Medicare Part B 101 Manual

Medicare Part B 101 Manual

Provider Enrollment

Table of Contents

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National Provider Identifier Required

CMS requires that providers and suppliers obtain their NPI prior to enrolling with Medicare. A MAC will not process an enrollment application without the NPI. Providers that do not have an NPI can apply online via NPPES. For password resets and questions related to the NPI application, please call the NPI Enumerator toll free at 800-465-3203/TTY 800-692-2326.

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Tips for Successfully Enrolling with the Medicare Part B Contractor When Mailing Paper Applications

Tip 1: Submit the correct application for your provider or supplier type to the MAC servicing your state or location.

The Medicare contractor that serves the provider’s state or practice location is responsible for processing the Medicare enrollment application. Applicants must submit their application(s) to the appropriate MAC. Information can be located on the CMS website about Medicare Provider-Supplier Enrollment. A list of the MACs by state can be found on the CMS website.

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Tip 2: Submit the most recent version of the Medicare Enrollment Application (CMS-855).

Providers and suppliers must submit the appropriate version of the CMS-855. The application version can be found in the lower left corner of the application. If an applicant submits an older version of the CMS-855, the MAC will return your application without further review. An electronic copy of each of the current CMS-855 Medicare Enrollment Application is available on the CMS website.

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Tip 3: Submit a complete application.

When completing a CMS-855, each applicable section of an application must be typed. Application must be signed and dated. Signatures must be original and in ink (blue preferred). Stamped signatures will not be accepted. Signature by electronic signature (example: DocuSign and Adobesign) is permissible.

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Tip 4: Submit the Electronic Funds Transfer (EFT) Authorization Agreement with your enrollment application (if applicable).

CMS requires that providers and suppliers, who are enrolling in the Medicare Program or making a change in their enrollment data, receive payments via electronic funds transfer. Complete each section of the CMS-588.The CMS-588 must be signed by the authorized official or delegated official indicated for the enrollment record from the CMS-855. You must also include a voided check or bank confirmation letter to show that the legal business name on the EFT form and the bank account match.

Note: If a provider or supplier already receives payments electronically and is not making a change to his/her banking information, the CMS-588 is not required. However, a new EFT agreement may be required for revalidation purposes.

Note: Suppliers reassigning all their benefits to an individual/entity are not required to complete an EFT agreement since payments are issued to the individual/entity billing the service.

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Tip 5: Submit all supporting documentation.

In addition to a complete application, each provider or supplier is required to submit all applicable supporting documentation at the time of filing. Supporting documentation includes professional and/or business licenses, (diploma, transcript, national board certification [if applicable]) proof of application fee payment (if applicable), and, if necessary, an EFT Authorization Agreement (CMS-588) and IRS documents such as the CP-575 or -147c. See Section 12 of the CMS-855 for additional information regarding the applicable documentation requirements.

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Tip 6: Sign and date the application.

Paper applications must be signed and dated by the appropriate individual(s). Signatures must be original and in ink (blue preferable). Stamped signatures will not be accepted. Signature by electronic signature (example: DocuSign and Adobesign) is permissible.

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Tip 7: Respond to MAC requests promptly and fully.

To facilitate your enrollment into the Medicare Program, respond promptly and fully to any request for additional or clarifying information from your Medicare contractor. Failure to respond within 30 days may result in the denial of your application or deactivation of your Medicare billing privileges.

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National Government Services Provider Enrollment Assistance

For assistance with instructions on completing the CMS-855 forms, please contact the NGS Provider Enrollment Center.

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Toll-Free Provider Enrollment Numbers

JK (CT, MA, ME, NH, NY, RI, and VT): 888-379-3807

J6 (IL, MN, WI): 877-908-8476

Hours Available

Monday-Friday: 8:00 a.m.-4:00 p.m. CT and ET
Closed for training on the 2nd and 4th Friday of the month:

  • 12:00–4:00 p.m. ET
  • 11:00 a.m.–3:00 p.m. CT

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Status of Applications

Providers can check on the status of their CMS-855 enrollment application using the IVR or self-service, check the Check Provider Enrollment Application Status Tool found on our website. You may also check application status in the Provider Enrollment Chain and Ownership System (PECOS).

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Change of Address or Other Information

Any time a current provider/supplier is adding, deleting or changing information under the same tax identification number, the change must be reported using the appropriate CMS-855. Groups and incorporated entities use the CMS-855B. Individuals using their Social Security Number or an unincorporated tax identification number use the CMS-855I. Sole Owners that are incorporated that need to change individual and entity enrollment information use the CMS-855I.

