Information for Physicians Who Refuse to Enroll, Opt-Out of the Medicare Program, or Submit Claims to Medicare

We have received inquiries asking whether physicians may refuse to enroll in Medicare and refuse to submit claims to Medicare when they furnish Medicare-covered services to beneficiaries. These unenrolled physicians would prefer if beneficiaries were to submit claims on their own using the CMS-1490S form.

To stay in compliance with Medicare law, a physician who treats a Medicare beneficiary for a Medicare-covered service must either:

1. enroll in Medicare and submit a claim on that beneficiary's behalf for those services;
2. opt out of Medicare and enter into a private contract with the beneficiary for those services; or
3. furnish the Medicare-covered services for free.

A physician who wants to treat (and receive payment from) a Medicare beneficiary will stay in compliance with the law by either enrolling in Medicare and filing claims on the beneficiary's behalf or by opting out of Medicare and entering into a private contract with the beneficiary. Moreover, it is important to note that in order to receive a Medicare payment for covered items or services – whether directly from Medicare or from the beneficiary who is, in turn, reimbursed by Medicare, - a provider or supplier must be enrolled in the Medicare program. See the Code of Federal Regulations (CFR) title 42, part 424, section 500 (271 KB) et seq. for the regulations regarding establishing and maintaining Medicare billing privileges.

A physician can enroll in Medicare and choose to be either participating or nonparticipating. Physicians who enroll in Medicare and also enter into a participating physician or supplier agreement with Medicare agree to always accept assignment for all Medicare-covered services. Physicians and practitioners who enroll in Medicare but do not enter into a participating physician or supplier agreement with Medicare are characterized as nonparticipating physicians. Nonparticipating physicians choose on a claim-by-claim basis whether or not to accept assignment. If a nonparticipating physician does not accept assignment, then Medicare pays the beneficiary directly and the nonparticipating physician may bill the beneficiary up to the limiting charge amount.

A physician can also stay in compliance with Medicare law by opting out of Medicare (see section 1802(b) of the Social Security Act (the Act)). When a physician or practitioner opts out of Medicare, the mandatory claim submission, assignment, and limiting charge rules do not apply. That is, physicians and nonphysician practitioners who opt out are excused from those rules but only when they maintain compliance with all of the requirements for opting out.

With the exception of those who have complied with our opt-out procedures, when a physician or supplier furnishes a service that is covered by Medicare, the physician or supplier is subject to the mandatory claim submission provisions of section 1848(g)(4) of the Act. Therefore, if a physician or supplier charges or attempts to charge a beneficiary any remuneration for a service that is covered by Medicare, then the physician or supplier must submit a claim to Medicare. Physicians who violate the mandatory claim submission rules may receive a fine of up to $2,000 (see section 1848(g)(4)(B) of the Act). Additionally, pursuant to CMS IOM Publication 100-02, Medicare Policy Benefit Manual, Chapter 15, Section 40  (1 MB) physicians “…are not allowed to charge beneficiaries in excess of the limits on charges that apply to the item or service being furnished”. This requirement applies regardless if a claim is or is not submitted to Medicare for the covered service. Physicians who violate Medicare’s limiting charge are subject to being excluded from the Medicare Program for up to five years or subject to a civil monetary penalty of not more than $10,000 (see section 1848(g)(1)(B) of the Act).

Therefore, physicians who are not enrolled in Medicare and ask beneficiaries to submit claims on their own using the form CMS-1490S, those physicians are in violation of Medicare law and unenrolled physicians who engage in this type of practice are subject to the penalties referenced above. As mentioned above, if a physician not enrolled in Medicare wishes to avoid being subject to the mandatory claim submission and limiting charge rules, then that physician should opt out of Medicare. Physicians and nonphysician practitioners who opt out are excused from those rules but only when they maintain compliance with all of the requirements for opting out.

Reviewed 7/27/2024