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Opting Out of Medicare

Physicians and Suppliers Who are Currently Opted Out:

Opt Out Affidavit

A provider can opt out of Medicare and choose not to participate in Medicare reimbursement of any items or services provided for a two-year time period.

When a provider opts out of Medicare, no services provided by the provider are covered by Medicare, and no Medicare payment can be made to the provider directly. The beneficiary must enter into a private contract with the provider, agreeing to forego Medicare payment for services furnished by the provider. The beneficiary acknowledges that he or she is responsible for payment for services provided, without regard to any limits that would otherwise apply to what the provider could charge.

Note: A provider cannot choose to opt out for some Medicare beneficiaries but not others, or for some services but not others.

How to Opt Out

To opt out of Medicare, a provider must perform the following steps:

1.  File an affidavit

The provider must complete and file an affidavit that meets the established criteria and send it to Cahaba. You can use the provided Opt Out Affidavit above as an example if you do not wish to create your own version.

Mail to:

Medicare Part B
Attn:  Provider Enrollment
Post Office Box 6169
Indianapolis, IN  46206-6169

The opt-out affidavit must:

  • Be in writing and be signed by the provider
  • Contain the provider’s full name, address, telephone number, National Provider Identifier (NPI) or billing number (if one has been assigned), Provider Transaction Access Number (PTAN) if one has been assigned, or, if neither an NPI nor a PTAN has been assigned, and the provider’s Tax Identification Number (TIN)
  • State that, except for emergency or urgent care services, during the opt-out period the provider will provide services to Medicare beneficiaries only through private contracts that meet the criteria for private contracts for services that, but for their provision under a private contract, would have been Medicare-covered services
  • State that the provider will not submit a claim to Medicare for any service furnished to a Medicare beneficiary during the opt-out period, nor will the provider permit any entity acting on his or her behalf to submit a claim to Medicare for services furnished to a Medicare beneficiary, except for emergency and urgent care services provided to a Medicare beneficiary with whom he or she has not signed a private contract.
  • State that, during the opt-out period, the provider 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, 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+Choice plan
  • State that a provider who opts out of Medicare acknowledges that, during the opt-out period, 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
  • State a promise by the provider to the effect that, during the opt-out period, the provider agrees to be bound by the terms of both the affidavit and the private contracts that he or she has entered into
  • Acknowledge that the provider recognizes that the terms of the affidavit apply to all Medicare-covered items and services furnished to Medicare beneficiaries by the provider during the opt-out period (except for emergency or urgent care services furnished to the beneficiaries with whom he or she has not previously privately contracted) without regard to any payment arrangements the provider may make
  • With respect to a provider who has signed a Part B participation agreement, acknowledge that such agreement terminates on the effective date of the affidavit
  • Acknowledge that the provider 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 and that the rules of Section 3044.28 apply if the provider furnishes such services.
  • Identify the provider sufficiently that the carrier can ensure that no payment is made to the provider during the opt-out period. If the provider has already enrolled in Medicare, this would include the provider’s Medicare PTAN, if one has been assigned. If the provider has not enrolled in Medicare, this would include the information necessary to be assigned a PTAN.
  • Be filed with all carriers who have jurisdiction over claims the provider 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.

Effective Dates of Opt-Out Affidavits

Non-participating providers can opt out at any time by filing a valid opt-out affidavit. The effective date of the opt out period will be the date specified in the aff

Participating providers can opt out if they file a valid opt-out affidavit that is received by the Cahaba at least 30 days before the first day of the next calendar quarter. The effective date of the opt-out period is the first day in that quarter (1/1, 4/1, 7/1, or 10/1). Opt-out providers may not provide services under private contracts with beneficiaries earlier than the effective date of the affidavit.

The provider is responsible for filing a new opt-out affidavit every two years before the current affidavit expires and is required to have patients sign new contracts once a new affidavit is in place.

2. Create a Private Contract

A private contract is only needed for services that are covered by Medicare and where Medicare might make payment if a claim were submitted. A private contract must:

  • Be in writing and in print sufficiently large to ensure that the beneficiary is able to read the contract
  • Clearly state whether the provider is excluded from Medicare
  • State that the beneficiary or his or her legal representative accepts full responsibility for payment for the provider’s charge for all services furnished by the provider
  • State that the beneficiary or his or her legal representative agrees not to submit a claim to Medicare or to ask the provider to submit a claim to Medicare
  • State that the beneficiary or his or her legal representative understands that Medicare payment will not be made for any items or services furnished by the provider that would have otherwise been covered by Medicare if there was no private contract and a proper Medicare claim had been submitted
  • State that the beneficiary or his or her legal representative enters into the contract with the knowledge that he or she has the right to obtain Medicare-covered items and services from providers who have not opted out of Medicare, and that the beneficiary is not compelled to enter into private contracts that apply to other Medicare-covered services furnished by other providers who have not opted out
  • State the expected or known effective date and expected or known expiration date of the opt-out period
  • State that the beneficiary or his or her legal representative understands that Medigap plans do not, and that other supplemental plans may elect not to, make payments for items and services not paid for by Medicare
  • Be signed by the beneficiary or his or her legal representative and by the provider

3.  Implement the Private Contract

Private contracts must:

  • Be provided (a photocopy is permissible) to the beneficiary or to his or her legal representative before items or services are furnished to the beneficiary under the terms of the contract
  • Be retained (original signatures of both parties required) by the provider for the duration of the opt-out period
  • Be made available to CMS upon request but only with permission of the beneficiary or his/her legal representative.
  • Be entered into for each opt-out period

A contract is not valid if it is entered into by a beneficiary or by the beneficiary’s legal representative when the Medicare beneficiary is facing an emergency or urgent health situation.

Coverage of emergencies and urgent health situations

The following Medicare coverage applies when a provider has opted out of Medicare and provides services for an emergency or urgent health situation.

  • Medicare will make payment for covered, medically necessary services provided by a provider who has opted out, in emergency or urgent care situations. The provider cannot charge more than a nonparticipating provider would be permitted to charge, and must submit a claim on the beneficiary’s behalf.
  • Medicare will also make payment on covered, medically necessary services ordered by a provider who has opted out, as long as he or she has a Provider Transaction Access Number (PTAN) and the provider providing the services has not opted out of Medicare.
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