Since writing about the new MACRA bureaucracy, and the Morton’s Choice facing private practitioners between Scylla (the Merit-based Incentive Payment System) and Charybdis (the still largely undefined Alternate Payment Models), a question I’ve been hearing with increasing frequency is whether it wouldn’t be better to simply opt out of Medicare participation entirely.
It is easy to see why more and more physicians are asking that question. Although the incoming administration has promised significant (but largely unspecified) changes to the health care system – as I wrote last month – reimbursements continue to decrease, onerous regulations continue to increase, and there is no evidence to suggest that either of those trends will change anytime soon. That leaves many physicians wondering whether their continued participation with Medicare (and Medicaid, for those who accept it) is ultimately worth it.
It is difficult to assign a firm answer to the basic question of whether or not opting out is a good idea. As usual, it will depend upon your unique circumstances, as well as the size and composition of your practice. This is not a decision to make lightly, or hastily – particularly if a significant percentage of your patients have federal or state health care coverage.
You will need to carefully consider the pros and cons involved, beginning with the fact that once you pull the trigger, there’s no going back for at least 2 years. (If you are opting out for the very first time, you do have 90 days to change your mind and opt back in.) And you must create a physician-patient agreement covering your treatment and billing guidelines, and make sure all of your Medicare/Medicaid patients sign it.
The obvious benefit of opting out is the freedom to do and bill what and how you wish. Once liberated from CMS compliance restrictions, you can spend your time treating patients, rather than catering to and being controlled by the government. The physician-patient relationship regains its proper priority; you can work directly with your patients in structuring their care plans and pursuing the best treatment options. Physicians with small, relatively young patient populations often find the prospect of charting their own course particularly attractive.
The biggest problem with opting out is that CMS policies and restrictions are mimicked by commercial carriers. Many private plans follow federal guidelines closely when determining their own claims submission, reimbursement, and medical necessity rules. Commercial insurers will almost certainly follow the CMS’s lead on alternate payment models. So unless you decide to accept no insurance at all, opting out of Medicare may not resolve the basic issue.
Not only that, but some commercial carriers require Medicare participation in order to maintain credentialing with them. So if you opt out of federal and state participation, you will also need to opt out of commercial plans with that requirement. Hospital admitting privileges may also be contingent on Medicare participation; be sure to check your hospitals’ bylaws.
Another challenge is pushback from patients. While few patients like dealing with insurance claims, fewer still are willing to pay for their care themselves. When drafting a physician-patient agreement, it must be made very clear that you are not going to bill Medicare or Medicaid for services rendered, and that patients cannot do so either. Inevitably, a substantial percentage of your Medicare/Medicaid-covered patients will choose to switch to a participating physician.
If you do decide to opt out, here is how you do it:
1. Notify your patients that you will be opting out by a specific date, which should be the first day of a calendar quarter.
2. File an affidavit (available at CMS.gov ) with your local Medicare carrier at least 30 days before your opt-out date.
3. Draft and post a fee schedule.
4. Draft a private contract to be signed by all Medicare beneficiaries, covering all services that would normally be covered by Medicare. Be sure to run it past your attorney.
5. Install procedures to ensure that your office never files a Medicare claim, and never provides information to enable a patient to file a Medicare claim. The two exceptions – for emergency care, and for covered services that Medicare would deem unnecessary – should be used sparingly, and with caution.
Dr. Eastern practices dermatology and dermatologic surgery in Belleville, N.J. He is the author of numerous articles and textbook chapters, and is a longtime monthly columnist for Dermatology News. Write to him at dermnews@frontlinemedcom.com .