If submitting the change by mailing a paper application, the provider or supplier should complete Section 1A to identify action being taken and 1B what section change is updated on the CMS-855 with completing all required sections as indicated. Section 15 must be completed, signed and dated by the appropriate person(s). The entire CMS-855 does not need to be completed. Sections of the application that do not affect the change may be discarded. An exception to this rule is if the change is the tax identification number. An entire application must be completed for the new entity.

If submitting the change via PECOS system, make sure you have access to the enrollment(s) that require an update. In PECOS the enrollment box will show “more options” to select, then answer the questionnaire “Performing a change of information to the current enrollment” as well as other questions prior to selecting ”Start Application”. On the Topic tab, select the topics to be updated and either edit, delete or add information for the topic. Remember, if a practice location has moved, delete the old location with an end date and add information for the new practice location with a start date. If the tax identification number changed, select create an initial enrollment to complete an entire new enrollment to submit.

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Revalidation

Section 6401(a) of the Affordable Care Act requires that all enrolled providers or suppliers revalidate their Medicare enrollment information under new enrollment screening criteria.

To maintain Medicare billing privileges, a provider or supplier must resubmit and recertify the accuracy of its enrollment information every five years for Part A, HH+H, FQHC and Part B enrollments.

CMS has completed its initial round of revalidations and resuming regular revalidation cycles in accordance with 42 CFR Section 424.515, Federal Register 2/2/2011 (CMS-6028-FC).

General CMS-Medicare revalidation information is available on the CMS website.

  • Failure to respond timely to revalidation notification by the due date will result in claim rejections and the enrollment status will be “Stay of Enrollment” until the application is received for processing.
  • Upon receipt of application, failure to respond timely to additional requests for information will result in deactivation of Medicare billing privileges for the enrollment after due date is past. 
  • The revalidation requirement does not apply to physicians and nonphysician practitioners who have opted out of Medicare.
  • The revalidation requirement does not apply to physicians and nonphysician practitioners who enroll solely to order and refer (CMS-855O).
  • CMS has established due dates by which you must revalidate. Generally, this due date will remain with you throughout subsequent revalidation cycles.
  • Unsolicited applications will be returned if received more than seven months prior to the provider or suppliers revalidation due date. Please verify the revalidation due date by using the Medicare Revalidation List on the CMS website.

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Withholding of Payments and Returned Mail

Medicare contractors are required to withhold all payments to an entity if the postal service returns mail as undeliverable. To avoid this, all address changes should be reported as soon as the provider knows the new address.

  • If the correspondence address has changed, refer to Section 2 of the application. The correspondence address must be where the provider or supplier can be reached directly and cannot be that of a billing agency.
  • Section 4 of the application contains the practice location(s) and the pay to address.

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Internet-Based Provider Enrollment, Chain and Ownership System (PECOS)

CMS has established an Internet-based Medicare provider enrollment process, known as PECOS. This enrollment process will allow physicians, nonphysician practitioners and entities the option of enrolling, making a change in their Medicare enrollment information, voluntarily withdrawing from the Medicare Program or tracking the status of their Medicare enrollment applications through the web submission process. Using PECOS is the preferred method for submitting enrollment application information and offers many benefits that include:

  • Eliminating the need for paper and offers a digital document uploading feature as well as an electronic signature feature
  • Submitting applications using PECOS is faster than completing a paper application
  • Providing a tailored application process that prompts you to enter all required information pertinent to your scenario

The following are basic steps to completing an enrollment action using Internet-based PECOS.

  1. To be a registered user and logon to PECOS, you must have an active web user account (user ID and password) established. For registration instructions to be authorized in connection with an account, refer to the Quick Reference Guide at the bottom of the page at Identity & Access Management System.
     
  2. A National Provider Identifier is needed to submit an application.
  • If you are a health care provider or entity and do not have an NPI apply for one at NPPES
  • If you need to update your NPI account information, please visit NPPES
  • If you are having issues with your user ID and/or password and are unable to login, please contact the EUS Help Desk toll free at 866-484-8049 or via email at EUSSupport@cgi.com.
  1. Go to PECOS and complete, review, upload (PDF or TIFF) supporting documents, and sign the certification statement by using the e-signature feature or upload (PDF or TIFF) certification and submit application electronically.

