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Opting Out of Medicare: A Guide for Physicians

It is simple to opt out of Medicare – far simpler than staying in the Medicare program. Thousands of physicians have already opted out, and we have not heard a single regret by any of these physicians. Medicare endangers seniors, rations care and punishes the best doctors whose only aim is to give the best care. For the sake of patients and integrity of the profession, doctors should get out of Medicare.

A silver lining in the Medicare Access and CHIP Reauthorization Act of 2015. which was signed into law in mid-April 2015 to repeal the sustainable growth rate (SGR), is a provision in the bill that also repeals the irritating requirement of having to renew an opt-out status every two years. Physicians opting out of Medicare after June 16, 2015 will need to file an affidavit to opt out of Medicare only once, and it will have permanent effect. The physician will no longer need to renew his opt-out every two years thereafter. However patients will still need to sign a private contract every two-years.

Scroll to bottom of page for more links to opt-out resources

Once CMS unleashes its dreaded new program of “private auditors” to shake down physicians in the Medicare program, far more physicians will likely opt out – and even more will wish they had.

We have prepared this “How To” guide for your benefit. These suggestions do not constitute legal advice – please consult an attorney for any legal issues or questions.

IF YOU ARE A Medicare NON-PARTICIPATING (NON-PAR) PHYSICIAN, then opting out is as follows (and if non-par, the status takes effect the date you sign the affidavit):

(Medicare Participating (PAR) Physicians Scroll down for instructions. Participating physicians’ opt out status only becomes effective at the beginning of a calendar quarter, when the affidavit is sent in at least 30 days before the first day of the quarter. If an employer or clinic is billing Medicare for your services, then be careful about when you opt out of Medicare.  You will first need to confirm whether you are participating (“par”) or non-participating (“non-par”) in Medicare before determining the proper timing for your opt out.  If you are “par,” then you will need to deliver your opt out affidavit to the carrier at least 30 days before the start of the next quarter.  If you are “non-par,” then your opt out is effective immediately when you sign the affidavit, and neither your nor your employer will be reimbursed by Medicare for your services rendered after that date.)

Step One: Notify your patients that you are opting out of Medicare.

Step Two: File a copy of the following affidavit with proof of delivery (such as certified mail, return receipt requested) that you keep in your records along with a copy of your opt out affidavit, by sending your affidavit to “each carrier that has jurisdiction over the claims that the physician or practitioner would otherwise file with Medicare,” no later than 10 days after entering into first private contract. (quoting CMS Qs and As on Private Contracts, #10). The addresses will vary depending on the region of the country in which you practice. Click here for a list of Medicare carriers by state. Include a cover letter requesting that the carrier acknowledge – in writing – that the opt out was properly accomplished.

[NOTES: 1) Many Medicare Part B carriers encourage physicians to use the affidavit template available on their websites. See link to list of carriers by state above. Although you are technically not required to use their form, things may go more smoothly if you do. 2) If you wish for items you order (like DME or tests) to be covered by Medicare, be sure to include your NPI, Social Security #, and date of birth, on the affidavit to help ensure you are included in the PECOS ordering and referring file. Some opt-out forms specifically ask whether you intend to order and refer. Answer YES if you intend to do so and want Medicare to cover payment for items and services you order.]

The affidavit should be equivalent to the following: [NOTE: The below affidavit is for use by physicians filing the affidavit on or after June 16, 2015. This updated affidavit reflects the change made by H.R. 2 (MACRA) to remove the requirement for re-opting out every two years.]

I, ______, declare under penalty of perjury that the following is true and correct to the best of my knowledge, information, and belief:

1. I am a physician licensed to practice medicine in the state of ______. My address is at _________, my telephone number is _________, and my [national provider identifier (NPI) or billing number, if one has been assigned, uniform provider identification number (UPIN) if one has been assigned, or, if neither an NPI nor a UPIN has been assigned, my tax identification number (TIN)] is _________. I promise that, for a period of two years beginning on the date that this affidavit is signed (the “Opt-Out Period”) and continuing indefinitely with automatic extensions of the 2-year opt out period unless terminated by me as allowed by Title 1 Section 106(a)(1) Medicare Access and CHIP Reauthorization Act of 2015, I will be bound by the terms of both this affidavit and the private contracts that I enter into pursuant to this affidavit. [NOTE: Your personal UPIN number must be used, not a corporate UPIN number. Persons opt out, not corporations.]

2. I have entered or intend to enter into a private contract with a patient who is a beneficiary of Medicare (“Medicare Beneficiary”) pursuant to Section 4507 of the Balanced Budget Act of 1997 for the provision of medical services covered by Medicare Part B. Regardless of any payment arrangements I may make, this affidavit applies to all Medicare-covered items and services that I furnish to Medicare Beneficiaries during the Opt-Out period, except for emergency or urgent care services furnished to Beneficiaries with whom I had not previously privately contracted. I will not ask a Medicare Beneficiary who has not entered into a private contract and who requires emergency or urgent care services to enter into a private contract with respect to receiving such services, and I will comply with 42 C.F.R. § 405.440 for such services.

3. I hereby confirm that I will not submit, nor permit any entity acting on my behalf to submit, a claim to Medicare for any Medicare Part B item or service provided to any Medicare Beneficiary during the Opt-Out Period, except for items or services provided in an emergency or urgent care situation for which I am required to submit a claim under Medicare on behalf of a Medicare Beneficiary, and I will provide Medicare-covered services to Medicare Beneficiaries only through private contracts that satisfy 42 C.F.R. § 405.415 for such services.

