With the passage of the federal healthcare reform law and the increasing number of audits that the Centers for Medicare and Medicaid Services will be conducting, it may be time to consider opting out of Medicare, but be sure to first know your options.
With the passage of the federal healthcare reform law and the increasing number of audits that the Centers for Medicare and Medicaid Services (CMS) will be conducting, is it time to consider opting out of Medicare? To answer that question and address any applicable legal issues related to it, you first must know your options.
Participating provider. If you are a participating provider with Medicare, as are most physicians, you can accept assignment and receive payments directly from CMS.
Non-participating status. An alternative to participating status is non-participating status. An advantage of non-participating status is that you can charge your patients additional fees, up to the Medicare limiting charge. CMS, however, will reduce the amount it pays you directly by 5 percent and, except on a case-by-case basis, forbid you from accepting assignment. Your patients covered by Medicare will receive the check from CMS for your services, and you will have to rely on them either to endorse the check over to you or to pay you directly for the care you rendered.
Changing from participating to non-participating status will not eliminate the ability of the government to audit your charges. As long as your bill is submitted to Medicare from any source, you are subject to an audit (to read more about the CMS Recovery Audit Contractor program, see memag.com/MC050710).
Opting out. A third option is to completely opt out of Medicare. If you opt out, neither you nor your patients will receive any Medicare reimbursement. No audits should occur, but compliance issues still can exist regarding the complicated opt-out requirements.
If you opt out, you will not be required to submit claims to Medicare on behalf of your patients, and you will not be restricted to the limits on charges for Medicare-covered services. You cannot opt out selectively, however. If you opt out, even for one patient, then you will have elected to completely opt out for two years.
If you opt out but still want to treat Medicare beneficiaries, you must enter into private contracts with them. These contracts require the patients to agree to give up CMS coverage for services furnished by you and to pay you without regard to any limits that otherwise would have applied to what you could charge.
In part, these private contracts must be in writing, be signed by the beneficiary and you, and state:
whether you are excluded from Medicare under certain provisions of the Social Security Act;
that the beneficiary (or legal representative) accepts full responsibility for payment of your charges;
that the beneficiary understands that Medicare limiting charges do not apply to what you may charge for items or services provided;
that the beneficiary agrees not to submit a claim to Medicare or ask you to submit a claim to Medicare;
that the beneficiary understands that Medicare payment will not be made for any items or services furnished by you that otherwise would have been covered by Medicare if no private contract existed; and
that the beneficiary enters into the contract knowing that he or she has the right to obtain Medicare-covered items and services from physicians who have not opted out of Medicare, and that the beneficiary is not compelled to enter into private contracts that apply to other Medicare-covered services furnished by other physicians or practitioners who have opted out.
You also must file an affidavit notifying all Medicare carriers to which you would submit claims, advising each that you have opted out.
If, after careful consideration, you decide to opt out of Medicare, contact a healthcare attorney to address all of the very specific requirements necessary to effectuate your decision.
The author is a Medical Economics editorial consultant and principal in the healthcare law firm of Kern Augustine Conroy & Schoppmann PC, with offices in New Jersey, New York, and Pennsylvania, and affiliates in Florida and Illinois. Malpractice Consult deals with questions on common professional liability issues. Unfortunately, we cannot offer specific legal advice. If you have a general question or a topic you would like to see covered, send it to firstname.lastname@example.org.