Your Medicare enrollment status: Are you in or out?

Understand your options for providing services to Medicare beneficiaries.

By Government Relations staff

Health care professionals, including psychologists, often assume that if they wish to treat Medicare beneficiaries they must become enrolled providers, bill Medicare for their services, collect co-payments from beneficiaries and agree to accept Medicare’s designated payment amounts. Many do not realize that they can choose to go through the process of “opting out.” Those who do so contract privately with Medicare beneficiaries and are not subject to Medicare’s payment restrictions. 

If you see any Medicare beneficiaries, you must do one of two things: be enrolled as a Medicare provider or opt out of Medicare through your Medicare Administrative Contractor and privately contract with any Medicare patients. 

Private contracting is an option for psychologists who do not want to become Medicare providers but are willing to furnish services to beneficiaries. The primary difference between enrolled Medicare providers and those who furnish services through private contracts lies in how fees are collected. Medicare providers receive payment directly from Medicare, while those who opt out and privately contract collect payment directly from the patient. 

Private contracting is also an option for psychologists who become Medicare providers but later wish to leave the program. Psychologists who opt out and privately contract must do so for all services provided to all Medicare beneficiaries; they cannot chose to opt out of Medicare for some beneficiaries but not others.

Providers who are thinking about opting out of Medicare should consider whether beneficiaries would be able or willing to pay directly for services. 

Enrollment not required for opting out 

Under Medicare’s rules, eligible health care professionals do not have to enroll in Medicare before they can opt out and privately contract with a beneficiary. There was confusion in past years when some Medicare Administrative Contractors (MACs) indicated that a psychologist who was not a Medicare provider had to first enroll in Medicare in order to then opt out and contract privately with beneficiaries. APA advised the Centers for Medicare and Medicaid Services (CMS) of the misinformation and asked the agency to communicate its policy on private contracting to all MACs. In response to APA’s request, CMS circulated a transmittal to all MACs in January 2010 stating that health care professionals are not required to become Medicare providers in order to opt out and privately contract. 

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. 

To enter into private contracts with Medicare beneficiaries, the health care professional must file an affidavit with the MAC for their state in which they agree to not file any Medicare claims for a period of two years and to meet certain other criteria. This affidavit must be refiled every two years in order for the health care professional to retain their opt-out status. 

Psychologists interested in privately contracting with Medicare beneficiaries should contact their MAC’s provider enrollment department for information about the opting out process and the requirements involved in private contracting. Some MACs have sample contract forms that providers may use or adapt in opting out of Medicare. Check with your MAC provider enrollment department for guidance on how to contract privately with Medicare beneficiaries. 

More information about opting out and maintaining opt-out status (PDF, 105KB) is available on the Regulations and Guidance section of the CMS website. 

Questions about Medicare may be sent by email to the Government Relations Office for the APA Practice Organization or by phone at (202) 336-5889.