The inadequacy of Medicare anesthesia payments may prompt members to consider whether they can opt out of Medicare. Any physician or CRNA may opt out of Medicare, while AAs cannot. This article explores the mechanisms for opting out of Medicare and the consequences of doing so. There are three different relationships a provider can have with Medicare.
Participating providers (PP) treat Medicare patients and always take assignment (meaning that the PP accepts the Medicare rate as full payment). These providers receive a 5% higher payment than non-participants.
Non-participating providers (NPP) accept Medicare, but don’t agree to take assignment in all cases (i.e., they may do so on a case-by-case basis). This means that while NPPs have agreed to accept Medicare insurance, they don’t accept the approved payment as full reimbursement. NPPs may collect up to 9.25% more than the PP Medicare payment, but the NPP assumes the expenses and risks of billing and collection. For example, an NPP must collect the full extra amount on at least 1/3 of patients to break even with the PP rate.
Opt-out providers (OOP) do not accept Medicare at all. This requires submitting a specific affidavit to Medicare. OOPs must enter into a private contract with each Medicare patient. This contract will reflect the agreement that the patient will pay out of pocket for all services by that provider. After opting out, a physician can’t return to Medicare for at least 2 years. This prohibition on re-enrolling as a Medicare provider can have significant negative consequences for future contracting and employment options. In addition, the opt out status will be made public on the CMS Opt-Out Dataset and provided to Medicare Managed Care Plan administrators.
The opt out status also adds complexity to the physician’s billing relationship with health care facilities and employment groups. If the opt out physician is a member of a group practice or has assigned billing to another organization or employer, then that entity may no longer bill Medicare for services provided by the opt out physician. The opt out physician’s status does not affect the ability of the group or facility to bill Medicare for services provided by other physicians who have not opted out. Facilities may also bill for services provided due to referrals and hospital admissions made by the opt out provider. The group employing the opt-out physician may bill according to the physician’s contract with patients and for services that are not covered by Medicare. Opt out arrangements might work well in a controlled practice setting where an anesthesiologist works at a facility that does not bill Medicare such as a cosmetic surgical clinic or concierge pain medicine practice.
Although hospital participation in Medicare is voluntary, most facilities have chosen to participate. The expectation of patients and the community is that their local hospital will participate in Medicare since it is viewed as a social benefit, although most patients don’t understand its inadequacies. In addition, payments made by managed care plans contracting with the Medicare/Medicaid programs are negotiated with the hospital,meaning that for most anesthesiologists who work at a facility, opting out of Medicare is not feasible. An opt out physician may be called upon to care for a Medicare patient in an emergency at a participating facility. OOPs may furnish emergency or urgent care services to all Medicare beneficiaries. Medicare pays the limiting charge which is 5% less than PPs and up to 9.25% less than NPPs for emergency services.
Presently, very few physicians have opted out of Medicare. Only 1% of physicians refused Medicare in 2020. The highest percentage was among psychiatrists. Less than 100 anesthesiologists are listed in the CMS Opt-Out Dataset.
References and further resources:
AAFP. 2023. Getting Paid: Medicare Options. Available at: https://www.aafp.org/family-physician/practice-and-career/getting-paid/medicare-options.html
CMS. 2022a. Annual Medicare Participation Announcement. Available at: https://www.cms.gov/medicare-participation
CMS. 2022b. Manage Your Enrollment. Available at: https://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/Manage-Your-Enrollment
CMS. Undated. Medicare Benefit Policy Manual. Available at: https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Internet-Only-Manuals-IOMs-Items/CMS012673
CMS Provider Opt-Out Affidavits Look-up Tool: https://data.cms.gov/tools/provider-opt-out-affidavits-look-up-tool