Medicare Opt-out

Physicians and practitioners (“providers”) who wish to treat Medicare beneficiaries and do not want to be bound to Medicare terms and reimbursement limits will need to opt-out of the Medicare program (“program”). Generally, physicians and practitioners who treat Medicare beneficiaries are required to submit claims to Medicare for reimbursement, regardless of whether the provider is enrolled in the program. Providers who provide services that are categorically not covered by Medicare, do not need to opt-out. However, if the item or service may not be covered by Medicare, the provider must submit claims to Medicare, unless they have properly opted out. A provider who properly opts-out of the program can treat Medicare beneficiaries and is not required to submit claims for such services to Medicare. In order to properly opt-out, providers must:

  • Send an affidavit to their Medicare contractor(s) (MAC);
  • Have a valid private contract between the Medicare beneficiary and the provider; and
  • Comply with opt-out requirements during the opt-out period.

Who Can Opt-Out of Medicare?

Most physicians and practitioners can opt-out of the Medicare program, including providers who have been excluded from the program. However, chiropractic physicians, corporations, partnerships, and other organizations cannot opt-out. Only individual providers can opt-out. Because the opt-out applies to the provider, it also applies to all of the provider’s services performed at various locations and under employment with various organizations. For example, if a group employs an opt-out provider, the group cannot bill Medicare for the provider’s services even if the group is enrolled in Medicare.

Types of Medicare Opt-Out

There are two opt-out options: 1) Complete opt-out, and 2) Opt-out and elect to order and certify items and services for Medicare beneficiaries.

Providers who do not wish to provide or certify items or services to Medicare beneficiaries may elect option one (1). Option two will allow the provider to order and certify DMEPOS, labs, and x-rays services which will be paid under Medicare Part B. Therefore, providers who wish to certify Medicare beneficiaries for other services or items, may want to elect option two (2). Option two providers should be cautioned that Medicare may deny payment for items or services ordered by non-participating providers.

Opt-out Duration

Opt-out periods are effective for a minimum of two years. After two years, the opt-out period will auto renew for another two years, unless the provider cancels the opt-out. (See Canceling an Opt-Out below)

When to Opt-Out

A provider who wishes to privately bill Medicare beneficiaries must file a valid opt-out affidavit at least 10 days after the provider enters into their first private contract with a Medicare beneficiary.

If the provider has never enrolled in Medicare, the effective date of the opt-out is the date of signing a valid opt-out affidavit, so long as it is filed within 10 days of signing the first private contract.

If the provider is enrolled in Medicare, the opt-out is effective at the beginning of the next calendar quarter, if the affidavit is submitted at least 30 days before the beginning of the selected calendar quarter. Any services performed before the beginning of the opt-out period is subject to Medicare rules and reimbursement rates, regardless of whether a private contract has been executed.

How to Opt-Out:

Opt-Out Affidavits

Providers who wish to opt-out of Medicare must submit an affidavit to their Medicare contractor (MAC) stating that they wish to opt-out. CMS does not provide an opt-out form; however, some MACs supply opt-out affidavit templates. The opt-out affidavit must contain specific statements to which the provider agrees. The statements are generally a restatement of the opt-out rules to ensure that the Provider understands the effect of a Medicare opt-out.

The affidavit must be filed with all MACs who have jurisdiction over the provider’s claims which would otherwise be filed with Medicare. The affidavit must be filed no later than 10 days after entering into the first private contract with a Medicare beneficiary.

Private Contracts

In addition to filing an opt-out affidavit, opt-out providers must execute a private contract with all Medicare beneficiaries in which they provide services or items and privately bill. However, Medicare beneficiaries that seek treatment for emergency or urgent services cannot contract with providers. Opt-out providers who provide emergency or urgent care services to beneficiaries can submit claims to Medicare. (Contact our attorneys for information on different opt-out requirements for emergency and urgent care providers).

Private contracts must contain specific statements as required by Medicare rules. The contract ensures that beneficiaries understand that they have a right to obtain services from a provider who has not opted-out, that they are fully responsible for payment to the provider, and that they agree not to submit a claim to Medicare. Private contracts do not need to be submitted to Medicare. However, providers must retain a copy of all private contracts for the duration of the opt-out period. Providers must also give all beneficiaries a copy of the private contract. Private contracts are only valid for the opt-out period in which they are executed. Therefore, when a 2-year opt-out period ends, the provider must enter into a new private contract with each beneficiary they treat during the new 2-year opt-out period.

Providers are not required to obtain a private contract for services that are definitely not covered by Medicare.  However, opt-out providers must have a valid private contract for services that may be covered by Medicare.

Contracts are only valid if a valid affidavit is properly filed. Services provide before the effective date of the affidavit are subject to Medicare limits, regardless of whether there is a private contract.

Canceling An Opt-Out

A provider may cancel an opt-out by submitting a written notice to their MAC no later than 30 days before the end of the current 2-year opt-out period. All MACs who received the provider’s opt-out affidavit must be sent a copy of the cancellation notice. If the MACs do not receive a cancellation notice 30 days before the end of the 2-year opt-out period, the opt-out will auto-renew for another two years.

Failure to Opt-Out of Medicare Sanctions

CMS can sanction providers who fail to properly opt-out, maintain opt-out, renew opt-out (applies to affidavits filed before June 16, 2015), privately contract, properly terminate, or properly cancel opt-out. Failure to properly opt-out includes failure to submit a valid or timely affidavit and signing a private contract before filing an affidavit. Failure to maintain opt-out includes:

  • Knowing and willfully submitting a claim to Medicare when there is a valid affidavit and private contract;
  • Failure to enter into a valid private contract;
  • Failure to comply with emergency and urgent care service provisions; and
  • Failure to keep a copy of private contracts during the opt-out period.

Failure to opt-out or maintain opt-out status can result in:

  • private contracts and affidavit being held null and void;
  • inability to collect fee from beneficiaries, except copay, deductible, or coinsurance;
  • a refund to beneficiaries for amounts paid above Medicare charge limits;
  • suspension of payment on claims related to private contracts; and
  • Medicare reimbursement rate based on the provider’s participation agreement (if previously enrolled) or Medicare limiting charges (if not previously enrolled)

Failure to properly opt-out does not bar the provider from attempting to opt-out again. However, failure to maintain opt-out bars the provider from attempting to opt-out until the current opt-out period ends.

Providers have the right to appeal a determination regarding failure to opt-out or maintain opt-out.

How We Can Help

Our attorneys assist providers with determining whether an opt-out is required, drafting valid affidavits and private contracts, and representing providers with actions and reimbursement issues related to failure to opt-out or maintain opt-out. Often opt-out decisions are made during practice startup or practice expansion. Our team of transactional attorneys are high experienced in helping providers make opt-out decisions and other decisions related to practice startup and operation. Our attorneys have helped countless practices, from ASCs to HHAs and substance abuse treatment centers. If you have questions about Medicare opt-out or other practice questions, contact our attorneys to discuss your options and obligations.


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