Saying no to Medicare

Key Points

Physicians in every specialty, in every city and town, in every state in the country lament almost daily the reimbursement levels and other frustrations associated with caring for Medicare patients. Yet, most physicians continue to see at least some patients who are covered under the government-run plan. Precious few doctors opt out of the system completely, but that could change if steps aren't taken soon to repair a broken system.

It's uncertain how many physicians have completely opted out of the Medicare system, but experts say that anecdotally, the numbers seem to be on the rise; and physicians who do see Medicare patients often restrict their numbers out of sheer economic necessity. "When Congress looks at the figures, they see 97 to 98 percent of physicians still taking Medicare," says Wilson. However, he says those numbers are misleading because so many physicians limit the number of Medicare patients they accept into their practices.

In the meantime, some doctors have decided to "just say no" to Medicare-a decision that requires much analysis, and if it's right for you and your practice, much planning. Provisions in the 1997 Balanced Budget Act give physicians and patients the option to have a fee-for-service relationship in which neither party bills or is reimbursed by Medicare. Simply put, under what's called "private contracting," you set your fees at a level you feel is reasonable and patients pay at the time of service. (For an in-depth legal article on this topic, see the June 4, 2010, issue: Malpractice Consult, "Medicare opt-out decision requires detailed knowledge".)

"I'D HAD ENOUGH"

The tipping point for George Watson, DO, of Park City, Kansas, came after he attended "Thrive, Don't Just Survive," a seminar sponsored by the Association of American Physicians and Surgeons ( http://www.aapsonline.org) in 2003. A family physician who wanted to focus his practice on age management, Watson was underwater financially to the tune of $200,000 after practicing what he calls "traditional insurance-based medicine" for more than two decades. "After years of being handcuffed by thousands of pages of insurance company and Medicare regulations and not being able to do the things I wanted to do for patients, I'd had enough," says Watson, who is now president of AAPS. At the seminar, he heard about doctors who contracted directly with patients and was intrigued. "I thought, if they can do it, I can, too," he says.

Kent Moore, manager of healthcare financial and delivery systems at the American Academy of Family Physicians (AAFP), says doctors considering opting out must fully understand what that means. "It doesn't mean going non-par. It means getting out altogether and treating patients on a private contract basis," he explains.

There are two key technical points to remember if you are thinking about opting out. First, it's an "all or nothing" proposition. You cannot opt out for certain Medicare patients (the sickest, most demanding, or least compliant, for example) and continue to bill for other Medicare patients. There are some exceptions for providing emergency or urgent care services that you should become familiar with if you go this route. Second, once you opt out, you cannot submit claims for Medicare patients for a period of two years. "It's not a revolving door," Moore says.