Opting Out of Medicare: How to Get Out and Stay Out

Physicians tin can cut ties with Medicare and privately contract with Medicare beneficiaries, but doing it incorrectly tin be costly.

Fam Pract Manag. 2017 Nov-December;24(6):17-xx.

Author disclosure: no relevant financial affiliations disclosed.

This content conforms to AAFP CME criteria. See FPM CME Quiz.

Commodity Sections

  • Introduction
  • The basics of Medicare participation
  • How to opt out
  • How to stay out
  • Opting out isn't uncomplicated
  • References

For many physicians, the administrative side of practicing medicine has grown increasingly circuitous in contempo 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 Fleck Reauthorization Act, and now the Quality Payment Program) require tracking more information, submitting more data, and working more closely with electronic wellness 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 accept remained stable despite the demands,1 but opting out remains a viable option for those who desire to set their ain fees free of Medicare's limiting charges and are prepared to navigate the complicated requirements. This article explains how.

The basics of Medicare participation

  • Abstract
  • The nuts of Medicare participation
  • How to opt out
  • How to stay out
  • Opting out isn't unproblematic
  • References

A physician who opts out of Medicare may ready his or her own fees merely may not submit claims to Medicare or receive any payment from Medicare. When the doc sees a Medicare beneficiary, the physician and patient must enter into a private contract (discussed below) that prevents either side from submitting any merits to Medicare for what would otherwise be a covered service. Opted-out physicians and their patients may not receive payments under Medicare Reward plans either.

Note that opting out differs from "non-participating" status. Non-participating physicians may accept Medicare assignments on a merits-past-merits ground. They are paid 95 percent of the fee schedule amount past Medicare for assigned claims. For unassigned claims, they can accuse their Medicare patients up to the "limiting charge," which is 115 percent of the Medicare-allowed corporeality for non-participating providers.

Just individuals may opt out of Medicare; a corporation cannot. As a practical matter, yet, if all the physicians or other providers in a grouping opt out individually, then the corporation volition have finer opted out.

Opting out applies to almost all settings in which a dr. treats Medicare patients, so physicians should carefully consider all arrangements in which their participation might be necessary. For example, if a physician moonlights equally 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 AND URGENT CARE

Providing emergency or urgent intendance to a Medicare beneficiary will non jeopardize the physician's opt-out status if he or she follows Medicare billing requirements, which are the aforementioned for both types of intendance. The opted-out physician can neb Medicare up to the limiting charge corporeality for the service and cannot bill the patient. The claim must be submitted with a "GJ" modifier, which indicates that the service involved emergency or urgent intendance provided by an opted-out medico. Notation that this modifier is necessary only when the patient does not already have a individual contract with the opted-out physician.

Medicare defines emergency services as inpatient and outpatient hospital care necessary to preclude death or serious impairment of health. Urgent care services are defined as care furnished inside 12 hours in gild to avoid the likely onset of an emergency medical condition.

How to opt out

  • Abstract
  • The basics of Medicare participation
  • How to opt out
  • How to stay out
  • Opting out isn't simple
  • References

Opting out requires a md to have 2 steps:

1. Submit an affidavit formally opting out of Medicare to any Medicare contractors that ordinarily process the physician's claims. Physicians currently participating in Medicare must file the affidavit at least thirty days before the next agenda quarter begins and include an constructive date of the first day of that calendar quarter (i.e., Jan. 1, April 1, July 1, or Oct. 1). The affidavit must see sure requirements, including the following (see the full list of requirements in the Medicare Benefit Policy Manual, Chapter 15, Department forty.9):

  • Be in writing and signed by the physician,

  • Contain the physician'southward full name, accost, phone number, and national provider identifier (NPI) or Revenue enhancement Identification Number if an NPI has non all the same been assigned – information that sufficiently identifies the physician so that a Medicare contractor can ensure that no payment is made to the physician during the opt-out period,

  • State that during the opt-out period the md will provide what would have been Medicare-covered services to Medicare beneficiaries only through private contracts, will not submit a claim to Medicare for those services, and will not allow any entity acting on the physician's behalf to submit a claim for those services.

Several Medicare contractors, such as Novitas, offering sample opt-out affidavits on their websites.

Each opt-out flow lasts 2 years. Nevertheless, afterward receiving the initial affidavit, the Centers for Medicare & Medicaid Services (CMS) will automatically renew it every two years unless the medico requests to cease the opt out at to the lowest degree 30 days before the start of the next two-year menstruum.

ii. After submitting the affidavit, the physician must enter into private contracts with Medicare patients. As with the affirmation, these contracts have specific requirements, including the following (run into the full list of requirements in the Medicare Benefit Policy Manual, Affiliate 15, Section 40.ten):

  • Be in writing and printed in a typeface large enough to ensure that the beneficiary can read information technology,

  • State that during the opt-out period the beneficiary or his or her legal representative accepts full responsibleness for paying the physician'southward charges.

