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Opt Out of Medicare

Opt out is a contract between a provider, beneficiary and Medicare where the provider or beneficiary does not file a claim to Medicare. The physician or practitioner bills the beneficiary directly and is not required to follow the fee-for-service charges determined by Medicare.

In order to opt-out, providers must submit an Opt Out Affidavit with Medicare and must keep a Private Contract with all beneficiaries on file for each two year period. Follow the below links to learn more about opting out.

Overview

There are, basically, three reasons why an individual provider may "opt out" of Medicare.
  1. To become eligible to order, certify and prescribe
  2. They prescribe Part D Prescriptions to Medicare Patient
  3. They do not wish to enroll in the Medicare program

To prescribe drugs covered by a Medicare Advantage plan, providers must enroll in Medicare. Providers eligible to prescribe Part D drugs and order/certify may submit the CMS 855O.

Providers who do not wish to enroll in the Medicare program, may opt-out. To "opt out" means a beneficiary pays a physician out-of-pocket and no one is reimbursed by Medicare. See table below for provider types who may or may not opt out. If a provider is able to opt out, they must:

  • Submit an Opt-Out Affidavit expressing his/her decision to opt-out
  • Sign private Medicare Opt-Out Private Contracts  
Providers Eligible to Opt Out Providers NOT Eligible to Opt Out
  • Doctors of medicine
  • Doctors of osteopathy
  • Doctors of dental surgery or dental medicine
  • Doctors of podiatric medicine
  • Doctors of optometry
  • Physician assistants
  • Nurse practitioners
  • Clinical nurse specialists
  • Certified registered nurse anesthetists
  • Certified nurse midwives
  • Clinical psychologists
  • Clinical social workers
  • Registered dieticians and nutrition professionals
  • Chiropractor
  • Anesthesiologist assistant
  • Speech Language Pathologist
  • Physical Therapists
  • Occupational Therapists
  • Any specialty not eligible to enroll in Medicare

 

Providers who opt out must beware of the below.

  • An Affidavit must be filed with all carriers who have jurisdiction over claims the physician/practitioner would otherwise file with Medicare.
  • The opt out period last two years.
  • All active Medicare enrollments will be terminated.
  • Opting out means you cannot be involved in any Medicare program; including original fee-for-service Medicare, Medicare Managed Care Plans, Medicare+Choice Plan and Medicare Advantage Plan.
  • Providers cannot be opt out for some services and not others, as well as some locations and not others.
  • No payment through Medicare with the exception of Emergency or Urgent Care services.

Renewal of Opt Out Status

Valid opt out affidavits signed on or after June 16, 2015, automatically renew every two years. Providers may cancel by notifying all Medicare contractors with which they filed an affidavit in writing, at least 30 days prior to the next two year opt out period. If an affidavit has not been signed and received by the Medicare contract on or before the June 16, 2015 date a new affidavit must be submitted to renew the opt out period.

Early Termination

A provider's opt out status may be voluntarily terminated within 90 days of the affidavit if a provider has not previously been in an opt out status.

Ordering, Certifying and Prescribing Status

A provider who has opted out of Medicare is eligible to order, certify and prescribe by supplying the required Social Security Number and NPI on the Opt Out Affidavit. If both elements are not supplied the provider will not be approved to order, certify and/or prescribe.

Affidavit

View below Affidavit example that may be used to complete the opt out process. A provider may also create their own.

All affidavits must have the following information.

