If you’re 65 years or older, chances are you’ve got Medicare. That doesn’t mean, however, that you can go to just any doctor. Not all doctors accept Medicare; those who don’t can opt-out of the Medicare system all together, known as Medicare opt-out.
What Is Medicare?
Medicare is insurance for those who otherwise might not qualify for private coverage. It’s sponsored by the federal government and available to everyone 65 years or older who qualifies. Qualification is determined by whether or not you’ve paid enough in taxes into the Medicare system. Most people age 65 or older qualify for Medicare.
Medicare isn’t just for the elderly. If you’re disabled and are receiving Social Security disability benefits (SSDI), you too are eligible for Medicare. In fact, Medicare is assigned to you automatically after 2 years if you are disabled. Medicare is also available to those with End Stage Renal Disease (permanent kidney failure requiring dialysis or transplant).
Definition: Medicare Opt-Out
What is Medicare opt-out, exactly? When a provider opts out from taking Medicare payments, it doesn’t mean you can’t see that doctor, it just means Medicare won’t pay for it. The only time Medicare will pay an opt-out provider is in case of emergency or urgent need. If you insist on seeing that doctor, you have to make arrangements outside of the Medicare system or get private insurance instead.
When a provider opts out of the Medicare system, it does so for a period of 2 years. This designation automatically renews every 2 years unless the provider requests not to renew. In the case of an opt out, neither you nor your provider may submit a claim to Medicare. Medicare is not obligated to pay for any of these services.
Opting out isn’t exactly the same as being a non-participating provider. In order to opt out, a provider must perform the following:
- Submit an opt-out affidavit explaining exactly why it has decided to opt out.
- Provide all required Medicare opt-out private contracts, signed and submitted.
- Be legally authorized to practice dentistry, podiatry, optometry, medicine or surgery in the state in which it is opting out.
- Be legally authorized to receive Medicare payments in the state in which it practices.
- When a provider opts out of Medicare, it has opted out nationwide, not just in its state. The opt-out period lasts for 2 years and must be terminated before the provider can accept Medicare payments again.
Why do some providers opt out of Medicare, you may wonder? One reason may not be Medicare itself, but that a provider wants to use a fee-for-service model and is not signing contracts with any insurers. Such providers may be in the Direct Patient Care (DPC) subscription model instead.
More and more doctors are deciding to opt out not only from Medicare but from private insurance plans as well. Cumulative practitioner opt outs have risen from virtually 0 in 1999 to more than 17,000 in 2017. Reasons often cited include:
- More time to spend with patients: Medicare physicians spend on average just 8 minutes with patients. That’s 60 patients per day. Only 27% of the doctor’s time is actually spent with patients. After opting-out, patient time increases to 30 minutes per patient.
- Greater doctor satisfaction: In the traditional Medicare system, doctors are overworked and overstressed. In the opt-out system, they have more time to select the right treatments for their patients.
- Physician burnout down for opt outs: Physician burnout rate has jumped a whopping 10%, running from 37% for dermatologists to 60% for critical care doctors. Doctors who opt out report a much lower burnout rate with much higher job satisfaction.
- More focus on the patient: When a doctor opts out, it means more focus on the patient and less time spent on billing, claims and compliance. Doctors say that in the opt-out system, the old doctor/patient relationship has returned.
- Providers seeing higher earnings: Lastly, with all these great reports about doctor/patient relationships, you’d think that earnings for physicians would suffer. You’d be wrong. Reports are that doctors are seeing even greater profits under the opt-out system. Even while revenues are down, profits are up.
Learn even more about the opt-out system at AAPSonline.org, the Association of American Physicians and Surgeons.
3 Types of Medicare Provider Relationships
You’ll find that 3 types of Medicare provider relationships exist. The 2 that do not accept Medicare have distinctions.
Participating providers: Participating providers accept Medicare and always take assignments. Taking an assignment means more than just seeing a patient, it means accepting the already approved payment amount predetermined by Medicare. Providers must:
- Submit the bill to Medicare. Medicare processes the claim and pays your provider directly. You’re not responsible for reimbursements.
