Should You Opt Out of Medicare? Pros and Cons

Leigh Page


November 13, 2018

In This Article

Con: Specialists Risk Losing Referrals

Specialists get referrals because they can cover all kinds of payers, including Medicare, La Penna says. "Staff at a primary care practice are not going to pick one set of specialists for referrals of Medicare patients and another one for the rest," he says.

La Penna says some specialists can survive without Medicare patients, but gastroenterologists, cardiologists, and pulmonologists depend on them.

"To make up for loss of Medicare patients, you'll need to change the practice," he says. For example, an orthopedic surgeon may convert his practice into sports medicine, aiming for a younger clientele. "But this takes a lot of time and talent," La Penna says, adding that sports medicine is very competitive.

Huntoon, however, is living proof that a specialist can opt out. He is a neurologist, another specialty often dependent on Medicare patients, but he doesn't rely on referrals. "I've gotten very few referrals from physicians," he says. "The vast majority of my patients have come from word of mouth from other patients."

As an opted-out specialist, Huntoon provides procedures not on Medicare's list of covered services. One of his chief offerings is the canalith repositioning procedure for benign paroxysmal positional vertigo, which helps prevent falls, he says. An opted-out physician can offer this procedure because Medicare doesn't cover it at all, he says.

Con: Opting Out Is Hard to Do

Physicians who want to opt out have to think long and hard about it because if you fail, it's hard to go back into Medicare, La Penna maintains. "This is usually an irreversible decision," he says.

He adds that the whole process of opting out—deciding whether to do it, applying, and finally regaining a positive bottom line—will take 3-4 years.

How to Opt Out of Medicare the Right Way

The first step is to send a short survey to all Medicare patients or hold a focus group with some patients, he says. This will help you get a rough idea of how many patients would follow you and what they expect from you, including the rates you would charge.

Once physicians have decided to opt out, they are required to send letters about their plans to all Medicare patients; file affidavits with all their Medicare contractors; and sign contracts with all Medicare patients who want to stay. Because opted-out physicians can be fined for sending charges to Medicare, the practice must establish procedures to prevent an accidental Medicare filing.

There are only four dates a year when doctors can opt out: January 1, April 1, July 1, and October 1. Medicare carriers must receive the opt-out affidavit at least 1 month before the date you choose.

This seems complicated, but Huntoon says it's no more complicated than a lot of other Medicare processes that you would need to deal with if you stayed in Medicare. "It's more complicated to stay in Medicare, with all the hoops and hurdles," he says.

Moreover, opting out has become simpler because physicians no longer have to renew their opt-outs every 2 years, he adds.

Even so, Huntoon advises taking a step-by-step approach. "Start with your pinky toe," he says. "Get rid of the most abusive insurance company first. If that works, then it will be easier to get rid of Medicare."

He adds that opted-out physicians have a safety net. If they have second thoughts within 90 days of opting out, they can opt back in with little fuss. But after that, they have to wait for 2 years to opt back in, and they can only use the 90-day option once. Medicare doesn't want doctors constantly jumping in and out.


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