Physicians and practitioners who don't want to enroll in the Medicare program (or who want to get out) may “opt-out” of Medicare. This means that neither they nor the patient (Medicare calls them the "beneficiary") submits the bill to Medicare for services rendered.
Providers opt out of Medicare for a variety of reasons. Most opt out because they do not want to be subject to Medicare limits on what they can charge for their services. Others opt out because they don't want the administrative headache of keeping track of covered and non-covered services. Practically speaking, an opted-out single-provider practice is treated like a cash-based practice that operates outside of the insurance networks.
If you choose to opt-out, you must submit an affidavit to Medicare expressing your decision to opt-out of the program.
Opt out periods last for two years and generally cannot be terminated early. The exception is if you have opted out for the very first time and you change your mind within the first 90 days.
Older resources will advise that you have to renew the opt-out process every two years. Opt-out affidavits signed on or after June 16, 2015 will automatically renew every two years. Therefore, physicians and practitioners that sign valid opt-out affidavits on or after June 16, 2015 will no longer be required to file renewal affidavits. Now, like the Ron Popeil infomercials, you can "set it and forget it."
However, if circumstances change, you may cancel by notifying all Medicare contractors with which you filed an affidavit in writing at least 30 days prior to the start of the next two-year opt-out period.
Providers that opt out should enter into a private contract for, and prior to, rendering any covered services to a Medicare Part B Beneficiary. A private contract is signed between the practitioner and the beneficiary that states, that neither one can receive payment from Medicare for the services that were performed. Instead, the beneficiary pays the practitioner out-of-pocket (aka, cash pay) and neither party is reimbursed by Medicare.
This ensures the functional medicine doctor is not subject to Medicare reimbursement rates (which are typically lower than "market" rates). It also avoids the logistical hassle of keeping up with the shifting definition of covered services under Medicare--and eliminates the risk of making mistakes on reimbursement claims.
*NOTE: As of this writing, you must renew this contract every two years with the patient. This is a separate requirement from submitting the affidavit to Medicare. Don't follow the informercial directive for this separate document.
Every practice is different. Consider your own circumstances. If you are a cash-based practice that does not accept insurance, it might be wise to examine your status with Medicare as well.