By: Susan St. John
As noted in Opting Out of Medicare Part I, opting out of Medicare may be an option for some physicians and practitioners. After determining whether you are eligible for opt-out or if it is financially feasible, there are a few other considerations. Part I discussed the Private Contract a physician must enter into with each Medicare beneficiary he or she treats; here, we will address the opt-out affidavit and other nuances of opting out. Let’s get started!
The Medicare Opt Out Affidavit
Provisions in an Opt Out Affidavit are similar to provisions that must be included in the opted out physician’s or practitioner’s private contract with Medicare beneficiaries. The opt-out affidavit must state that the physician or practitioner will only provide services to Medicare beneficiaries with whom they have a written and signed private contract and that the physician or practitioner will not submit claims to Medicare on behalf of Medicare beneficiaries. Medicare does allow for an exception here, but that is only when an opted out physician or practitioner treats a Medicare beneficiary who is not under private contract, and that beneficiary presents with a medical emergency or urgent care problem. Keep in mind, that if a Medicare beneficiary presents with a medical emergency or urgent care problem, the physician or practitioner cannot require that patient to sign a private contract at that time.
The Opt Out Affidavit must also provide that the opted out physician’s or practitioner’s services are not covered by Medicare, and that both the opt out affidavit and private contracts with beneficiaries are binding on the opted out physician. The Opt Out Affidavit must clearly identify the physician or practitioner (full name, contact information, NPI, billing number or tax id).
The Opt Out Affidavit must also provide that the physician will not receive any payment from Medicare, either directly or indirectly, for covered services rendered to Medicare beneficiaries. So, what exactly does this mean. Understanding direct payment from Medicare is easy – the physician or practitioner submits a claim and Medicare, or Medicare Advantage pays the physician or practitioner. Under opt out, the physician or practitioner may not submit claims and no one else may submit a claim to Medicare or a Medicare Advantage Plan on behalf of the opted out physician or practitioner, not even the beneficiary.
So, what does “indirect” payment mean? Indirect payment might be in the form of salary or profit share as a partner or owner. The opted out physician or practitioner cannot receive indirect payment from Medicare by virtue of being an employee, a partner in an organization (or member or owner), or under reassignment of benefits. If the opted out physician or practitioner is part of a group practice or has assigned his rights to Medicare payment to any entity, the group practice or entity may not bill Medicare or receive payments from Medicare (or Medicare Advantage) for services provided by the opted-out physician or practitioner. The practice or entity may bill and collect from a Medicare beneficiary that is under private contract with the opted-out physician or practitioner.
What if the opted out physician or practitioner is a partner or co-owner of a group practice or entity that provides services to Medicare beneficiaries and bills the Medicare program? As a partner or co-owner, overall profit, derived from patient revenues including Medicare payments, would allocate over to the partner or co-owner. This would also be an “indirect” payment. Does that mean the opted-out physician or practitioner must divest the ownership interest? Perhaps; unless the opted-out physician’s or practitioner’s share in revenue was adjusted to carve out all payments received from Medicare for services and items provided to Medicare beneficiaries by the group or entity.
When Does Medicare Opt Out Start and When Does Part B Participation End?
For a non-participating physician or practitioner, opt out can be at any time. In this case, the opt out affidavit must be filled with all MACs having jurisdiction over the physician’s or practitioner’s services within 10 days after the opted out physician or practitioner signs his/her first private contract with a Medicare beneficiary. Opt out begins on the date the affidavit is signed, and that date must be prior to signing the first private contract.
For a participating physician or practitioner, opt out cannot begin until the first day of a calendar quarter after a proper 30-day notice has been provided to all MACs having jurisdiction over the physician or practitioner. Thirty-day notice is the opt out affidavit itself and should be accompanied by a brief cover letter.
Opt out is good for a period of two years and automatically renews unless automatic renewal is cancelled 30 days prior to the start of the next renewal date.
An opt out may be terminated early by a physician or practitioner within 90 days of his/her first opt out period. Subsequent opt out periods may not be terminated early.
Part B participation ends on the effective date of the opt out affidavit.
What if Medicare Opt Out Fails?
Opt out will fail if the private contract with a Medicare beneficiary is entered into prior to the effective date of the opt out. If the opt out is improper, for example the affidavit does not included all the required provisions or a private contract was signed before the effective date of the opt out, the opt out fails and the private contract will be considered null and void. The physician or practitioner will bear the burden of submitting claims to Medicare for all beneficiaries under private contract whose contract would be considered null and void due to improper opt out. In addition, the physician or practitioner must reimburse all beneficiaries with a private contract net of deductibles or coinsurance due from the beneficiary.
Do Not Go Medicare Opt Out Alone.
Opting out is complex with many mandatory requirements. Private contracts and opt out affidavits must contain certain mandatory requirements. Opt out affidavits, i.e., notice, must be submitted timely to be effective and private contracts cannot be entered into until after opt out is effective. If you are considering opting out, seek counsel for assistance in preparing your opt out affidavit and private contract forms. Do not go it alone!