Opting Out of Medicare
A physician or practitioner may opt out of Medicare and enter into private contracts with Medicare beneficiaries. When a provider opts out of Medicare, no services provided by that individual are covered by Medicare and no payment can be made to the physician or practitioner or to beneficiaries except for services provided in an emergency/urgent care situation (see guidelines below). Only individual providers may opt out of Medicare. Group practices and organizations may not opt out.
A private contract is a contract between a Medicare beneficiary and a provider who has opted out of Medicare for all covered items and services furnished to Medicare beneficiaries. The beneficiary agrees to give up Medicare payment for services furnished by the provider and to pay the provider without regard to any limits that would otherwise apply to what the provider could charge.
The private contract must:
- Be in writing and in print sufficiently large to ensure that the beneficiary is able to read the contract.
- Clearly state whether the physician/practitioner is excluded from Medicare under Sections 1128, 1156, or 1892 of the Social Security Act..
- State that the beneficiary or the beneficiary's legal representative accepts full responsibility for payment of the physician's or practitioner's charge for all services furnished by the physician/practitioner.
- State that the beneficiary or his/her legal representative understands that Medicare limits do not apply to what the physician/practitioner may charge for items or services furnished by the physician/practitioner.
- State that the beneficiary or his/her legal representative agrees not to submit a claim to Medicare or to ask the physician/practitioner to submit a claim to Medicare.
- State that the beneficiary or his/her legal representative understands that Medicare payment will not be made for any items or services furnished by the physician/practitioner that would have otherwise been covered by Medicare if there was no private contract and a proper Medicare claim had been submitted.
- State that the beneficiary or legal representative enters into the contract with the knowledge that he or she has the right to obtain Medicare-covered items and services from physicians and practitioners who have not opted out of Medicare, and that the beneficiary is not compelled to enter into private contracts apply to Medicare-covered services furnished by other physicians or practitioners who have not opted out.
- State the expected or known effective date and expected or known expiration date of the opt out period. Note: Effective with affidavits signed after June 16, 2015, opt out providers will automatically renew every two-year period.
- State that the beneficiary or his/her legal representative understands that Medigap plans do not, and that other supplemental plans may elect not to, make payments for items and services not paid for by Medicare.
- Be signed by the beneficiary or his/her legal representative and by the physician/practitioner prior to any services provided under the contract's terms.
- Not be entered into by the beneficiary or by the beneficiary's legal representative during a time when the beneficiary requires emergency care services or urgent care services.
- Be provided (a photocopy is permissible) to the beneficiary or to his/her legal representative before items or services are furnished to the beneficiary under the terms of the contract.
- Be retained (original signatures of both parties required) by the physician/practitioner for the duration of the opt out period.
- Be made available to the Centers for Medicare & Medicaid Services (CMS) upon request.
- Be entered into for each opt out period.
The provider should not submit a copy of the private contract to WPS; the provider is responsible for keeping this information on file.
Medicare will pay for covered, medically necessary services ordered by an opt out provider, but only if the provider has a National Provider Identifier (NPI) and if the services are furnished by a provider who has not opted out. For example, if an opt out provider admits a beneficiary to a hospital, Medicare will reimburse the hospital for medically necessary care. Similarly, if an opt out provider orders diagnostic tests to be performed by another provider, who has not opted out, that provider may submit a claim to the Medicare program for those services.
Opt Out Affidavits
In order to opt out of Medicare, a provider must file a valid opt out affidavit with the WPS Provider Enrollment Department no later than ten days after the first private contract is entered into with a Medicare beneficiary.
Note that a provider cannot choose to opt out of Medicare for some Medicare beneficiaries but not others, or for some services but not others. Opt out status applies to all items or services the provider furnishes to Medicare beneficiaries regardless of the location where they are furnished.
A valid opt out affidavit must:
- Be in writing and be signed by the physician/practitioner.
- Contain the physician's or practitioner's full name, address, telephone number, specialty, National Provider Identifier (NPI), Medicare Provider Transaction Number(s) (PTAN), if assigned, and Social Security Number (required if the provider does not have an NPI).
- State that except for emergency or urgent care services the physician/practitioner will provide services to Medicare beneficiaries during the opt out period only through private contracts that meet the criteria for private contracts, for services that would have been Medicare-covered services but for their provision under a private contract.
- State that the physician/practitioner will not submit a claim to Medicare for any service furnished to a Medicare beneficiary during the opt out period, nor will the physician/practitioner permit any entity acting on his/her behalf to submit a claim to Medicare for services furnished to a Medicare beneficiary, except for emergency and urgent care services provided to a Medicare beneficiary with whom he or she has not signed a private contract.
- State that, during the opt out period, the physician/practitioner understands that he/she may receive no direct or indirect Medicare payment for services that he/she furnishes to Medicare beneficiaries with whom he/she has privately contracted, whether as an individual, an employee of an organization, a partner in a partnership, under a reassignment of benefits, or as payment for a service furnished to a Medicare beneficiary under a Medicare+Choice plan.
- State that a physician/practitioner who opts out of Medicare acknowledges that, during the opt out period, his/her services are not covered under Medicare and that no Medicare payment may be made to any entity for his/her services, directly or on a capitated basis.
- State a promise by the physician/practitioner to the effect that, during the opt out period, the physician/practitioner agrees to be bound by the terms of both the affidavit and the private contracts that he/she has entered into.
- Acknowledge that the physician/practitioner recognizes that the terms of the affidavit apply to all Medicare-covered items and services furnished to Medicare beneficiaries by the physician/practitioner during the opt out period (except for emergency or urgent care services furnished to the beneficiaries with whom he/she has not previously privately contracted) without regard to any payment arrangements the physician/practitioner may make.
