Opting Out of Medicare

Previous to June 16, 2015, a physician who opted out of Medicare agreed not to see any Medicare patients (barring emergencies or urgent services), except for those with whom she has entered into private contracts, for a period of two years. As of June 16, 2015, when you opt out, that status will automatically renew every two years unless you inform the Medicare Administrative Contractor for your geographical area within 30 days before the next two-year period begins that you wish to change your status.

Since January 1, 1998, physicians have been permitted to opt out of Medicare and enter into private contracts with Medicare beneficiaries that allow them to set their own fees. If you don’t officially opt out, it is illegal to have Medicare patients pay for your services outside of Medicare. Once you’ve opted out successfully, Medicare will not pay for the care you provide in any setting, for as long as you’re opted out, but you will be able to see Medicare patients and have them pay you based on your private contracts with them.

This means that if you work in a situation where you must see Medicare patients as a part of your employment, you cannot opt out of Medicare. It also means that if there is any possibility that your life will change in the next two years, and you may have to see Medicare patients as part of a new employment situation, you also should not consider opting out of Medicare.

The rules for opting out are very specific. In order to opt out you must file an opt-out affidavit with the Medicare Administrative Contractor (MAC) or Carrier that administers any jurisdiction you practice in. A template for this affidavit that conforms to Medicare rules follows. A private contracting template also follows, which you can use for entering into private contracts with your Medicare patients once you have opted out. These contracts must be kept on file in your office, available to be sent to the MAC, Carrier, or to the Centers for Medicare and Medicaid Services (CMS), which oversees the MACS and Carriers, should they be requested.

Download the Opt-Out Guide, Affidavit and Private Contract

Download the MAC Directory

Notice and Disclaimer

Opting out has serious implications for your status, rights, and responsibilities as a Medicare provider. This summary and the attached sample affidavit and private contract template are based on sources believed to be reliable. The information contained herein doesn’t constitute legal advice nor should it be relied on exclusively. The APA assumes no responsibility for any physician’s decision to opt out or reliance on the sample agreements that follow. If you have any questions concerning these materials or opting out in general, please call the Practice Management HelpLine (800-343-4671).

Who may opt out and when?

Non-participating physicians may opt out of Medicare at any time. Their continuous two-year opt-out period begins the date the affidavit is signed, provided it is filed with the MAC or Carrier within ten-days after the physician signs his first private contract with a Medicare beneficiary.

Participating physicians must file their affidavits with their MAC or Carrier at least thirty days before the first date of the next calendar quarter, with the affidavit showing an effective date of the first day of that quarter (i.e., 1/1, 4/1, 7/1, 10/1).

Physicians who have never enrolled in Medicare, but want to be able to treat Medicare patients under private contracts, must also file an affidavit with the MAC or Carrier that serves their area. These physicians will be provided with a UPIN (Unique Physician Identification Number), based on the physician tax identification number that must be entered on the affidavit.

Essential things to know about opting out