In recent years, we have seen an emerging number of physicians and health care providers transitioning to concierge, direct-to-consumer practices. Many providers no longer want to deal with the hassles of billing insurance, obtaining authorizations, responding to audits, etc., all in exchange for a reimbursement rate that those same providers view as insufficient. In addition, many patients are becoming frustrated with unfavorable insurance coverage determinations and increasing premium expenses. Those same patients are wanting a more personalized experience when it comes to their health care and are willing to pay to receive such an experience. As a result, patients are seeking alternative ways to receive and pay for health care, and providers are shifting to accommodate patient demand. Hence, the emergence of concierge practices across the country.
While there are a number of legal issues to consider before transitioning a practice to a concierge model, one such consideration relates to whether or not a provider should opt out of Medicare. Opting out of Medicare allows a provider to avoid Medicare mandatory claims submission requirements. Under the Medicare regulations, Medicare providers agree to submit claims to Medicare for covered services rendered to Medicare beneficiaries, and if those providers are participating, to accept the Medicare payment rates in exchange for such services. In other words, Medicare has a mandatory claims submission requirement that requires a provider to submit a claim to Medicare when covered services are rendered to Medicare beneficiaries. However, submitting claims is oftentimes what a concierge practice is aiming to avoid, and opting out of Medicare allows a provider to avoid the Medicare mandatory claims submission requirement. However, opting out of Medicare should not be done without careful consideration.
First, only certain types of providers are allowed to opt out. Specifically, the following provider types may opt out of Medicare: doctors of medicine, doctors of osteopathy, doctors of dental surgery or dental medicine, doctors of podiatric medicine, doctors of optometry, physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists, certified nurse midwives, clinical psychologists, clinical social workers, registered dieticians and nutrition professionals, marriage and family therapists, and mental health counselors. However, the following provider types are not eligible to opt out of Medicare: anesthesiology assistants, chiropractors, occupational therapists, physical therapists, qualified audiologists, and qualified speech language pathologists.
Secondly, opting out is a somewhat “permanent” decision. To opt out a provider must file an opt-out affidavit with its Medicare Administrative Contractor. There are specific guidelines regarding when the affidavit can be filed and when it can take effect. However, opting out cannot be retroactive. Once a provider opts out of Medicare, the opt out status remains in effect for 2 years. At the end of the 2 year period, the opt out affidavit automatically renews for another 2 year period unless the provider provides a cancellation notice at least 30 days prior to the expiration date. During the 2 year opt-out period, there is very limited ability to terminate the opt out.
Third, the opt out is an “all or nothing” status and applies to all settings in which the provider sees Medicare beneficiaries. In other words, a provider cannot opt out for some Medicare patients but not others. However, an opted out provider may still refer patients to other participating providers for services, and such services, when provided by other participating providers, are covered by Medicare.
Fourth, as the result of the opt out, the provider cannot bill Medicare for services rendered but can directly charge Medicare beneficiaries an agreed upon fee, without a limiting charge. To do so, the provider must enter into a private contract with the beneficiary setting out the terms of the relationship. There are specific requirements regarding what must be included in the private contract, including but not limited to clarification that the patient will pay out of pocket for services, and that neither the provider nor the patient will submit a claim to Medicare for reimbursement.
Thus, while opting out may make sense for certain providers engaged in concierge medicine, it is a complicated process with implications that must be carefully considered and evaluated.
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