Medicare opt-out requires meticulous paperwork

Contract Language. By Steven M. Harris, amednews contributor. Jan. 6, 2003.

CONTRACT LANGUAGE

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Last month's column addressed the impact on physicians who opt out of the Medicare program and requirements for execution of mandatory private contracts. This column will specifically address the requirements of the requisite opt-out affidavit and continue to explore the implications for physicians who decide to opt out of Medicare.

A physician must file an affidavit with all Medicare carriers to which he or she submits claims, or would submit claims if not for the opt-out, for a private contract with a beneficiary to be effective.

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A valid affidavit for purposes of opting out of Medicare must be in writing, signed by the physician, and contain the physician's full name, address, telephone number, uniform provider identification number (if one has been assigned), or the physician's tax identification number.

The affidavit should state that during the opt-out period:

Except for emergency or urgent care services, the physician will provide services to Medicare beneficiaries only through private contracts that meet specific criteria.
The physician or his or her agent will not submit a claim to Medicare for any service furnished to a Medicare beneficiary.
The physician understands that he or she may receive no direct or indirect Medicare payment for services that he or she furnishes to Medicare beneficiaries with whom he or she has privately contracted.
The physician acknowledges that his or her services are not covered under Medicare and that no Medicare payment may be made to any entity for his or her services, directly or on a capitated basis.
The physician promises that he or she agrees to be bound by the terms of both the affidavit and the private contracts into which he or she has entered.

The affidavit should also:

Acknowledge that the physician recognizes that the terms of the affidavit apply to all Medicare-covered items and services furnished to Medicare beneficiaries by the physician during the opt-out period.
With respect to a physician who has signed a Medicare Part B participation agreement, acknowledge that such agreement terminates on the effective date of the affidavit.
Acknowledge that the physician 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 sufficiently so that the carrier can ensure that no payment is made to the physician during the opt-out period.
Be filed with all carriers who have jurisdiction over claims the physician otherwise would file with Medicare no later than 10 days after the first private contract into which the affidavit applies is entered.

Implications of opting out

Opting out of Medicare creates various consequences that need to be carefully considered. Some of these implications include:

Financial impact. Each physician and group practice would need to review its patient mix, costs and reimbursement to determine the financial impact of opting out in light of the all-or-nothing nature of the process.

Filings and contracts. Private contracting also would create administrative burdens, including the need for each opt-out physician to enter into a written contract with each of his or her Medicare patients, the requirement that affidavits and renewals be filed, and the need to maintain a calendar or docket system to ensure that all filings and contract renewals are made on a timely basis.

Rights of patients. Doctors must recognize the possibility that some patients may misunderstand the private contacting relationship and its implications. Maintaining and documenting effective lines of communication with patients is critical.

Policies and procedures. Each physician and group practice would have to implement procedures to identify Medicare patients and ensure that such patients are notified of the opt-out decision and are reminded of the payment arrangements when making appointments. If a practice includes some doctors who opt out of Medicare and others who participate in Medicare, procedures should be developed to identify the status of each patient and ensure appropriate treatment. Procedures should ensure that claims of opt-out physicians are not submitted to Medicare, except for emergency or urgent care services.

Credentialing requirements. Each physician and practice group should review its managed care and other arrangements to determine whether private contracting will have any adverse consequences under any of the arrangements. In particular, credentialing requirements of managed care plans, IPAs, PHOs and accreditation organizations should be reviewed to confirm that participation in Medicare is not required.

Harris, a partner at McDonald Hopkins in Chicago, concentrates on health care law and has counseled physicians, physician networks and health care groups nationally. The author and publisher are not rendering professional advice and assume no liability in connection with its use. He can be reached at 312-280-0111, or by email (sharris@mcdonaldhopkins.com).