Before treating Medicare beneficiaries, consider whether you want to accept Medicare’s payment or contract privately with clients. Psychologists must make one choice for all their clients.
Health care professionals are required by law to submit claims to Medicare for services furnished to Medicare beneficiaries under a provision known as mandatory claims submission. Even those who never applied to become Medicare providers must abide by this requirement.
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What is “opting out”?
Certain health care professionals, including psychologists, have the option of privately contracting with Medicare beneficiaries for services rather than submitting claims to Medicare. Known as the “opting out” process, this alternative allows select providers to treat Medicare beneficiaries without Medicare’s payment restrictions. Under Medicare’s rules, providers do not have to enroll in Medicare before they can opt out and privately contract with a beneficiary.
The primary difference between enrolled Medicare providers and those who furnish services through private contracting lies in the amount of the fee and how it is collected. Psychologists who opt out of Medicare and privately contract set their own rates and are paid directly by the beneficiary. Otherwise they must submit claims to Medicare for covered services furnished to Medicare beneficiaries and accept Medicare’s payment amount.
What to consider
Opting out applies to all services and all clients
Psychologists who opt out must do so for all services provided to all Medicare beneficiaries, including those in Medicare Advantage plans. Psychologists cannot opt out of Medicare for some beneficiaries but not others. In deciding whether to opt out, psychologists should consider how many of their Medicare beneficiaries would agree to pay all costs out of pocket.
The beneficiary has to agree
A psychologist may not receive any Medicare payments for services furnished to a Medicare beneficiary with whom the psychologist has privately contracted. In turn, the beneficiary agrees to give up Medicare payment for services furnished by the psychologist and to pay the psychologist without regard to any limits that Medicare would otherwise apply to the charges.
You must file with the MAC for your state
To enter into private contracts with Medicare beneficiaries, the psychologist must file an affidavit with the Medicare Administrative Contractor (MAC) for their state in which they agree not to file any Medicare claims for a period of two years and to meet certain other criteria. If an affidavit was created on or after June 16, 2015, the affidavit will be automatically renewed every two years unless the psychologist notifies the MAC otherwise at least 30 days before the 2-year period expires; if this is not done, you will be locked in for two more years.
Psychologists interested in privately contracting with Medicare beneficiaries should contact their MAC’s provider enrollment department. Most MACs have sample affidavits and private contracts posted on their websites.
More information about opting out of Medicare is available in the Manage Your Enrollmentopens in new window section of the the Centers for Medicare and Medicaid Services website.