Should You Opt Out of Medicare? Pros and Cons

Leigh Page


November 13, 2018

In This Article

Considering Concierge Care

Huntoon urges doctors to go a step further and opt out of all third-party payers, as he did. This means getting all of their income from patients—and become, in effect, a concierge or direct-pay physician. Doctors save a great deal of money by doing this. They can shut down their billing functions and pass savings on to patients, he says.

However, many practice management advisors believe that opting out is not a tenable option for most doctors. David Zetter, a practice management advisor in Mechanicsburg, Pennsylvania, says he usually tries to dissuade physicians from opting out.

"In most cases, there is no justification for opting out," he says. "Basically, the only doctors who benefit from this are the ones who want to go into concierge."

Indeed, there are signs that the phenomenon may have plateaued. According to the CMS data, the number of opt-outs fell by almost one half in 2017, to 3732. It may be too early to tell, though, whether at least part of this decline has to do with dropping a requirement that opted-out physicians must renew their status every 2 years.

Pro: Escape All of Those Medicare Requirements

Most physicians who opt out of Medicare do so because of the requirements that the federal program imposes on them, Huntoon says.

"Many physicians feel trapped in a system that grinds them down," he says. "They're looking for an escape hatch."

Medicare requirements include everything from reporting to the Merit-based Incentive Payment System (MIPS) to a variety of other regulations, such as having to hire interpreters for patients without any financial support from Medicare—a so-called "unfunded mandate."

MIPS is expected to penalize doctors in small groups, in particular. CMS projects that 87% of physicians in groups with fewer than 25 clinicians in MIPS will pay penalties in 2019 owing to low MIPS performance scores in 2017.[4]

In 2018, the maximum penalty for physicians in MIPS will be 5% of their Medicare reimbursements, according to the American Academy of Ophthalmology (AAO). That will amount to an average penalty of $23,437 for the average ophthalmologist, the AAO estimated.[5]

Zetter, however, maintains that MIPS reporting should not be a big problem, owing to changes in electronic health record (EHR) systems. "Many EHR systems will automatically put together the data needed," he says. "It only takes a little effort on the physician's part to get the data ready."

Follow the Rules or Get Fined

But participating physicians face other Medicare burdens besides MIPS. For example, Medicare directs how physicians practice medicine by choosing what services will be covered and what won't be, Huntoon says.

"If you're a participating physician and you charge a single penny for a noncovered service, it's considered balance-billing and you can be fined," Huntoon maintains.

In these cases, however, physicians often have an out. They can remove their liability for some services not covered by Medicare by having patients fill out an advance beneficiary notice (ABN), according to Cohen. The patient still has to pay out of pocket, but the ABN protects the physician from being fined for providing the service.[6]


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