4. I hereby confirm that I will not receive any direct or indirect Medicare payment for Medicare Part B items or services that I furnish to Medicare Beneficiaries with whom I have 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, during the Opt-Out Period, except for items or services provided in an emergency or urgent care situation. I acknowledge that, during the Opt-Out Period, my services are not covered under Medicare Part B and that no Medicare Part B payment may be made to any entity for my services, directly or on a capitated basis, except for items or services provided in an emergency or urgent care situation.

5. A copy of this affidavit is being filed with [the name of each local Medicare carrier], the designated agent of the Secretary of the Department of Health and Human Services, no later than 10 days after the first contract to which this affidavit applies is entered into. [FOR PARTICIPATING PHYSICIANS ONLY: My Medicare Part B Participation agreement terminates on the effective date of this affidavit.]

Executed on [date] by [Physician name]
[Physician signature]
[NPI, Social Security #, and date of birth, if you wish to be included in Medicare ordering and referring list]

Step Three: Enter into a private contract for, and prior to, rendering any covered services to a Medicare Part B Beneficiary. (CMS requires the patient re-execute the agreement for each two-year opt out period.)

A sample contract recommended by a Medicare Administrative Contractor, Noridian, is available at:

https://med.noridianmedicare.com/documents/10525/2052366/Opt-Out+Private+Contract

Such private contract should include the following:

This agreement is between Dr. __________ (“Physician”), whose principal place of business is _____________, and patient ____________ (“Patient”), who resides at __________ and is a Medicare Part B beneficiary seeking services covered under Medicare Part B pursuant to Section 4507 of the Balanced Budget Act of 1997. The Physician has informed Patient that Physician has opted out of the Medicare program. The expected or known effective date and expected or known expiration date of the current opt-out period is _______________(effective date) and _______________(expiration date). The Physician’s opt out status auto-renews every two years unless terminated prior to the renewal date.

The Physician is not excluded from participating in Medicare Part B under Sections 1128, 1156, or 1892 or any other section of the Social Security Act.

Physician agrees to provide the following medical services to Patient (the “Services”):

[LIST ALL THE SERVICES HERE]

In exchange for the Services, the Patient agrees to make payments to Physician pursuant to the Attached Fee Schedule.
Patient also agrees, understands and expressly acknowledges the following:

  • Patient agrees not to submit a claim (or to request that Physician submit a claim) to the Medicare program with respect to the Services, even if covered by Medicare Part B.
  • Patient is not currently in an emergency or urgent health care situation.
  • Patient acknowledges that neither Medicare’s fee limitations nor any other Medicare reimbursement regulations apply to charges for the Services.
  • Patient acknowledges that Medi-Gap plans will not provide payment or reimbursement for the Services because payment is not made under the Medicare program, and other supplemental insurance plans may likewise deny reimbursement.
  • Patient acknowledges that he has a right, as a Medicare beneficiary, to obtain Medicare-covered items and services from physicians and practitioners who have not opted-out of Medicare, and that the patient is not compelled to enter into private contracts that apply to other Medicare-covered services furnished by other physicians or practitioners who have not opted-out.
  • Patient agrees to be responsible, whether through insurance or otherwise, to make payment in full for the Services, and acknowledges that Physician will not submit a Medicare claim for the Services and that no Medicare reimbursement will be provided.
  • Patient understands that Medicare payment will not be made for any items or services furnished by the physician that would have otherwise been covered by Medicare if there were no private contract and a proper Medicare claim were submitted.
  • Patient acknowledges that a copy of this contract has been made available to him.

    [Optional:

  • Patient agrees to reimburse Physician for any costs and reasonable attorneys’ fees that result from violation of this Agreement by Patient or his beneficiaries.]

Executed on [date] by [Patient name] and [Physician name] [Patient signature] [Physician signature]

[*NOTE to physicians: Do physicians, who have permanently opted out of Medicare, need to get patients to sign new private contract every 2 years? After MACRA passed, CMS initially told AAPS that patients would only have to sign contracts one time. However the most recent CMS manual states that new contracts will have to be obtained every two years. We are asking CMS to reverse this policy, pointing out that it violates the intent of Sec. 106(a) of MACRA, which was to reduce needless bureaucracy every 2 years, and is not required by statute.]

Step Four: Install procedures to ensure that your office never files a Medicare claim, and never provides information to a patient that enables him to file a Medicare claim. The two exceptions – for emergency or urgent care and for covered services that Medicare would deem unnecessary – should be used with caution.

Step Five: Reduce the substantial overhead costs resultant from participating in the Medicare program and being subjected to the Medicare-inspired audits and threats. Then celebrate: you can now spend your time serving patients rather than catering to and being controlled by the government.

Step Six: Mark your calendar to have Medicare patients re-sign a new private contract every two year’s on the anniversary of your opt out effective date. While Physicians opting out on or after June 16, 2015 will no longer need to renew their opt out every two years, CMS currently still requires patients to renew the private contract every two years.

IF YOU ARE A PARTICIPATING PHYSICIAN, then opting out is as follows:

Step One: In the words of CMS, “Participating physicians and practitioners may opt out if they file an affidavit that meets the criteria and which is received by the carrier at least 30 days before the first day of the next calendar quarter showing an effective date of the first day in that quarter (i.e., January 1, April 1, July 1,October 1).” [From CMS Benefit Policy Manual (Rev. 147, 08-26-11) Sec. 40.17] Note that a participating physician must give his or her carrier 30-days’ prior notice by sending in the opt-out affidavit with an effective date of the beginning of the next quarter.

Subsequent Steps: Follow the above Steps One through Six for a non-participating physician, except that the physician may not provide private contracting services until the first date of the next quarter that is at least 30 days after receipt of the notice by the carrier. For example, the carrier must receive the notice from the physician by Sept. 1 if the physician seeks to provide private contracting services beginning on Oct. 1.

Other Information:

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