The Medicare program: Enrollment and participation options

Physicians, nonphysician health care professionals, and other health care providers must be enrolled in the Medicare program to receive payment for covered services provided to Medicare beneficiaries. As the new calendar year approaches, many physicians are considering their options with respect to Medicare participation and the implications of their decision. This column answers some of the questions surgeons may have regarding their enrollment and participation options.

What is Medicare participation?

Medicare participating physicians agree to always accept assignment for all services furnished to Medicare beneficiaries. Agreeing to always accept assignment means the surgeon agrees to the Medicare-allowed amounts as full payment for a service and to collect no more than the Medicare deductible and coinsurance from the beneficiary.

How do I enroll in Medicare?

To enroll in Medicare, physicians and nonphysician providers must have a National Provider Identifier (NPI). Covered health care providers and all health plans and health care clearinghouses must use the NPIs in the administrative and financial transactions adopted under the Health Insurance Portability and Accountability Act (HIPAA). Apply for an NPI.

HIPAA-covered providers also must share their NPI with other providers, health plans, clearinghouses, and any entity that may need it for billing purposes. Apply for an NPI.

Once an NPI is issued, a health care professional may apply for enrollment in the Medicare program or make a change in enrollment information using the paper application process (form CMS-855) or the Internet-based Provider Enrollment, Chain, and Ownership System (PECOS).

Should I use the paper enrollment form or the Internet?

The Medicare enrollment application form (CMS-855) may be completed using a computer, but signatures must be handwritten. Completed paper applications and all supporting documentation must be mailed to the Medicare fee-for-service contractor serving the surgeon’s state or geographic area. Find the Medicare fee-for-service contractor for your state or geographic location. Completed applications should not be mailed to the Centers for Medicare & Medicaid Services in Baltimore, MD.

PECOS may be used instead of the Medicare enrollment application (CMS-855). Physicians and nonphysician providers can access PECOS by using the user IDs and passwords established when they applied online to the National Plan and Provider Enumeration System (NPPES) for their NPIs. For additional information regarding Medicare enrollment in PECOS, visit the CMS website.

What are my options for participation in Part B Medicare?

The only options are participation or nonparticipation. Both options require the provider to file claims with Medicare. Participating (PAR) providers agree to accept Medicare payment for services rendered to program beneficiaries, who have 80 percent of each service covered by Medicare with the remaining applied to the patient copayment. The patient (or possibly the patient’s secondary insurer) is responsible for the 20 percent copayment. The provider cannot bill the patient for amounts in excess of the Medicare-allowed amount.

Nonparticipating (non-PAR) providers may determine on an individual claim basis whether to accept assignment. Medicare-approved amounts for services provided by non-PAR providers (including the 80 percent from Medicare plus the 20 percent copayment) are set at 95 percent of Medicare-approved amounts for PAR providers. However, non-PAR providers may charge more than the Medicare-approved amount.

The maximum amount that non-PAR providers may charge for unassigned claims is called the “limiting charge.” The limiting charge for a service is an amount equal to 115 percent of the Medicare-approved amount for non-PAR providers. See the table below for a list of Medicare participation options.

Medicare participation options*
(service with $100 Medicare allowable amount)

Payment arrangement Total payment rate Amount from Medicare Payment amountfrom patient
PAR physician 100% Medicare fee schedule = $100 $80 (80%) carrier direct to physician $20 (20%) paid by patient or supplemental insurance
Non-PAR/assigned claim 95% Medicare fee schedule = $95 $76 (80%) carrier direct to physician $19 (20%) paid by patient or supplemental insurance
Non-PAR/unassigned claim Limiting charge of 115% of 95% Medicare fee schedule (effectively, 109.25%) Medicare fee schedule = $109.25 $0 $76 (80%) paid by carrier to patient + $19 (20%) paid by patient or supplemental insurance + $14.25 balance bill paid by patient
*Available at: http://www.ama-assn.org/ama1/pub/upload/mm/399/medicare-par/know-options-medicare-participation-guide.pdf.

What is the deadline for Medicare participation in 2014?

Typically, physicians have from November 15 to December 31 of each year to change their Medicare participation or nonparticipation status, and any changes would take effect January 1 of the following year. However, due to the 17-day government shutdown in October, CMS delayed the release of the Medicare physician fee schedule final rule, which lists payment rates for services covered under Medicare Part B. Appropriately, the ACS sent a letter to CMS in November, urging them to extend the period of time during which physicians may modify their Medicare participation status. At press time, the final rule had not been released, and CMS had not issued a response.

Physicians who want to continue their current PAR or non-PAR status do not need to take any action.

What does it mean to “opt out” of Medicare?

Opting out of Medicare means that a provider (physician, osteopath, and selected nonphysician providers, such as a clinical psychologist, physician assistant, nurse practitioner, clinical nurse specialist, certified registered nurse anesthetist, certified nurse midwife, and so on) have decided not to participate in the Medicare program. Providers who opt out may enter private contracting agreements with Medicare beneficiaries and charge patients without being subject to the Medicare physician fee schedule.

Health care professionals are prohibited from opting out on a claim-by-claim or patient-by-patient basis. Once providers have opted out of Medicare, they cannot submit claims to Medicare for any of their patients for a two-year period.

Nonetheless, a provider who opts out may order, certify, or refer a beneficiary for Medicare-covered items and services as long as the provider is not reimbursed for the services, except for emergency and urgent care services. For example, if a physician who has opted out of Medicare refers a patient for services, such as durable medical equipment or inpatient hospitalization, those services would be covered by Medicare.

Is it possible to opt out of the Medicare program in the middle of the calendar year?

PAR providers may opt out at the beginning of each calendar quarter (January, April, July, or October). A valid affidavit postmarked 30 days before the first day of each new quarter must be submitted. Those providers who provide services to Medicare beneficiaries but who have non-PAR status may opt out at any time. However, the date on which the opt out becomes effective must be after the date on which the provider signs the affidavit.

If I participate in Medicare am I required to accept new patients?

No. Medicare participation does not require a physician’s practice to accept new Medicare patients. The Medicare participation agreement only directs how much physicians may charge Medicare patients for services.

What if I have opted out of Medicare but provide emergency or urgent care services to a Medicare beneficiary?

Physicians who have opted out of Medicare may provide emergency or urgent care services to a Medicare beneficiary even if they have not previously entered into a private contract with the patient, if the provider:

  • Submits a claim in accordance with Medicare payment requirements and other instructions, including but not limited to complying with proper coding of emergency or urgent care services furnished by physicians who have opted out of Medicare
  • Collects no more than the Medicare charge

If I opt out of Medicare and then join a new practice a year later and need to start participating in Medicare again, is it possible to opt back in?

No. After the initial 90-day effective period a provider may not participate in the Medicare program until the two-year opt-out period has ended.

For additional information, review the Medicare Enrollment for Physicians, Nonphysician Practitioners, and Other Health Care Suppliers fact sheet.


Editor’s note
The College is not recommending or offering legal advice on any of the options discussed.

Tagged as: , , , ,

Contact

Bulletin of the American College of Surgeons
633 N. Saint Clair St.
Chicago, IL 60611

Archives

Download the Bulletin App


Get it on Google Play