  • Be in writing and be signed and dated by physician/practitioner
  • Contain physician's or practitioner's full name, address, telephone number, specialty, National Provider Identifier (NPI), if assigned, and Social Security Number (required if provider does not have an NPI and/or wishes to order, certify and/or Prescribe Part D drugs)
  • State that except for emergency or urgent care services the physician/practitioner will provide services to Medicare beneficiaries during opt out period only through private contracts that meet criteria for private contracts, for services that would have been Medicare-covered services but for their provision under a private contract
  • State that physician/practitioner will not submit a claim to Medicare for any service furnished to a Medicare beneficiary during opt out period, nor will physician/practitioner permit any entity acting on his/her behalf to submit a claim to Medicare for services furnished to a Medicare beneficiary, except for emergency and urgent care services provided to a Medicare beneficiary with whom he/she has not signed a private contract
  • State that, during opt out period, physician/practitioner understands that he/she may receive no direct or indirect Medicare payment for services that he/she furnishes to Medicare beneficiaries with whom he/she has 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
  • State that physician/practitioner who opts out of Medicare acknowledges that, during opt out period, his/her services are not covered under Medicare and that no Medicare payment may be made to any entity for his/her services, directly or on a capitated basis
  • State a promise by physician/practitioner to the effect that, during opt out period, physician/practitioner agrees to be bound by terms of both affidavit and private contracts that he/she has entered into
  • Acknowledge that physician/practitioner recognizes that terms of affidavit apply to all Medicare-covered items and services furnished to Medicare beneficiaries by physician/practitioner during opt out period (except for emergency or urgent care services furnished to beneficiaries with whom he/she has not previously privately contracted) without regard to any payment arrangements physician/practitioner may make
  • With respect to physician/practitioner who has signed a Part B participation agreement, acknowledge that such agreement terminates on affidavit effective date
  • Acknowledge that physician/practitioner understands that a beneficiary who has not entered into a private contract and who requires emergency or urgent care services may not be asked to enter into a private contract with respect to receiving such services and that rules for emergency and urgent care apply if physician/practitioner furnishes such services
  • Identify physician/practitioner sufficiently so that the Medicare contractor can ensure that no payment is made to physician/practitioner during opt out period
  • Be filed with all carriers who have jurisdiction over claims physician/practitioner would otherwise file with Medicare and be filed no later than 10 days after first private contract to which affidavit applies is entered into

Complete the affidavit and send it to Noridian using the state specific mailing address provided on the Mailing Addresses webpage.

Private Contract

View the below Private Contract example that may be used in a provider's office when seeing Medicare beneficiaries. A contract must be completed for each beneficiary and be kept on file for the two year period.

All private contracts must have the following information.

  • Be in writing and in print sufficiently large to ensure that beneficiary is able to read contract
  • Clearly state whether physician/practitioner is excluded from Medicare under Sections 1128, 1156, or 1892 of the Social Security Act
  • State that beneficiary or beneficiary's legal representative accepts full responsibility for payment of physician's or practitioner's charge for all services furnished by physician/practitioner
  • State that beneficiary or his/her legal representative understands that Medicare limits do not apply to what physician/practitioner may charge for items or services furnished by physician/practitioner
  • State that beneficiary or his/her legal representative agrees not to submit a claim to Medicare or to ask physician/practitioner to submit a claim to Medicare
  • State that beneficiary or his/her legal representative understands that Medicare payment will not be made for any items or services furnished by physician/practitioner that would have otherwise been covered by Medicare if there was no private contract and a proper Medicare claim had been submitted
  • State that beneficiary or legal representative enters into contract with knowledge that he/she has right to obtain Medicare-covered items and services from physicians and practitioners who have not opted out of Medicare, and that the beneficiary is not compelled to enter into private contracts apply to Medicare-covered services furnished by other physicians or practitioners who have not opted out
  • State expected or known effective date and expected or known expiration date of opt out period. Effective with affidavits signed after June 16, 2015, opt out providers will automatically renew every two-year period
  • State that beneficiary or his/her legal representative understands that Medigap plans do not, and that other supplemental plans may elect not to, make payments for items and services not paid for by Medicare
  • Be signed by beneficiary or his/her legal representative and by physician/practitioner prior to any services provided under contract's terms
  • Not be entered into by beneficiary or by beneficiary's legal representative during a time when beneficiary requires emergency care services or urgent care services
  • Be provided (a photocopy is permissible) to beneficiary or to his/her legal representative before items or services are furnished to beneficiary under terms of contract
  • Be retained (original signatures of both parties required) by physician/practitioner for duration of opt out period
  • Be made available to CMS upon request
  • Be entered into for each opt out period

Last Updated May 25, 2017