Notes on Opting Out of Medicare

• Do Not "Fail to Maintain Opt-Out." Remember to re-file your affidavit every two years. Otherwise, the opt-out will be nullified and all of the private contracts during that period deemed null and void. The physician may then have to file Medicare claims for services provided under voided contracts (63 FR 58814, 11/2/98; 42 C.F.R. §405.435).
• Opted-Out Physicians Can Engage in Certain Self Referrals. "[A] physician who opts out of the Medicare program and is not receiving any payments from the Medicare program is not bound by the limitations in section 1877 of the Act and, therefore, can refer to entities with which he or she has a financial relationship" (66 FR 856, 1/4/01). But check your plans with an attorney before engaging in such referrals.
• Physicians in Group Practice May Opt Out Individually. "[W]hen a group physician has opted out, it does not affect the ability of the rest of the group members to furnish and bill for services they furnish to Medicare beneficiaries.... [H]owever, ... when a group physician has opted out, the group may not bill in its own name for services provided by the opt-out physician under a private contract...." (66 FR 856, 1/4/01).
• Opted-Out Physicians May Order Medicare-Covered Services for Beneficiaries. "The physician or practitioner who has not been excluded under sections 1128, 1156, or 1892 of the Social Security Act may order, certify the need for, or refer a beneficiary for Medicare-covered items and services, provided the physician...is not paid, directly or indirectly, for such services (except as provided in §405.440 [regarding emergency and urgent care services])" (63 FR 58903-04, 11/2/98).
• Opted-Out Physicians May Bill Medicare for Emergency Services, or Privately Contract With Those Patients Beforehand. When a patient is in an emergency or urgent care situation, he is considered unable to consent to private contracting. Accordingly, an opted out physician may bill Medicare for services rendered to such patient. "A physician or practitioner who has opted-out of Medicare under this subpart need not enter into a private contract to furnish emergency care services or urgent care services to a Medicare beneficiary. Accordingly, a physician or practitioner will not be determined to have failed to maintain opt-out if he or she furnishes emergency care services or urgent care services to a Medicare beneficiary with whom the physician or practitioner has not previously entered into a private contract, provided the physician or practitioner complies with the billing requirements specified in paragraph (b) of this section." 42 CFR § 405.440(a). Paragraph (b) specifies that the Medicare billing must include the proper coding of emergency or urgent care services, and that the physician must not collect more than the Medicare limiting charge. If, however, the physician had previously entered into a private contract with such patient "before the onset of the emergency medical condition or urgent medical condition," then the emergency or urgent care services should be provided pursuant to the terms of the private contract and are not subject to the Medicare limiting charge. 42 CFR § 405.440(c). (63 FR 58904, 11/2/98).
• Safe Harbor for Inadvertent Failure to Maintain Opt-Out. There is some flexibility for good faith failures by opted out physicians to obtain private contracts. "When a carrier notifies an opt-out physician or practitioner that he or she appears to have failed to maintain opt-out by not entering into a private contract, he or she may continue to opt-out if he or she makes good faith efforts at fixing the problem that led to the failure to maintain opt-out and notifies the carrier of these efforts within 45 days of the carrier notice. When a physician or practitioner appears to have failed to maintain opt-out by not entering into a private contract with a Medicare beneficiary (except in emergency or urgent care cases), these good faith efforts should include refunding amounts collected in excess of applicable charge limits (that is, limiting charge for physicians and deductible and coinsurance for practitioners) to beneficiaries. Where the physician or practitioner makes good faith efforts to correct the problem he or she would not be subject to the consequences of failing to maintain opt-out." (63 FR 58858, 11/2/98)