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Physicians Opting Out of Medicare

The way doctors relate to the Medicare program is highly regulated by the government. Today’s video addresses the category of doctors who have opted out of original Medicare. As a reminder, in original Medicare, there are three categories of doctors. Doctors who accept Medicare assignment are the largest category and are somewhat similar to being in-network in a non-Medicare environment. A smaller category of physicians do not accept Medicare assignment. Not accepting assignment means that Medicare pays the patient directly rather than the physician but these physician offices file claims which are paid by Medicare. Doctors who do not accept assignment are allowed to charge a higher coinsurance amount than doctors who accept assignment. The last category of doctors opt out of Medicare altogether.

When a doctor opts out of Medicare, they fall entirely outside of the Medicare program. They shouldn’t submit claims to Medicare and, regardless, they won’t be paid by Medicare. There is no regulation of their fees which is a private matter between the doctor and the patient (who also should not submit claims or requests for reimbursement from Medicare). Because the fee is a private matter and not regulated by Medicare, the Agreement that is executed between a doctor and patient to underscore that the patient understands their financial responsibility is often referred to as a “private contract.”

About 10 years ago, when this information first received a great deal of publicity, it was reported that 3% of doctors opted out of Medicare and it was assumed this percentage might increase. The actual percentage varies widely depending on where these doctors and their patients reside. Doctors who opt out typically practice in affluent areas and cater to people who are willing to pay privately for services in addition to what they pay for Medicare coverage. Opt-out status also varies widely by specialty with psychiatrists having the highest percentage of doctors who have opted out of Medicare.

It is good news for many patients, however, that recent reports indicate that the percentage of doctors who opt out of Medicare has actually decreased over the years. A recent Kaiser Family Foundation article indicates that about 1% of doctors had opted out of Medicare in 2020. A likely factor affecting these numbers is hospitals acquiring medical practices. When that happens, doctors almost always have a relationship to Medicare. Another important trend is that more doctors coming out of training are looking to join a medical group in order to share calls and enjoy time off without the burden and financial responsibility of building and managing a practice.

Of course, it is not good news if you have several or more physicians who opt out of Medicare but at least the overall problem is not getting worse.

At any rate, if you are interested in looking up the status of an individual physician, click here.

This is the database which captures the information on executed opt-out affidavits which providers must sign and submit to the government to opt out. The opt-out affidavit is good for two years at which time the provider either continues his or her opt-out status or decides to participate with Medicare in one of the categories described above, accepts assignment or does not accept assignment.

Remember, this information is relevant to individuals who remain in original Medicare. Of course, if you are enrolled in an Advantage Plan, it is unlikely that you will find doctors who have opted out of original Medicare who are in-network with your plan because the physician’s objective in opting out is to have greater control of one’s practice without the government or an insurer establishing the reimbursement schedule.

Finally, everyone should know that there is a very high level of compliance among physicians in meeting government requirements to inform patients of their opt-out status and fees. We have seen instances where that hasn’t happened but they are very rare. We hope this information is helpful. Please watch the video, spread the word and follow us!