What Psychiatrists Need to Know: Opting Out of Medicare

The NCPA office frequently receives questions from members who want to opt out of Medicare, but don’t know how or who have opted out and aren’t sure if they have done so correctly. When opting out of Medicare, a physician agrees to forgo treating Medicare patients (barring an emergency or urgent situation), unless the patient and physician have entered into a private contract.

For nearly 20 years, physicians have had the option to opt out of Medicare, instead choosing to treat Medicare patients under private contracts that allow for individualized fee schedules. Opting out of Medicare is a two-year commitment and comes with specific requirements that must be met and maintained; this action should be carefully considered prior to filing the necessary paperwork as it is not an appropriate option for many doctors. For example, physicians who work in a setting(s) where treating Medicare patients is part of their employment, should not opt out. Further, if there is a possibility for significant employment changes in the next two years, requiring the treatment of Medicare patients, opting out is probably not a good option.

The NCPA website, www.ncpsychiatry.org/medicare-resources, has in-depth Medicare resources, including affidavit and contract templates. The following general steps are necessary for opting out.*

Step 1: Notify Medicare of Opt-Out Status

• File an affidavit (here's a template) with Palmetto GBA (North Carolina’s Medicare Administrative Contractor, or MAC).
• As of June 16, 2015, when you opt out, that status will automatically renew every two years unless you inform the Medicare Administrative Contractor for your geographical area within 30 days before the next two-year period begins that you wish to change your status.
• Maintain affidavit on file in your office.

Step 2: Private Contracting

• Set up private contracts to continue treating Medicare patients (here's a template).
• Maintain private contracts on file in your office. Renew every two years.
• Do not submit any claims to Medicare.

*NOTICE AND DISCLAIMER: Opting out has serious implications for your status, rights, and responsibilities as a Medicare provider. The information contained herein doesn’t constitute legal advice nor should it be relied on exclusively. If you have any questions concerning these materials or opting out in general, please call the APA’s Practice Management HelpLine, 1-800-343-4671, or the NCPA office, 919-859-3370.

Essential Things to Know About Opting Out

• The first time you opt out of Medicare, there is a 90-day grace period during which you can change your mind about opting out. You just have to notify the Carriers you filed an opt-out affidavit with and refund any money you received from patients with whom you had private contracts that called for fees exceeding the Medicare approved charges.
  
• Once you opt out of Medicare, you cannot see any patients under Medicare.
• If you have been seeing Medicare patients, once you have opted out, they will only be able to continue seeing you under a private contract. This means any payments from them to you will be out of pocket. Not only will Medicare not reimburse for your services, neither will any supplemental Medigap policies your patients have. Other secondary policies may or may not continue to reimburse the patient—generally, if they do, for no more than they would have if you were still a Medicare provider.
• If you mistakenly file a claim with Medicare during your opt-out period, or your patient does, and you are contacted by the Carrier with a request for an explanation, you must be certain to respond within the time period allotted. Otherwise, your opt-out status will be rescinded, and you will no longer be able to do private contracting. If this happens, you will once again be tied to the laws of Medicare, but Medicare will not pay for any of your claims that occur during your original opt-out period.
• Patients who reach Medicare age but are still employed and covered by their employers’ insurance can choose not to enroll in Medicare Part B and will then not be Medicare beneficiaries for the purpose of their treatment by physicians.
• If a Medicare-eligible patient is covered under her employer’s insurance, but chooses to enroll in Medicare Part B so that Medicare will serve as the secondary payer, you must still have an opt out contract with this patient or you will be bound to the Medicare-allowed fees (even though Medicare is not the primary payer).
• When a Medicare beneficiary signs a private contract with one physician, it does not mean Medicare will not cover medical services provided to the same beneficiary by others who have not opted out. This means that if an opted out physician refers a patient to a lab to have blood work done, or to another specialist who has not opted out of Medicare, the services the patient receives as a result of the referral will be covered by Medicare (if they are services that Medicare ordinarily covers).