- With respect to a physician/practitioner who has signed a Part B participation agreement, acknowledge that such agreement terminates on the effective date of the affidavit.
- Acknowledge that the physician/practitioner understands that a beneficiary who has not entered into a private contract and who requires emergency or urgent care services may not be asked to enter into a private contract with respect to receiving such services and that the rules for emergency and urgent care apply if the physician/practitioner furnishes such services.
- Identify the physician/practitioner sufficiently so that the Medicare contractor can ensure that no payment is made to the physician/practitioner during the opt out period.
- Be filed with all carriers who have jurisdiction over claims the physician/practitioner would otherwise file with Medicare and be filed no later than 10 days after the first private contract to which the affidavit applies is entered into.
Effective Date of Opt Out for Non-Participating Providers
Non-participating providers can opt out at any time by filing a valid opt out affidavit. The effective date of the opt out period will be the date specified in the affidavit but cannot be retroactive to a date prior to the date the affidavit is signed; if there is no designated effective date, it the effective date will be the date the affidavit was signed.
Effective Date of Opt Out for Participating Providers
Participating providers can opt out if they file a valid opt out affidavit that is received by the WPS Provider Enrollment Department at least 30 days before the first day of the next calendar quarter. The effective date of the "opt out" opt out period is the first day in that quarter (1/1, 4/1, 7/1, or 10/1). Opt out providers may not provide services under private contracts with beneficiaries earlier than the effective date of the affidavit.
Participating providers who opt out of Medicare also terminate their Medicare participation agreement on the effective date of opt out, since they no longer agree to accept assignment on claims for all services furnished to Medicare beneficiaries. They will be considered non-participating for any emergency/urgent care services that are paid during the opt out period.
Renewal of Opt Out
The private contracting/opt out law at section 1802(b) of the Social Security Act (the Act), section 106(a) of the Medicare Access and CHIP Reauthorization Action of 2015 (MACRA) (public Law No. 114-10) indicates that valid opt out affidavits signed on or after June 16, 2015, automatically renew every two years. Physician and practitioners who file valid opt out affidavits effective on or after June 16, 2015, and do not wish to extend their opt out status at the end of a two year opt out period, may cancel by notifying all Medicare contractors with which they filed an affidavit in writing, at least 30 days prior to the start of the next two year opt out period.
Early Termination of Opt Out
After an opt out affidavit has been approved, the provider's opt out status may be terminated within 90 days of the effective date of the affidavit if the provider meets the following criteria. The provider must:
- Not have previously opted out of Medicare.
- Notify all Medicare contractors, with which an affidavit was filed, of the termination no later than 90 days after the effective date of the opt out period.
- Refund to each beneficiary, with whom there is a private contract, all payment collected in excess the Medicare limiting charge (in the case of physicians) or the deductible and coinsurance (in the case of practitioners).
- Notify all beneficiaries with whom there is a private contract of the decision to terminate opt out and of the beneficiaries' right to have claims filed with Medicare for services furnished between the effective date of the opt out and effective date of the termination of the opt out period.
Specialties That May Opt Out Of Medicare
- Doctors of medicine;
- Doctors of osteopathy;
- Doctors of dental surgery or dental medicine;
- Doctors of podiatric medicine;
- Doctors of optometry;
- Physician assistants;
- Nurse practitioners;
- Clinical nurse specialists;
- Certified registered nurse anesthetists (CRNAs);
- Certified nurse midwives;
- Clinical psychologists;
- Clinical social workers; and,
- Registered dieticians and nutrition professionals.
Specialties That May Not Opt Out of Medicare
- Physical therapists in private practice;
- Occupational therapists in private practice;
- Speech language pathologists in private practice;
- Anesthesiologist assistants; and,
- Independent, non-clinical psychologists.
Effect of Reassignment When a Provider Opts Out of Medicare
When a provider opts out of the Medicare program and is a member of a group practice or otherwise reassigns his or her right to bill and receive Medicare payment to an organization, the organization may no longer bill Medicare or receive Medicare payment for the services that the provider furnishes to Medicare beneficiaries. However, if the provider continues to grant the organization the right to bill and receive payment for the services he or she furnishes to patients, the organization may bill and be paid by the beneficiary for the services that are provided under the private contract. In addition, the decision of a provider to opt out of Medicare does not affect the ability of the group practice or organization to bill Medicare for the services of other providers who have not opted out of Medicare.
Emergency/Urgent Care Situations
In an emergency or urgent care situation, a provider may treat a Medicare beneficiary with whom he or she does not have a private contract and bill Medicare for such treatment. The provider may not charge the beneficiary more than the limiting charge and must submit a claim to Medicare on the beneficiary's behalf. Medicare payment will be made to the beneficiary for covered services in this situation if the claim is unassigned. In order to submit an assigned claim and be paid directly by Medicare for such services, the opt out provider would need to complete a CMS-855 enrollment form to apply for enrollment in the Medicare program. (This would not affect the provider's opt out status for purposes of other services.)
Opt out providers use Modifier GJ with the procedure code to identify services that were emergency or urgent when there was no private contract in effect with the beneficiary at the time the services were performed.
Mandatory Claims Submission
Provisions regarding mandatory claims submission do not apply once a provider signs and submits an opt out affidavit to the contractor for the duration of the opt out period, unless the provider knowingly and willfully violates a term of the affidavit.
Opt Out Affidavit Form
A Medicare Opt Out Affidavit form is available on the Provider Enrollment Forms web page. Select the Forms tab in the top navigation, then Provider Enrollment.