How to Opt-Out of Medicare and Still Get Paid

Your Guide to Opting Out of Medicare as a Mental Health Provider: and How Medicare Clients Can Get Reimbursed

Yes, it is possible to see a Medicare client, get your full fee, and for the client to not have to pay for your service. The process isn’t even that difficult. Unlike most things insurance-related, the process is relatively seamless once you know what to do and how to get the forms you need.

Medicare is a federal health insurance program that offers coverage to millions of Americans, including those seeking mental health services. While being a Medicare provider can have its advantages, some mental health professionals “opt out” of the program.

What Does “Opt-out” Mean?

To opt-out of Medicare means you officially refuse to be a Medicare provider.  Opting out allows the provider to charge a Medicare client their full fee.  A little-known fact is that many Medicare recipients can get these services paid for by their secondary insurance.

This blog explains who is eligible to opt out, the process of opting out, reasons for this decision, and how clients can be reimbursed when their mental health provider has opted out.

This information is dry and a bit tedious. But if you want to learn how to get paid your full fee for a Medicare client when you don’t take Medicare – read on. 

Who Can and Can’t Opt-out of Medicare?

1. Licensed Professionals: To “opt out” of Medicare, you must be a provider who can take Medicare. To opt out of Medicare, you must be a licensed mental health professional, such as a psychiatrist, psychologist, social worker, or counselor authorized, to provide services in your state.
2. The Exceptions: If you are an MFT or counselor you are not eligible until January 2024. But 2024 is only a couple months away, so keep reading.
3. Private Practice Providers: Typically, only providers in private practice can opt out of Medicare. Mental health professionals employed by hospitals, clinics, or other healthcare facilities may not have the option to opt out individually.

Providers must follow specific enrollment procedures, and opting out should be done carefully after considering the implications. If you don’t opt out and see Medicare clients anyway, Medicare could force you to repay all the client’s money.  Keep in mind that opting out is not retroactive!  So don’t see a Medicare client with the intention of opting out in the future and getting repaid after the fact.  

Why Opt Out of Medicare?

Providers choose to opt out of Medicare for various reasons including:

1. Autonomy: Opting out allows mental health professionals more control over their practice, including setting their fees.
2. Fee Structure: Some providers believe that Medicare reimbursement rates do not adequately compensate them for their services. Opting out allows them to charge their preferred fees.

How to Opt Out of Medicare

The process of opting out of Medicare involves several steps:

1. Notify Medicare: To opt out, you must send a written letter to the Medicare Administrative Contractor (MAC) for your region or jurisdiction. This letter should state your intent to opt out, specify the effective date, and include your National Provider Identifier (NPI) number.

Date the affidavit the day you plan to opt-out. This is the date your “effective date” and the date your contract starts.

To avoid delays, include a copy of your license with the contract! This is not specified anywhere in the official directions, but one therapist told me he had to reapply with a copy of his license.

Here is the official opt-out affidavit with Medicare:  https://www.ngsmedicare.com/documents/20124/121641/392_Medicare_Opt_Out_Affidavit.pdf/70bee5bb-ac5f-b32f-f39f-79223e571d15?t=1638558619546

Here’s where to find your MAC jurisdiction:

https://www.cms.gov/files/document/macs-state03282023pdf.pdf. This is a list of Medicare Administrative Contactors or MACs by state. 

To find your jurisdiction, enter the name of the MAC in your search engine. (Ex: Palmetto BGA, LLC, Novitas Solutions, Inc., National Government Services, Inc.) 

After your opt out affidavit is received, Medicare will send you a letter indicating it’s been accepted. This usually happens within a week or two.

You can confirm your opt-out status on this website: https://data.cms.gov/tools/provider-opt-out-affidavits-look-up-tool

• Contract with Patients: When you opt out, you must also enter into private contracts with your Medicare patients. These contracts state that you will not bill Medicare for their services, and they agree to pay you directly. This contract can be on your letterhead or not. Here’s the Medicare letter for clients to complete:  https://www.ngsmedicare.com/documents/20124/121641/529_0309_Medicare%2BPrivate%2BContract%2BForm_FF.pdf/6978c8fe-bc14-0e59-492f-dbcf3a3a3245?t=1611698980243

Do not skip this step. Medicare can audit compliance with private contracts.  If your contract does not include all the requirements in the time-frame required, Medicare can force you to refund your private-pay client. They can also require you to file claims for the rest of that opt-out period. The requirements are on the enrollment guide.

Keep a copy of both these contracts on file. You need to have them if requested by the MAC, or Center for Medicare and Medicaid Services (CMS).

• Opting out is a one-time process. The 2-year reevaluation rule was recently changed! You do not need to reapply.

Client Reimbursement

“In a private contract, the Medicare beneficiary agrees to give up Medicare payment for services furnished by the eligible practitioner and to pay the eligible practitioner without regard to any limits that would otherwise apply to what the eligible practitioner could charge.” (CMS)

Clients of mental health providers who have opted out of Medicare can still receive reimbursement for services. The process works as follows:

1. Private Payment: As stated above, Medicare clients who see an opted-out provider are required to pay the provider directly for the services received. Providers can set their fees without Medicare restrictions.
2. Receipts and Superbills: Providers give clients a detailed receipt or superbill, which includes all the necessary information, much the same way as when working with a client who has a PPO insurance plan.
3. Submit Claims: Clients can submit these receipts to their secondary insurance. Their secondary insurance should reimburse them for the therapist’s full fee or close to it, depending on the fee.
4. Confirm with the Secondary Insurance: Before entering into the agreement, have the client confirm this arrangement with their secondary insurance company, including how much of the fee the insurance company covers. The insurance company should have an opt-out form on their website for the client to fill out. This form confirms that the client agrees to pay you directly. The representative should provide you or your client with a link to the form. Have the representative stay on the line until the form is completed to avoid any delays due to not understanding some obscure wording on the form.

The Exception

This process only works for people who have secondary insurance, not supplemental insurance. (Don’t ask me the difference. It’s too complicated to explain here. Just make sure you know which the client has.)

This process does not work for clients who have Medicaid as their secondary insurance. Medicaid does not pay the clinician’s fee. To get paid when seeing a Medicare client whose secondary insurance is Medicaid, you, the therapist, must be a Medicare provider.

Opting out of Medicare does not relieve you of the requirement to do good documentation. Even if you only see private pay clients, it’s important to know how to justify medical necessity to provide high-quality care and ensure ethical and legal compliance within the mental health profession.

Beth Rontal, LICSW, the Documentation Wizard® is a nationally recognized consultant on mental health documentation. Her Misery and Mastery^SM trainings and accompanying forms are developed to meet Medicare requirements. Her forms have been approved by 3 attorneys and a bioethicist, and have been used all over the world. She mastered her teaching skills with thousands of hours supervising and training both seasoned professionals and interns when supervising at an agency for 11 years. Beth’s Documentation Wizard® training program helps clinicians turn their clinical skill and intuition into a systematic review of treatment that helps to pass audits, protect income, and maintain professional standards of care.