Is Medicare Opt-Out Right for Your Practice?

As Medicare reimbursement continues to decrease while the administrative burden of accepting Medicare only increases, many physician practices and other healthcare professionals are left wondering if there is a better, more efficient way to serve their patients. Add in Medicare’s endless regulatory changes, intrusive and poorly-conducted audits, and arbitrary enforcement actions, and a practice’s decision to take Medicare can quickly become more trouble than it is worth.

A possible solution may be to turn back the clock and return healthcare to a matter between the physician and the patient, without an insurance company or government agency intruding on that relationship and attempting to direct treatment through its power over reimbursement. While accepting payments directly from patients can avoid many of the obstacles presented by billing third-party payors, it is not a decision that should be taken lightly or haphazardly, especially where Medicare is involved.

In general, healthcare providers that furnish Medicare-covered items or services to Medicare-eligible patients are required to submit claims for those services to the Medicare program. A practice that charges cash to Medicare patients for Medicare-covered services may be in violation of federal law for doing so, unless the practice has “opted out” of Medicare. Medicare “opt out” is the process by which a physician or practitioner formally withdraws from participation in the Medicare program and establishes private contracts with patients to furnish items or services that would otherwise be covered by Medicare. The opt-out itself requires a specific regulatory filing, and the private contracts with patients are also required to meet certain criteria. Not all healthcare provider types have the ability to opt out, and once a provider opts out of Medicare, it can be difficult to undo or reverse the opt out.

While the formalities of opting out of Medicare are complex, often more important and more complex are the practical implications on a practice or business model. How does opt-out affect other physicians in the practice, or the opted-out physician’s relationship with other payors? What about items or services ordered by the opted-out physician, or provided “incident to” their services? The answers to these and other questions are as complex and varied as practice models and patient populations. Certainly, Medicare opt-out or other “concierge” business practices are not viable or appropriate in all circumstances. But for some practices, these options can offer meaningful solutions to the obstacles and frustrations inherent in accepting reimbursement from third-party payors, including Medicare.

For over 40 years, Wachler & Associates has represented healthcare providers and suppliers nationwide in a variety of health law matters, and our attorneys can assist providers and suppliers in understanding new developments in healthcare law and regulation. If you or your healthcare entity has any questions pertaining to Medicare opt-out or healthcare compliance, please contact an experienced healthcare attorney at 248-544-0888 or wapc@wachler.com