Important:

  • If you do not use the e-signature option and select upload option, then print, sign and date the certification statement
    • upload (PDF or TIFF) before selecting “complete submission” or
    • in the “manage signature” section under “Action” of the appropriate enrollment application after selecting “complete submission.”
  • Any other supporting documents that you were not able to upload in PECOS may be mailed to the MAC.
  • The certification statement must be signed by the individual physician or nonphysician practitioner or the group’s authorized and/or delegated official enrolling or making changes to enrollment information. Paper certification statement signatures must be original and in ink (blue ink recommended). Stamped signatures will not be accepted. Signature by electronic signature (example: DocuSign and Adobesign) is permissible.

CMS encourages all provider and suppliers to print and retain a copy of the enrollment application for their records.

Additional information on Internet-based PECOS can be found on the CMS website.

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Provider Enrollment Terminology

Below is a list of terms commonly used in the Medicare enrollment process.

Term Definition
Applicant The individual (practitioner/supplier) or organization who is seeking enrollment into the Medicare Program.
Approve/approval The enrolling provider or supplier has been determined to be eligible under Medicare rules and regulations to receive a Medicare billing number and be granted Medicare billing privileges.
Authorized official An appointed official (e.g., chief executive officer, chief financial officer, general partner, chairman of the board or direct owner) to whom the organization has granted the legal authority to enroll it in the Medicare Program, to make changes or updates to the organization’s status in the Medicare Program, and to commit the organization to fully abide by the statutes, regulations and program instructions of the Medicare Program.
Billing agency A company that the applicant contracts with to prepare, edit, and/or submit claims on its behalf.
Change of Ownership (CHOW) Defined in 42 CFR 489.18 (a) and generally means, in the case of a partnership, the removal, addition or substitution of a partner, unless the partners expressly agree otherwise, as permitted by applicable state law. In the case of a corporation, the term generally means the merger of the provider corporation into another corporation, or the consolidation of two or more corporations, resulting in the creation of a new corporation. The transfer of corporate stock or the merger of another corporation into the provider corporation does not constitute change of ownership.
Deactivate The provider or supplier’s billing privileges were stopped but may be restored upon the submission of updated information.
Delegated official An individual who is delegated by the authorized official, the authority to report changes and updates to the enrollment record. The delegated official must be an individual with an ownership or control interest in (as that term is defined in Section 1124[a][3] of the Social Security Act), or be a W-2 managing employee of, the provider or supplier.
Deny/denial The enrolling provider or supplier has been determined to be ineligible to receive Medicare billing privileges for Medicare covered items or services provided to Medicare beneficiaries.
Enroll/enrollment The process that Medicare uses to establish eligibility to submit claims for Medicare covered services and supplies. The process includes:
  • Identification of a provider or supplier.
  • Validation of the provider or supplier’s eligibility to provide items or services to Medicare beneficiaries.
  • Identification and confirmation of the provider or supplier’s practice locations and owners.
  • Granting the provider or supplier Medicare billing privileges.
Enrollment application A CMS-approved paper enrollment application or an electronic Medicare enrollment process approved by the OMB.
Group member Physician or nonphysician practitioner that is reassigning benefits to an organization or individual provider for services rendered to a beneficiary.

Nonphysician practitioner that has employee arrangements to an organization or individual provider for services rendered to a beneficiary.
Internet-based PECOS A CMS-established Internet-based Medicare provider enrollment process.
Institutional provider Hospital, critical care facility, skilled nursing facility, home health agency or hospice or another similar institution providing services to Medicare beneficiaries.

Provider or supplier that submits a paper or PECOS Medicare enrollment application using the CMS-855A, CMS-20134, CMS-855S or CMS-855B (except physician and nonphysician practitioner organizations).
Legal business name The name that is reported to the Internal Revenue Service.
Managing employee A general manager, business manager, administrator, director or other individual that exercises operational or managerial control over, or who directly or indirectly conducts, the day-to-day operation of the provider or supplier, either under contract or through some other arrangement, whether or not the individual is a W-2 employee of the provider or supplier.
Medicare Administrative Contractor (MAC) Private health care insurer that has been awarded a geographic jurisdiction to process Medicare Part A and Part B (A/B) medical claims or durable medical equipment (DME) claims for Medicare fee-for-service (FFS) beneficiaries.

