Should You Opt Out of Medicare? Pros and Cons

Leigh Page


November 13, 2018

In This Article

Weighing the Pros and Cons of Leaving Medicare

Accepting Medicare patients at your practice has become a double-edged sword for some physicians. On the one hand, you get to help older patients stay healthy and deal with disease, but on the other, you have to put up with reduced payment and jump through myriad hoops just to get reimbursed for your work.

With the growth of concierge care, membership medicine, and direct-pay practices, some physicians have found ways to either reduce the number of Medicare patients in their overall panel or cut them out completely.

Before you go a similar route, here are some rewards and risks to consider.

Pro: It's Becoming More Acceptable

The number of opted-out physicians has skyrocketed in the past 5 years. In all of 2013, only 130 physicians opted out of Medicare, according to data from the Centers for Medicare & Medicaid Services (CMS). Then that number rose to 1600 in 2014, 3500 in 2015, and 7400 in 2016.[1]

"Lately, there has been a lot of discussion among physicians about opting out," says Michael La Penna, a practice management consultant in Grand Rapids, Michigan. "For doctors, it's about freedom from bureaucracy or the right to contract with patients directly. And it's also economic, because Medicare usually pays less than private insurers."

Still, only 0.7% of all doctors had opted out by 2017, according to a survey by the Kaiser Family Foundation (KFF). In addition, only certain kinds of doctors tend to opt out. KFF showed that three quarters were either psychiatrists (38.1%) or primary care physicians (37.3%).[2]

Cutting ties with Medicare is a huge step for most doctors. They have to agree to give up all Medicare reimbursement, except in emergencies. Their patients pay the full bill, and patients cannot turn around and bill Medicare. Also, most supplemental insurers won't pay for an opted-out doctor's services, and Medicare Advantage plans are unlikely to pay these doctors.[3]

When doctors consider opting out, "there is always apprehension," says Lawrence R. Huntoon, MD, a neurologist in Derby, New York, who edits the Journal of the Association of American Physicians and Surgeons, for the organization that opposes government-run healthcare.

"But I tell them, 'Fear is the fence that keeps you in the pen,'" he says. "You can opt out and have a very busy practice." Huntoon knows firsthand: He opted out of Medicare 14 years ago.


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