In today’s video, we discuss a few of the ways a medical practice can be affected by choosing to opt out of Medicare.

As you probably know, Medicare rules are complex and are comprised not only of statutes and regulations, but also other guidance such as manuals and other documents from the Centers for Medicare and Medicaid Services. Consequently, it’s no surprise that that our clients have asked us a lot of questions over the years about the decision to opt out of Medicare.

I’m Michael H. Cohen, founding attorney of the Cohen Healthcare Law Group. We’ve advised over a thousand healthcare industry clients on healthcare and FDA legal issues. Today, I’m going to answer a few of the most common questions that our clients have asked us related to the Medicare opt-out process.  By the end of this video, you’ll know what some of the specific conditions that practices opting out of Medicare can expect to face.

The first question we answer is, “As an opt-out physician, will I be able to order labs from labs that bill Medicare?”

Physicians who opt-out of Medicare can generally order Medicare-covered services furnished by a Medicare-enrolled provider, as long as the services are medically necessary services and the Medicare Contractor has your required information.

Specifically, the Medicare Benefit Policy Manual, which helps advise Medicare Contractors who process claims for the Medicare program, states the following in regard to opt-out physicians ordering services from a Medicare provider that has not opted-out of Medicare:

“If claims are submitted for any items or services ordered or prescribed by an opt out physician or practitioner under §1802 of the Act, the Medicare Contractor may pay for medically necessary services of the furnishing entity, provided the furnishing entity is not also a physician or practitioner that has opted out of the Medicare program.”

So the answer to the first question is usually yes.

Another common question is, “Can I accept cash payments from Medicare patients while waiting for my opt-out decision to take effect?”

You should not accept cash payments until your Medicare participation effectively terminates, which is at the beginning of the calendar quarter in which you select to opt-out.  This is also assuming you have timely filed your opt-out affidavit with your Medicare Contractor.  A participating physician may properly opt-out of Medicare at the beginning of any calendar quarter, provided that the opt-out affidavit is submitted to the participating physician’s Medicare Contractor at least 30 days before the beginning of the selected calendar quarter.

However, once you enter into your first private contract with Medicare beneficiaries, you have (10) ten days to file your opt-out affidavit with your Medicare Contractor.  This is because he Medicare opt-out affidavit “must be filed with all Medicare [C]ontractors who have jurisdiction over the claims the physician/non-physician practitioner would have otherwise filed with Medicare and must be filed no later than 10 days after entering into the first private contract to which the affidavit applies.

Thus, we might advise a client who plans to opt-out of Medicare to enter into their first private contracts with their Medicare patients at least 30 days in advance of the calendar quarter in which they select to start your opt-out period, and then file their opt-out affidavit with the Medicare Contractor within ten (10) days of entering those contracts.

The last common question we’re covering in this video is, “What notification or other obligation do I have to my existing Medicare patients?”

We generally advise clients who decide to opt-out of Medicare to inform patients regarding the physician’s opt-out status in a form separate and apart from the private contract. You  should provide  this  opt-out  status  information  once  you  receive confirmation  from  the  Medicare Contractor.  Here’s an example of the sample language we suggested to one of our clients for this purpose.

“Physician has opted out of Medicare and provides services to Medicare patients under a private agreement. Medicare will not be billed for services, and patient is responsible for the entire fee charged by physician.  Physician fees are not subject to Medicare limits, and MediGap will not pay for the services.  The patient has had opportunity to use another physician who has not opted out, but has freely chosen Physician.”

Thanks for watching. Here’s to the success of your healthcare venture, we look forward to speaking with you soon.