CMS relies on to serve as the primary operational contact between the Medicare FFS Program and the health care providers enrolled in the program.
Medicare identification number The generic term for Provider Transaction Access Number (PTAN) which is a critical number directly linking the provider or supplier’s NPI for billing clarification
National Provider Identifier The standard unique health identifier for health care providers (including Medicare suppliers) and is assigned by the NPPES registry.
Operational The provider or supplier has a qualified physical practice location, is open to the public for the purpose of providing health care related services, is prepared to submit valid Medicare claims; and is properly staffed, equipped and stocked (as applicable, based on the type of facility or organization, provider or supplier specialty, or the services or items being rendered) to furnish these items or services.
Owner Any individual or entity that has any partnership interest in, or that has five percent or more direct or indirect ownership of, the provider or supplier as defined in sections 1124 and 1124(A) of the Social Security Act.
Provider Defined at 42 CFR 400.202 and generally means a hospital, critical access hospital, skilled nursing facility, comprehensive outpatient rehabilitation facility, home health agency, or hospice, that has in effect an agreement to participate in Medicare; or a clinic, rehabilitation agency, or public health agency that has in effect a similar agreement but only to furnish outpatient physical therapy or speech pathology services; or community mental health center that has in effect a similar agreement but only to furnish partial hospitalization services.
Reassignment An individual physician, nonphysician practitioner, or other supplier has granted a Medicare-enrolled provider or supplier the right to receive payment for the physician, nonphysician practitioner or other supplier services.
Reject/rejected The provider or supplier’s enrollment application was not processed due to incomplete information or that additional information or corrected information was not received from the provider or supplier in a timely manner.
Sole Owner Provider is only owner of a business set up as a corporation (PA, PLLC, PC, LLC, Inc.) rendering services to beneficiaries.
Sole proprietor Physician or nonphysician practitioner that bills rendered services for beneficiaries under Social Security or Employer Identification Number that is in their own name and not a corporation.
Stay of enrollment 424.541 CMS may stay an enrolled provider's or supplier's enrollment if the provider or supplier:(i) Is non-compliant with at least one enrollment requirement in Title 42; and. (ii) Can remedy the non-compliance via the submission of, as applicable to the situation, a Form CMS-855, Form CMS-20134, or Form CMS-588 change of information or revalidation application.

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Private Contracting and Opt Out

The Balanced Budget Act of 1997 permits a physician or practitioner to enter private contracts with Medicare beneficiaries to provide covered services if specific requirements are met.

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Definition of a Private Contract

A “private contract” is a contract between a Medicare beneficiary and a physician or other practitioner who has opted out of Medicare for all covered items and services he/she furnishes to Medicare beneficiaries. In a private contract, the Medicare beneficiary agrees to give up Medicare payment for services furnished by the physician/practitioner and to pay the physician/practitioner without regard to any limits that would otherwise apply to what the physician/practitioner could charge. Once a physician/practitioner files an affidavit notifying the Medicare carrier that he/she has opted out of Medicare, he/she is out of Medicare for two years. (unless the opt out is terminated early [according to CMS guidelines] or the physician/practitioner fails to maintain opt out). The two years effective date is from the date the affidavit is signed or if provider had an established individual enrollment identifying “Participation Agreement” status “yes”, will be the 1st day of the next calendar quarter. After two years, a physician/practitioner can elect to return to Medicare (notifying the Medicare Contractor no less than 30 days prior to the renewal date with written affidavit for the change and submitting an initial enrollment application) ,or if submitted opt out affidavit was signed on or after 6/16/2015, it will automatically renew every two years. Please note that a beneficiary who signs a private contract with a physician/practitioner is not precluded from receiving services from other physicians and practitioners who have not opted out of Medicare.

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Definition of Physician/Practitioner

For purposes of this provision, the term “physician” is limited to doctors of medicine; doctors of osteopathy; doctors of dental surgery or of dental medicine; doctors of podiatric medicine; and doctors of optometry who are legally authorized to practice dentistry, podiatry, optometry, medicine, or surgery by the state in which such function or action is performed; no other physicians may opt out. Also, for purposes of this provision, the term “practitioner” means any of the following to the extent that they are legally authorized to practice by the state and otherwise meet Medicare requirements:

  • Physician assistant
  • Nurse practitioner
  • Clinical nurse specialist
  • Certified registered nurse anesthetist
  • Certified nurse midwife
  • Clinical psychologist
  • Clinical social worker
  • Registered dietitians or
  • Nutritional professionals
  • Mental health counselors
  • Marriage and family therapists

The opt out law does not define “physician” to include chiropractors; therefore, they may not opt out of Medicare and provide services under private contract. Physical therapists in independent practice and occupational therapists in independent practice cannot opt out because they are not within the opt out law’s definition of either a “physician” or “practitioner.”