Individual contracts must also state that the casher or legal representative understands the following:

  • Medicare payment limits exercise not use to what the physician may charge for items or services, and the beneficiary or his or her legal representative agrees non to submit a claim to Medicare or to enquire the physician to submit a claim to Medicare on the beneficiary's behalf,

  • Medicare payment will non be made for any items or services provided by the physician that would otherwise have been covered by Medicare,

  • The beneficiary has the right to obtain Medicare items and services from other physicians or providers who have not opted out, and the casher is not required to enter into individual contracts for Medicare covered services provided past other physicians or providers who have non opted out.

The private contract must also state the expected effective date and expiration engagement of the current opt-out menstruum. Information technology must be signed by the md and the beneficiary or the beneficiary'southward legal representative. The physician must retain an original re-create with the original signatures of both parties for the elapsing of the current opt-out catamenia. The contract must too be made available to CMS upon request.

The md must provide a copy of the contract to the beneficiary or the casher's legal representative before items or services are provided to the beneficiary nether the terms of the contract. Finally, the contract may non be entered into during a fourth dimension when the beneficiary requires emergency or urgent care services.

How to stay out

  • Abstract
  • The basics of Medicare participation
  • How to opt out
  • How to stay out
  • Opting out isn't simple
  • References

Physicians can voluntarily cease a Medicare opt out every bit described earlier. However, a physician's opt-out volition finish involuntarily if he or she fails to properly maintain information technology, such every bit in the following cases:

  • The doc knowingly and willfully submits a claim to Medicare during the opt-out menses, except for emergency and urgent care services,

  • An entity employing the physician submits a Medicare merits, and the physician is paid indirectly for the services,

  • The doctor fails to enter into an appropriate private contract with a beneficiary.

When a doc's opt-out status is considered nullified, so are all individual contracts with beneficiaries. This change has profound fiscal consequences for the physician. Failure to maintain an opt-out ways:

  • Medicare will not pay the physician or the beneficiary for the physician's services for the remainder of the opt-out period, and the dr. may collect only copays or deductibles from the beneficiary.

  • The physician must even so submit claims to Medicare, even though they will non exist paid.

  • The dr. is otherwise treated every bit "not-participating" by Medicare, although still subject to the restrictions above.

Lastly, the physician will not be able to opt out again until the expiration of the two-year opt-out period that was not maintained.

If the Medicare contractor discovers later the 2-year period has expired that the medico failed to maintain opt-out status, the contractor volition apply the above factors retroactively outset with the date of the failure through the date the opt-out flow ended. The dr. may be able to avoid many of these penalties by demonstrating a "practiced faith effort" to set up his or her mistakes inside 45 days of notice from the Medicare contractor or inside 45 days of the physician's discovery, whichever is earlier. Medicare's manuals describe a good faith attempt as including, but not being express to, refunding amounts collected in backlog of the limiting charge from beneficiaries who did not sign a individual contract with the doc.

Medicare contractors will ask if the failure to maintain opt-out status involved providing emergency or urgent care service, which must be supported by documentation, or if the md's employer filed a claim in fault. If the claim was filed in fault, the contractor will enquire the medico to explicate whether the filing was an isolated incident or a problem affecting multiple claims. In cases of system error, the contractor also will ask what steps the md has taken to correct the problem.

Contractors more often than not do not consider claims submitted by a beneficiary to exist a failure by the physician to maintain opt-out status and volition not nullify the contract with the beneficiary on this footing. Withal, if a substantial number of claims are submitted in error, the Medicare contractor will investigate to ensure that the physician has advisable contracts with the beneficiaries.

Opting out isn't simple

  • Abstract
  • The basics of Medicare participation
  • How to opt out
  • How to stay out
  • Opting out isn't uncomplicated
  • References

Opting out of Medicare can be a complicated, detailed process. Nevertheless, for physicians who are tired of navigating the Byzantine billing rules of Medicare, opting out allows them to ignore those rules and essentially operate on a "cash paying" basis with Medicare beneficiaries. But once out, physicians must carefully maintain that status or face being thrust back into the system – and under much less favorable terms.

To run into the full commodity, log in or purchase access.

Virtually the Writer

Daniel Shay is an associate at the law firm of Alice Chiliad. Gosfield & Associates in Philadelphia.

Author disclosure: no relevant financial affiliations disclosed.

Reference

i. Martin S. AAFP member survey provides valuable perspective. In The Trenches. August 2017. http://fleck.ly/2wBK0fx. Accessed Aug. 22, 2017.

Copyright © 2017 by the American Academy of Family Physicians.
This content is owned past the AAFP. A person viewing information technology online may make one printout of the material and may employ that printout only for his or her personal, non-commercial reference. This material may not otherwise exist downloaded, copied, printed, stored, transmitted or reproduced in any medium, whether now known or subsequently invented, except equally authorized in writing past the AAFP. Contact fpmserv@aafp.org for copyright questions and/or permission requests.

Nigh RECENT Issue

FPM Due east-Newsletter

Sign upward to receive FPM's free, weekly due east-newsletter, "Quick Tips & Insights."

Sign Upwardly Now