Opting-out of Medicare Part B gives physicians greater control over the prices for their services. But, if it is not done correctly, there are serious consequences.
Regardless of whether or not a physician is a participating provider in the Medicare program, he or she must submit claims to Medicare for items and services he or she provided to Medicare beneficiaries. There are several key differences, however, between participating and non-participating providers. Participating providers always accept assignment on Medicare claims and they cannot collect from beneficiaries any amount other than applicable deductible and coinsurance amounts or non-covered charges. Non-participating providers choose whether to accept assignment on a case-by-case basis. If a non-participating provider does not accept assignment on a claim, the maximum amount he or she may charge is 115% of the approved fee schedule amount for non-participating providers. The Medicare fee schedule amount for non-participating providers is 5% less than that of participating providers.
If a physician does not want Medicare to dictate prices to him or her, the physician can opt-out of Medicare Part B. Once a physician is opted-out, he or she is no longer required to submit claims to Medicare; he or she can bill beneficiaries directly. Plus, such a physician is not subject to the limiting charge provisions, and can charge as much as he or she wants.
In order to opt-out of Medicare, a physician must privately contract with his or her patients and submit an affidavit to his or her Medicare carrier(s). Failure to do one or the other causes the physician’s attempt at opting-out to be nullified, and any private contracts between the physician and Medicare beneficiaries are deemed null and void.
When a physician fails to opt-out, the physician must submit claims to Medicare for all Medicare-covered items and services furnished to Medicare beneficiaries, including items and services furnished under the nullified contracts. Moreover, he or she cannot bill or collect an amount from a beneficiary except for applicable deductible and co-insurance amounts. Accordingly, depending upon the items or services that were provided, a physician may have to refund some or all money to beneficiaries that was, which can be very costly. Thus, it is important for an opt-out to be done right the first time around.