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How Physicians Can Opt Out of Medicare, and What to Know and Consider Beforehand

With Medicare reimbursement rates consistently on the decline over the past 2 decades, more and more physicians have had to consider the sustainability of continuing to see Medicare patients. According to the AMA, including the recent 2.8% Medicare cut that went into place January 1, 2025, reimbursements to physicians are now over 30% lower over this time period when adjusted for inflation and the costs of running a practice. 


Opting out of Medicare is a moral dilemma for many physicians who are stuck between wanting to ensure access to care for their patients and the practical realities of running a sustainable private practice in the face of increasing overhead and declining reimbursements.  Increasingly, we see physicians making the difficult choice to opt out of Medicare. If you or your practice are considering opting out of Medicare, this article covers the basics on how to ensure your practice withdraws from Medicare correctly.


Note that this decision has large implications, and you should speak to a healthcare attorney before moving forward with any of the steps discussed here, as this information is provided for general educational purposes only. 


Disclaimer: Our content is for generalized educational purposes. Please do your own due diligence before making decisions based on this page. Nothing on this page constitutes formal or personalized legal or financial advice. Laws and taxes vary based on location and while this information is accurate to the best of our knowledge, it may not be up to date or apply in your location or personal situation. We are not formal financial, legal, or tax professionals, and you should consult these as appropriate. To learn more, visit our disclaimers and disclosures.


Steps physicians in private practice should follow for opting out of accepting Medicare insurance for patients

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What Does Opting Out of Medicare Mean? 


Opting out of Medicare means neither you or your patient can bill Medicare for services going forward.  In order to withdraw from Medicare, you must stop accepting all Medicare plans, including traditional and Advantage plans, and can no longer bill for any patients on Medicare. Note that CMS states you can still bill for and get paid for emergency or urgent care services on Medicare patients even if you have opted out. It’s also important to know that you can still refer your Medicare patients to other clinicians or services that accept Medicare; it’s just that you can’t bill for Medicare for your office visit.


If you are planning on dropping Medicare for your entire practice, you must have every physician individually go through the Medicare withdrawal process. A corporation itself cannot opt out of Medicare, but if all clinicians in the group opt out individually, the corporation is effectively withdrawn. 



Factors to Consider Before Withdrawing from Medicare


If you are considering withdrawing from Medicare, there are multiple factors to consider given the numerous implications of doing so. 


First, you’ll need to decide if you are okay with not seeing this patient population. Since most physicians feel strongly about serving as many patients as possible and may feel uncomfortable limiting access for their existing Medicare patients, this can be the biggest barrier for so many.


If you decide to go forward, the next step is to determine the impact on your current practice by not taking Medicare. Although some of your Medicare patients may elect to stay with your practice, assume that most will switch physicians.  Determine what percentage of your total patient population is currently on Medicare and what their financial contribution is to your practice. If a large percentage of patients you see are Medicare, it may not be financially possible to drop it. Instead, you may consider no longer taking new patients with Medicare in order to limit the future financial impacts of Medicare’s recent (and upcoming) reimbursement cuts. 


Note that opting-out from Medicare is different from “non-participating” status where a physician accepts Medicare assignments on a claim-by-claim basis. If your main concern is a specific Advantage plan, consider dropping that plan instead of all Medicare patients. 


Next, take into account all arrangements in which Medicare participation might be necessary for you. For example, if you opt out of Medicare at your practice but decide to take a side gig as an independent contractor, neither you or the entity you are working for can receive Medicare reimbursement for your services.  Additionally, know that if you are planning on switching jobs in the near future, this could be a significant barrier to getting a job elsewhere.


In addition, before completing the opt out process, you should ensure you have referrals for other practices where you can refer your Medicare patients once you stop accepting their insurance. Not only is this good patient care, it also will help you avoid claims of patient abandonment. Experts also recommend notifying your malpractice insurance company about these plans.


5 things to consider before opting out of Medicare


Steps to Opting Out of Medicare


Once you’ve made the decision to opt out of Medicare, your first step is to contact your Medicare Administrative Contractor (MAC) to obtain a standard affidavit form and any information needed to include in your opt-out affidavit and private contract. To complete the affidavit it must:


  • Be signed and in writing

  • Include all necessary statements you agree to

  • Identify yourself with date of birth and social security number (so the MAC can ensure Medicare doesn’t pay you during the opt-out period)

  • Be filed with all MACs or Carriers that administers any jurisdiction you practice in


What must be included in a completed Medicare opt-out affidavit

You must then contact all your current Medicare patients and notify them of your intention to opt out of Medicare. This is the time to provide patients with referrals to alternative practices (as mentioned above) who provide Medicare services, as well as offer them the opportunity to stay on with your practice through a private contract. 


Beneficiaries who choose to continue in your care must sign a private contract with your practice stating that no one can bill for future medical care provided by the practice and that patients will pay for services out of pocket. You are able to charge what you want for these services. You must keep a copy of this private contract on file for at least two years (as this is how long the opt out period lasts), and have them re-sign these contracts every two years. CMS could request to see these contracts, so it’s important to be vigilant about this. Remember: Medicare patients in need of emergency or urgent care services cannot sign these private contracts. 


Note that if a Medicare-eligible patient has a primary insurance that is not Medicare but is still enrolled in Medicare Part B as a secondary payer, they will still need to sign an opt out contract with you to ensure you are not bound by the Medicare-allowed fees. 


If you have never been enrolled in Medicare, you still need to opt out if you are going to see Medicare patients using a private contract. You will also file an affidavit with the MAC or Carrier that serves your area, and you’ll get a Unique Physician Identification Number (UPIN) based on your tax ID number, which will be entered on the affidavit. 



Opt Out Period


If you and your practice have never been enrolled in Medicare (or you were previously enrolled as a non-participating provider), your opt out starts the same date you sign your affidavit. If you have previously been accepting Medicare, your opt out period begins on the first day of the next calendar quarter, provided that you filed it at least 30 days beforehand. 


Your opt out status will automatically renew every 2 years. 



Is Opting Out of Medicare a Permanent Decision?


There are multiple options to opt back into Medicare, but you should note that it is not always a straightforward process, so it’s still important to be careful about your decision. 


Some situations in which you can rejoin include:

  • Change your mind within 90 days: Notify MACs and Carriers that you filed the opt out affidavit with and patients that you are now taking Medicare. You will also have to refund any money you received from privately contracted Medicare patients above and beyond Medicare-approved charges.

  • Up to 30 days before your 2 year opt out period is over: Notify all (MACs) and your patients that you are rejoining Medicare.

  • Automatically rejoin: If you file a claim during your opt out period, you can be re-enrolled and your opt out can be nullified (but this can also lead to investigations and potential required refunds, so it’s not the method recommended by most experts)


If for some reason you or your patient file a claim with Medicare during the opt-out period, you may be contacted for an explanation by the MAC or Carrier, and must respond within the designated time period or risk your opt out status being revoked. In this situation, Medicare would likely not pay for any claims that occurred during the original opt out period. 



Conclusion


Opting out of Medicare is a decision that you should not take lightly given the implications for both your patients and your practice. However, if it ends up being the right decision for you, ensure that the protocols are all followed exactly to avoid problems. Remember that this article is only for generalized educational purposes, and you should consult with a healthcare attorney and potentially your malpractice carrier before making any changes to ensure that all the appropriate procedures are followed.



Additional Relevant Resources for Physicians in Private Practice


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