What are a provider’s options with Medicare? This is a question several people have asked me during the past months. Reason enough for me to summarize those options and look at their advantages and disadvantages.
Medicare is the largest sponsor of total health spending in the United States. Driven by an aging society, Medicare is expected to have the highest enrollment growth among all major insurance carriers in the coming years.
As thousands of people join the group of Medicare beneficiaries every day, would a physician or non-physician practitioner (herein summarized as provider) benefit from participating in Medicare? What does it even mean to participate in Medicare?
Whether a provider decides to participate or not in Medicare Part B is a personal choice. We will look at the individual options as well as their advantages and disadvantages to help providers make an informed decision.
One option a provider has with Medicare is participation. A participating provider agrees to accept claims assignment for all Medicare-covered services furnished to Medicare beneficiaries. This means the provider accepts Medicare’s allowed amounts as defined in the Medicare’s Physician Fee Schedule as payment in full. Balance billing the patient is not allowed. Instead, the provider has to write off the amount that their charge exceeds Medicare’s allowed amount.
Since the provider submits claims as assigned claims, Medicare will compensate the provider directly.
In case a beneficiary has Medicare supplement coverage, Medicare will forward the claim information to the respective Medigap insurer.
Medicare maintains a public list of all providers accepting Medicare. The list promotes providers and makes it easier for patients to identify a provider as a Medicare participant.
While participation is not a requirement for a provider to bill Medicare for services rendered, most providers billing Medicare chose this option and become participating providers.
The starting point for becoming a participating provider is enrollment in the Medicare Program through the Provider Enrollment, Chain, and Ownership System (PECOS). The system allows a provider to electronically submit and manage their Medicare enrollment information. Have your National Provider Identifier (NPI) ready as you will need it for the enrollment. If you forgot your NPI you can look it up at the NPI Registry. In case you do not have an NPI yet, you can create one through the National Plan & Provider Enumeration System (NPPES).
Upon enrollment with PECOS, the responsible Medicare Administrative Contractor (MAC) will issue the provider a Medicare-only number called the Provider Transaction Access Number (PTAN). The use of the PTAN is limited to a provider’s communication with their MAC.
In addition to enrollment with PECOS, the provider seeking to become a participating provider will need to submit the Medicare Participating Physician Or Supplier Agreement (Form CMS-460).
Providers do not pay an application fee for enrollment with Medicare.
After a provider has become a participating provider their status automatically renews every year. But that does not mean that they cannot change their status if needed. Medicare offers a period of about 45 days (mid-November to the end of December) every year for a participating provider to become a non-participating provider. What is a non-participating provider? Let’s find out now.
While participating providers always have to accept assignments for each submitted claim, non-participating providers can choose when to accept assignments. This also means they can decide when to receive reimbursement directly from Medicare. Non-participating providers can make this decision on a claim-by-claim basis. Keep in mind, this additional degree of freedom has some disadvantages.
When a non-participating provider submits a claim to Medicare and does not accept assignment, Medicare will not reimburse the provider directly. Instead, Medicare will reimburse the beneficiary. In that case, the provider may receive reimbursement for rendered services from the Medicare beneficiary.
Medicare pays lower rates to non-participating physicians than to participating physicians. However, a non-participating physician does not have to accept Medicare’s allowed amount as payment in full and may charge the beneficiary up to what is called the limiting charge. The limiting charge is the maximum dollar amount that the Federal Government allows a non-participating provider to charge Medicare beneficiaries for a given service. We will look at the financial details in a future post.
Apart from the financial implications, non-participating providers also face limited appeal rights for denied claims.
As with option 1, also the starting point for a non-participating provider’s enrollment with Medicare is through the Provider Enrollment, Chain, and Ownership System (PECOS). The same applies to annual auto-renewal of the status and to the period of about 45 days every year during which a non-participating provider can become a participating provider.
A provider’s options with Medicare do not stop here, since a provider may also decide to cut ties with Medicare. This is what we are going to look at next.
Normally providers submit claims on behalf of beneficiaries for all items and services they provide for which Medicare payment may be made under Part B. However, certain types of providers may “opt out” of Medicare.
When a provider opts out neither the provider nor the beneficiary will submit claims to Medicare. The provider will bill the beneficiary directly and is not bound to the allowed amounts defined in the Medicare Physician Fee Schedule. The beneficiary will pay the provider out-of-pocket and Medicare will not reimburse anyone in this case.
A provider who decides to opt-out of Medicare will have to:
Most MACs provide templates for the affidavit and the private contract. A provider can submit an affidavit to opt-out at any time and the opt-out automatically renews every two years. Medicare makes submissions for affidavits public and maintains a searchable database containing all providers who have opted out: Provider Opt-Out Affidavits Look-up Tool.
Opting out of Medicare has limitations and not all specialties are eligible to opt-out of Medicare though. Those not eligible include:
There is an exception when providers who opted out can still submit claims to Medicare. Opt-outs do not apply to a provider furnishing certain emergency or urgent care services to a Medicare beneficiary with whom they have not signed a private contract. In such a case, a provider can still submit a claim to Medicare following Medicare’s regulations and guidance (enrollment with PECOS required).
You are what you are today because of the choices you made in the past.— Jim Rohn
There you have it. Those are a provider’s options with Medicare. The list of options is not extensive, but options do exist. As indicated, each option has financial implications for a provider and a medical practice. In our next blog, we will look at those in detail and provide examples.
Did you make a choice? Which option works best for you? If you have questions or need advice for your decision, please contact us. We are happy to help.