so that I can keep things as simple as possible. I will use a collaborating MD matching service and my question to you is: does my collaborating MD also need to be opted out of Medicare? I will own the business and see every patient myself, but under the powers delegated to me by my collaborating MD. What say you?

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