- While not responsible for reimbursements or submitting receipts, if you have standard Medicare Part B, you’re required to pay 20% coinsurance for Medicare-covered services.
- Certain providers, such as clinical social workers and physician assistants, must always take an assignment if accepting Medicare. Financially speaking, the doctor has no say in the matter. It’s Medicare that sets the amount of the fee.
Non-participating providers: Non-participating providers do accept Medicare, but at the same time do not agree to take assignments at all times. Whether a non-participating provider decides to take an assignment or not is up to its discretion. In short, while it has signed up for Medicare insurance, it doesn’t have to accept Medicare’s approved amount. What this means is:
- Non-participating providers are able to charge patients as much as 15% more than the approved Medicare amount for services. You are responsible for making up the difference, which means you pay the 20% coinsurance plus a 15% limiting charge.
- In some states, the limiting charge is as low as 5%. To find out your state’s limiting charge rate, visit your State Health Insurance Assistance Program, or SHIP.
- If your insurance requires you pay all the costs up front, your provider needs to submit a claim to Medicare, and you will receive the 20% coinsurance fee back.
Opt-out providers: Opt-out providers don’t accept Medicare at all. The difference between not participating and opting out is that the provider has to submit an official opt-out affidavit to Medicare. This agreement excluding providers from Medicare is good for 2 years and renews automatically if not canceled. Opting out means a provider can charge whatever it wants. If a provider chooses to opt out:
- Medicare will not pay for services from an opt-out provider. The policyholder is responsible for all costs.
- Your provider must explain fully and in advance that it has opted out of Medicare. You must understand that you are responsible for all charges.
- Opt-out providers cannot bill Medicare under any circumstances, except in emergencies.
How Does Your Provider’s Medicare Relationship Affect Your Medicare Costs?
If your provider is a participating provider, you can pay with Medicare. If your provider is a non-participating provider, you can still pay with Medicare at the provider’s discretion. If your provider opts-out of Medicare, you will be responsible for all costs.
How to Determine if Your Provider is Participating, Non-Participating or Opt-Out
How do you determine whether your provider participates in Medicare or not? First, just ask them. Other than that, Medicare has a web page where you can search whether your provider has opted out or not. To search the database, just go to Medicare.gov.
How to Compare Medicare Plans
Talk to friends and family. Do your own research. Or, let Benzinga do the work for you. Get your own custom Medicare quote from Benzinga, the Medicare experts. Get your custom quote now.
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How to Sign Up for Medicare
Signing up for Medicare is easy. In fact, when you turn 65, you’re signed up automatically. You can also apply 3 months before you turn 65. Follow these easy steps.
- Contact Social Security at 1-800-325-0778.
- Locate your local Social Security office.
- If you have Part A but need Part B, fill out form CMS-40B.
- Compare coverages, like traditional Medicare vs. a Medicare advantage plan.
- Join a plan. Enroll in Parts B and D or get a Medicare supplement plan.
Your initial enrollment begins 3 months before your 65th birthday. The Medicare open enrollment is October 15 to December 15. The Medicare advantage open enrollment is January 1 to March 31.
Medicare Education: Medicare Opt-Out
Now that you know the answer to, "what is Medicare opt out?", finding the right provider will come easier. Navigating the world of Medicare can be tricky, but once you learn the ins and outs, you’ll see it’s really no different than any other insurance plan. If your provider decides to opt out, that means if you want to remain with them you’ll have to pay for services yourself. Other than that, if you need to continue using your Medicare, you’ll have to find a new provider.
Get more information on Medicare in the Benzinga Medicare resource portal.
Frequently Asked Questions
Can dentists opt out of Medicare?
Dentists can opt-out of Medicare dental plans just like any other type of physician. For dentists, it’s important to remember that if they opt out, they will not get reimbursed by a Medicare advantage plan for 2 years unless it’s an emergency.
Can a provider opt out of Medicare Parts A and B?
When a provider opts out of Medicare, it opts out of the whole thing. Opting out lasts 2 years and is automatically renewed if not canceled by the provider.