Want to opt-out of Medicare?

Many physicians threaten to “opt-out” of Medicare if reimbursement gets squeezed further. It may not be that easy:

I frequently get calls from providers frustrated by the payment procedures and reimbursement rates. Many of these providers request information regarding the Medicare Opt-Out procedure. However, while opting out of Medicare may seem like a quick and easy fix, properly opting out is a tedious process that requires the submission of affidavits, appropriate notification to beneficiaries, entering into private contracts with beneficiaries and taking steps to maintain the opt-out status.

Comments

Anonymous
I tried to read the links on the CMS web site and it was all gibberish to me. I had thought I could just say “NO” to medicare, or see the people as private pay or something. It looks like that is what the lawyers call a “felony.” I am not really sure about that though. Could someone who understands this stuff comment?
Anonymous
The easiest way out is to stop taking new Medicare patients. Second is to refuse assignment. Most difficult and potentially most punitive for the doctor is opting out, which makes your relationship to the patient that of a “private contractor” (what were you before that, anyway?) You have to tell the patient in writing that you and he are opting out of Medicare and that none of the services you are providing are going to be covered by Medicare, even if the patient files his claim to Medicare personally and is willing to accept 80% of the allowable as would be the case with participating without assignment. When you do this, even only once with one patient, you are compelled to continue opted out of Medicare for all patients for a minimum period of two years. So you have to be sure that you can make your practice work with whatever else you have left over once Medicare is out of the picture. Obviously this is intended to intimidate doctors who see even a minority of patients using Medicare into at least participating without accepting assignment. Of course, when you participate, you are limited to charging no more than about 20% over the allowable under Federal law. So they limit your charges even if you never get a cent directly from the government.
Anonymous
My understanding is that if you do not accept Medicare assignment, you may only collect 115% of the Medicare allowable amount. Trouble is, when these “allowable” amounts are not adjusted to keep up with inflation, or worse yet decreased, you are the one losing. Basically there is no practical way not to participate in Medicare and see these patients. If you do participate you still lose, and if you accept the Medicare HMO’s you lose most of all.
Josh
Question: What is the benefit of being a medicare provider BUT not accepting assignment vs complete opt-out?
Is it just that they’ll still pay you? but 115% of crap is just more crap, correct?
I’m looking into starting a cash-only / insurance free FP practice right out of residency. Anyone here tried that or heard stories?
sidebar: Anonymous always has great comments
Anonymous
Thanks Josh.
Once-upon-a-time almost all docs practiced in cash(or chickens)-only, insurance-free practices. They made house calls, delivered babies, and weren’t afraid to tackle serious problems lest they might be sued. These doctors were also usually the only game in town, unless you count the local barber.
Today, of course, times have changed. Other than doc-in-the-box care of aliens and the uninsured, it is very hard to attract the cash-pay customer. Two of my colleagues did a retainer model practice which still accepts/files insurance. They went from 10,000 active patients to just 500. Nobody wants to shell out their own money if their insurance company will cover their care, and there is a whole lot of competition in most markets, including nonphysician competition in some markets.
I personally think the answer is for physicians to set their own prices, abandon insurance contracts that don’t permit balance billing, get employers out of the insurance business, and redefine health insurance as being a contract between patient and insurance company, not doctor and insurance company.
Josh
Anonymous, i like the way you think. But i’m a bit more optimistic about a cash-only/ins free practice b/c if you take out the middle man, you can charge a LOT less and make a LOT more. Plus, there’s a strong precedent (covered in this blog) about ins’s waving co-pays for nurse clinics that charge $50-100+/visit. So if a doc would charge on the order of $20-40, my money says a) the pt won’t mind paying that much or b) the ins will wave the co-pay.
but i’ll be strictly cash/credit, the pt can work it out w/ their ins co themeslves or get an HSa
Anonymous
Josh, everything you say is true, and theoretically a practice without the costly billing and collections apparatus would be a lot less costly to run, leaving the possibility for more money for the doctor but still costing less to the patient.
But the anonymous poster above is right (not me, I am a different anonymous above.) Patients will resist paying anything to anyone if they think their insurance company will do it for them. They will resist seeing someone who charges low fees, even if their insurer will reimburse them later. They will not stay with doctors they have known and seen for years if that doctor goes out of their plan as a preferred provider. I am not at all surprised by the shrinking of a 10000-patient practice to 500 patients because most people think at some level that medical care is something someone else should be buying for them, their insurer or their employer, or their doctor. Only those with no choices who absolutely need care and have any money set aside for their needs–something few Americans feel the need to do–are willing to part with cash for their care. Even a doctor working under the model you suggest is seen not as cheaper and more efficient, but as someone who is more expensive and less convenient. You should hear what people say to front office staff when asked to pay their token co-payments, a requirement of their insurance companies, not their doctors.

Want to opt-out of Medicare?

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