Practice Management & Allied Staff News & Materials
Opting Out of Medicare
August 16th, 2006
One of the provisions in the recently enacted Medicare prescription drug coverage bill allows dentists to opt-out of Medicare and enter into private contracts with their patients who are Medicare beneficiaries. The enactment date of the legislation, December 8, 2003, is the effective date for this provision.
Private Contracts with Patients who are Medicare Beneficiaries
Section 603 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (P.L. 108-173) extends the legal authority to "opt-out" of Medicare to dentists. This newly established authority to enter into private contracts with patients who are Medicare beneficiaries became effective upon enactment, and this information explains how this new "right" operates.
The essence of the private contract authority is that dentists may take a series of steps that will allow them to provide patient care for Medicare covered services outside of the Medicare system and without regard to the program's payment limits and most of its other requirements. Where a dentist or other health care professional elects to opt-out, he or she is agreeing to not submit claims or to have claims submitted to Medicare for virtually all of the covered services provided. In electing to use the private contract authority, the prohibition on claims submissions applies to all of the dentist's patients who are Medicare beneficiaries, with the exception of emergency patients.
The legal authority to enter into private contracts for the provision of Medicare covered services for patients who are Medicare beneficiaries is found in Section 1802(b) of the Social Security Act. Appropriately, the title of this section is "Free Choice By Patient Guaranteed":
(a) BASIC FREEDOM OF CHOICE — Any individual entitled to insurance benefits under this title may obtain health services from any institution, agency, or person qualified to participate under this title if such institution, agency, or person undertakes to provide him such services.
The opt-out period runs for two years, and the opt-out status may be renewed for subsequent 2-year periods. During these periods, services may be provided for Medicare beneficiaries pursuant to private contracts, and Medicare payments generally will not be made.
To opt-out of Medicare, a dentist must submit a properly completed affidavit with each Medicare carrier with which he or she normally files claims, and the opt-out period would begin (for a dentist categorized as a non-participating physician) based on the date the affidavit is signed and where it is filed with the carrier(s) within 10 days after signing the first private contract with a Medicare beneficiary. (Dentists who are participating physicians under Medicare may initiate an opt-out period at the beginning of any calendar quarter, provided that the affidavits are submitted to the carriers at least 30 days before the beginning of the quarter.)
For an opt-out affidavit to be valid, it has to be in writing and contains the dentist's full name, address, telephone number, provider identifying numbers, and signature. There must be statements in the affidavit to the effect that during the opt-out:
- The dentist will provide services to Medicare beneficiaries only through private contracts during the opt-out period, except for certain emergency or urgent care services;
- Claims will not submitted to Medicare for any service furnished to a Medicare beneficiary during the opt-out period, except for certain emergency or urgent care services;
- The dentist understands that he or she may receive no direct or indirect Medicare payment for services provided for patients who are Medicare beneficiaries pursuant to the private contract;
- The dentist understands that no Medicare payment may be made to any entity for his or her services;
- The dentist promises to be bound by the terms of both the affidavit and the private contracts;
- The affidavit terminates a participation agreement; and
- Acknowledges that the dentist 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 prior to receiving care.
Private Contract Requirements
Once a decision has been made to provide Medicare covered services pursuant to private contracts, the law requires that the dentist opt-out for all of his or her patients who are Medicare beneficiaries and contracts must be executed with all of these patients. These contracts must:
- Be in writing and in large enough print to ensure that the beneficiary is able to read it;
- Identify whether the dentist is excluded from Medicare;
- Specify that the beneficiary or his or her legal representative accepts full responsibility for payment for all services furnished by the dentist;
- Explain that Medicare payment limits do not apply;
- State that claims cannot be submitted to Medicare and explain that Medicare payments will not be made for any items or services furnished by the dentist;
- Indicate that the patient knows that he or she has the right to obtain Medicare covered care from dentists who have not opted-out of Medicare, and that the beneficiary is not compelled to enter into private contracts that apply to covered services furnished by other health care professionals who have not opted-out;
- Set out 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; and
- Be signed by the beneficiary or his or her legal representative, and by the dentist.
Private contracts cannot be entered into during a time when the patient requires emergency or urgent care services, and new contracts are required for each opt-out period. The original, signed contract must be retained by the dentist for the duration of the opt-out period, and it must be available to Medicare on request. A copy of the contract must be given to the patient or his or her legal representative before care is provided under the contract terms.
Emergency and Urgent Care Services
Dentists who opt-out can still provide and submit claims for emergency or urgent care services for patients with whom they have not previously entered into a private contract.
"Urgent care service" are defined as services furnished to an individual who requires services to be furnished within 12 hours in order to avoid the likely onset of an emergency medical condition. Medicare defines an "emergency medical condition" as acute symptoms of sufficient severity (including severe pain) where a prudent layperson could reasonably expect that the absence of immediate medical attention could result in serious: jeopardy to health, impairment to bodily functions, or dysfunction of any bodily organ or part.
Early Termination of Opt-Out
Within 90-days of an initial opt-out action, the opt-out decision may be terminated by notifying all of the carriers of the termination. In this situation, a notice would have to be sent to all beneficiaries with whom the dentist had entered into private contracts of the decision to terminate opt-out and of the beneficiaries' right to have claims filed for the services furnished during the period between the effective date of the opt-out and the effective date of the termination. Any money collected in excess of the Medicare limiting charge would have to be refunded.