Opting Out of Medicare

The old saying “look before you leap” should be at the forefront of every physician’s mind when thinking about opting in or out of the Medicare program. Physician costs have been on the rise since 2001, while Medicare reimbursements have only risen by 1%. With the impending 23% cut in Medicare reimbursement, more and more physicians are weighing their options. (Read “On the Edge with Medicare” to learn about how some rheumatologists are deciding whether to opt out of Medicare.)

However, making a decision to opt out of the Medicare program should be done carefully and with full understanding of what is involved. When considering opting out of Medicare, rheumatology practices often have concerns about financial implications and whether the decision will negatively affect the practice’s reputation in the community. Each practice is unique and should thoroughly consider these factors before deciding to opt out.

If you have carefully considered the options and have decided to opt out of Medicare, you’ll need to take the following steps:

1. Notify your patients, colleagues, and other affected parties. The first step in the opt-out process is to notify your Medicare patients and others of your intent. Send a letter to your patients explaining what opting out means, your reasons for doing so, and their options for staying with the practice or finding a new physician. The letter should be sent in advance of opting out so patients have time to make alternative arrangements, if necessary.
2. File an affidavit with Medicare. The next step is to notify Medicare. You’ll need to file an affidavit with each Medicare carrier that has jurisdiction over claims that you have filed, or that would have jurisdiction over your claims had you not chosen to opt out. The Medicare carrier must receive the affidavit at least 30 days before the first day of the calendar quarter (i.e. January 1, April 1, July 1, and October 1) following your opt-out date and within 10 days of entering into your first private contract with a Medicare patient.
3. Privately contract with the Medicare patients you continue to care for. Medicare patients who elect to receive care from you must sign a private contract before you can treat them, the only exception being those in need of emergency or urgent care. When providing emergency or urgent care services to Medicare patients, append modifier-GJ—“ ’Opt out’ physician or practitioner emergency or urgent service”—to any codes you are billing to indicate that the service was performed by an opt-out physician providing emergency or urgent care.
4. Initiate appropriate office procedures. Once you’ve executed your affidavit(s) and private contracts, you need to establish office procedures to ensure that you comply with the opt-out rules. For example, you will need to implement procedures to identify Medicare patients and ensure that they are notified of the opt-out decision, as well as remind them of payment arrangements when making appointments.
5. Mark your calendar to renew your opt-out status. Your final step is to mark your calendar with reminders to send Medicare a new affidavit every two years to maintain your opt-out status. Failure to renew your opt-out affidavit while still seeing Medicare patients will mean you are entering into private contracts with those patients without Medicare’s consent. If, after two years of opting out, you choose to re-enroll in Medicare, you will need to complete a new Medicare physician enrollment form, just as you would if you were new to the program.

Although there are many things to consider when deciding whether to opt out of Medicare, and many steps to opting out, with careful analysis and planning rheumatologists can make the decision that is best for their practices—and their patients.