Last Modified: 8/13/2018 Location: FL, PR, USVI Business: Part B
Private contracts between beneficiaries and physicians or practitioners
Title 42, Part 405 of the Code of Federal Regulations outlines the guidelines and requirements for physicians and/or non-physician practitioners who wish to enter into private contracts (opt out). These regulations permit a physician or practitioner to opt out of Medicare and enter into private contracts with Medicare beneficiaries, if specific requirements of these instructions are met.
Definition of physician or practitioner
For purposes of this provision, the term “physician” is limited to doctors of medicine; doctors of osteopathy; doctors of dental surgery or of dental medicine; doctors of podiatric medicine; and doctors of optometry who are legally authorized to practice dentistry, podiatry, optometry, medicine, or surgery by the State in which such function or action is performed; no other physicians may opt out. Also, for purposes of this provision, the term “practitioner” means any of the following to the extent that they are legally authorized to practice by the State and otherwise meet Medicare requirements:
• Physician assistant
• Nurse practitioner
• Clinical nurse specialist
• Certified registered nurse anesthetist
• Certified nurse midwife
• Clinical psychologist
• Clinical social worker
• Registered dietitian
• Nutrition professional
The opt-out law does not define “physician” to include chiropractors; therefore, they may not opt out of Medicare and provide services under private contract. Physical therapists in independent practice and occupational therapists in independent practice cannot opt out because they are not within the opt-out law’s definition of either a “physician” or “practitioner.”
Requirements of the opt-out affidavit
Under section 1802 (3) (B) of the Social Security Act, a valid affidavit must:
• Be in writing and be signed by the physician or practitioner.
• Contain the physician’s or practitioner’s full name, address, telephone number, national provider identifier (NPI) and billing number (if one has been assigned) and the physician’s or practitioner’s tax identification number (TIN) and social security number.
• State that, except for emergency or urgent care services, during the opt out period the physician or practitioner will provide services to Medicare beneficiaries only through private contracts that meet the criteria for services that, but for their provision under a private contract, would have been Medicare-covered services.
• State that the physician or practitioner will not submit a claim to Medicare for any service furnished to a Medicare beneficiary during the opt out period, nor will the physician or practitioner permit any entity acting on his/her behalf to submit a claim to Medicare for services furnished to a Medicare beneficiary, except for emergency or urgent care services.
• State that, during the opt out period, the physician or practitioner understands that he/she may receive no direct or indirect Medicare payment for services that he/she furnishes to Medicare beneficiaries with whom he/she has privately contracted, whether as an individual, an employee of an organization, a partner in a partnership, under a reassignment of benefits, or as payment for a service furnished to a Medicare beneficiary under a Medicare Advantage plan.
• State that a physician or practitioner who opts out of Medicare acknowledges that, during the opt out period, his/her services are not covered under Medicare and that no Medicare payment may be made to any entity for his/her services, directly or on a capitated basis.
• State on acknowledgment by the physician or practitioner to the effect that, during the opt out period, the physician or practitioner agrees to be bound by the terms of both the affidavit and the private contracts that he/she has entered into.
• Acknowledge that the physician or practitioner recognizes that the terms of the affidavit apply to all Medicare-covered items and services furnished to Medicare beneficiaries by the physician or practitioner during the opt out period (except for emergency or urgent care services furnished to the beneficiaries with whom he/she has not previously privately contracted) without regard to any payment arrangements the physician or practitioner may make.
• With respect to a physician or practitioner who has signed a Part B participation agreement, acknowledge that such agreement terminates on the effective date of the affidavit.
• Acknowledge that the physician or practitioner understands that a beneficiary who has not entered into a private contract and who requires emergency or urgent care services may not be asked to enter into a private contract with respect to receiving such services.
• Identify the physician or practitioner sufficiently so that the carrier can ensure that no payment is made to the physician or practitioner during the opt out period and
• Be filed with all carriers who have jurisdiction over claims the physician or practitioner would otherwise file with Medicare and be filed no later than 10 days after the first private contract to which the affidavit applies is entered into.
• In addition, it is expected that the affidavit will include an effective (signature) date.
Renewal of opt out
NOTE: Opt Out Affidavits signed BEFORE June 16, 2015
A physician or practitioner may renew an opt out without interruption by filing an affidavit with each Medicare contractor who has jurisdiction over claims the physician/practitioner would otherwise file with Medicare provided the affidavits are filed within 30 days after the current opt-out period expires.
NOTE: Opt Out Affidavits signed AFTER June 16, 2015
Effective for Opt Out affidavits signed on or after June 16, 2015 providers will no longer need to submit renewal affidavits every two years to remain Opt Out in Medicare. The contractor will automatically renew the provider’s Opt Out status if a letter is not received to withdraw their Opt Out status.
Early termination of opt out
If a physician or practitioner changes his/her mind once the affidavit has been approved by the carrier, the opt out may be terminated within 90 days of the effective date of the affidavit. To properly terminate an opt-out affidavit, a physician or practitioner must:
• Not have previously opted out of Medicare
• Notify all Medicare carriers, with which he/she filed an affidavit, of the termination of the opt out no later than 90 days after the effective date of the opt out period
• Refund to each beneficiary with whom he/she has privately contracted all payment collected in excess of
• The Medicare limiting charge (in the case of physicians or practitioners)
• The deductible and coinsurance (in the case of practitioners).
• Notify all beneficiaries with whom the physician or practitioner entered into private contracts of the physician’s or practitioner's decision to terminate opt out and of the beneficiaries’ right to have claims filed on their behalf with Medicare for services furnished during the period between the effective date of the opt out and the effective date of the termination of the opt out period. In the event such claims are filed and have already been paid by the beneficiaries, the paid amount must be indicated on the claim.
When the physician or practitioner properly terminates opt out in accordance with the second bullet above, he/she will be reinstated in Medicare as if they had not opted out.
Opt-out affidavits, opt-out renewals, and/or requests for early termination of opt out must be submitted in writing to:
First Coast JN Provider Enrollment
P.O. Box 3409
Mechanicsburg, PA 17055-1849
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