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Requirements of a Private Contract

A private contract under this section must:

  • Be in writing and in print sufficiently large to ensure that the beneficiary is able to read the contract
  • Clearly state whether the physician/practitioner is excluded from Medicare
  • State that the beneficiary or his/her legal representative accepts full responsibility for payment of the physician’s or practitioner’s charge for all services furnished by the physician/practitioner
  • State that the beneficiary or the beneficiary’s legal representative understands that Medicare limits do not apply to what the physician/practitioner may charge for items or services furnished by the physician/practitioner
  • State that the beneficiary or his/her legal representative agrees not to submit a claim to Medicare or to ask the physician/practitioner to submit a claim to Medicare
  • State that the beneficiary or his/her legal representative understands that Medicare payment will not be made for any items or services furnished by the physician/practitioner that would have otherwise been covered by Medicare if there were no private contract and a proper Medicare claim had been submitted
  • State that the beneficiary or his/her legal representative enters into the contract with the knowledge that he/she has the right to obtain Medicare-covered items and services from physicians and practitioners who have not opted out of Medicare, and that the beneficiary is not compelled to enter into private contracts that apply to other Medicare-covered services furnished by other physicians or practitioners who have not opted out
  • State the expected or known effective date and expected or known expiration date of the current two year opt out period
  • State that the beneficiary or his/her legal representative understands that Medigap plans do not, and that other supplemental plans may elect not to, make payments for items and services not paid for by Medicare
  • Be signed by the beneficiary or his/her legal representative and by the physician/practitioner
  • Not be entered into by the beneficiary or by the beneficiary’s legal representative during a time when the beneficiary requires emergency care services or urgent care services
  • Be provided (a photocopy is permissible) to the beneficiary or to his/her legal representative before items or services are furnished to the beneficiary under the terms of the contract
  • Be retained (original signatures of both parties required) by the physician/practitioner for the duration of the current two year opt out period
  • Be made available to CMS upon request
  • Be entered into for each two year opt out period

In order for a private contract with a beneficiary to be effective, the physician/practitioner must file an affidavit with all Medicare carriers to which he/she would submit claims, advising that he/she has opted out of Medicare. The affidavit must be filed within ten days of entering into the first private contract with a Medicare beneficiary. Once the physician/practitioner has opted out, such physician/practitioner must enter into a private contract with each Medicare beneficiary to whom he/she furnishes covered services (even where Medicare payment would be on a capitated basis or where Medicare would pay an organization for the physician’s or practitioner’s services to the Medicare beneficiary), with the exception of a Medicare beneficiary needing emergency or urgent care.

If a physician/practitioner has opted out of Medicare, he/she must use a private contract for items and services that are, or may be, covered by Medicare (except for emergency or urgent care services).

An opt out physician/practitioner is not required to use a private contract for an item or service that is definitely excluded from coverage by Medicare. A non-opt out physician/practitioner, or other supplier, is required to submit a claim for any item or service that is, or may be, covered by Medicare. When an item or service may be covered in some circumstances, but not in others, the physician/practitioner, or other supplier, may provide an Advance Beneficiary Notice (ABN) to the beneficiary, who informs the beneficiary that Medicare may not pay for the item or service, and that if Medicare does not do so, the beneficiary is liable for the full charge.

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General Rules of Private Contracts

The following rules apply to physicians/practitioners who opt out of Medicare:

  • A physician/practitioner may enter into one or more private contracts with Medicare beneficiaries for the purpose of furnishing items or services that would otherwise be covered by Medicare.
  • A physician/practitioner who enters into at least one private contract with a Medicare beneficiary and who submits one or more affidavits opts out of Medicare for a two-year period unless the opt out is terminated early or unless the physician/practitioner fails to maintain opt out.
  • Valid opt-out affidavits signed on or after 6/16/2015, will automatically renew every two years. If physicians and practitioners who file affidavits effective on or after 6/16/2015, do not want their opt out to automatically renew at the end of a two-year opt-out period, they may cancel the renewal by notifying all contractors with which they filed an affidavit in writing at least 30 days prior to the start of the next opt-out period. Valid opt-out affidavits signed before 6/16/2015, will expire two years after the effective date of the opt-out. If physicians and practitioners that filed affidavits effective before 6/16/2015, want to extend their opt-out, they must submit a renewal affidavit within 30 days after the current opt-out period expires to all contractors with which they would have filed claims absent the opt-out.
  • Private contracts and the physician’s or practitioner’s opt out are null and void if the physician/practitioner fails to properly opt out.
  • Private contracts and the physician’s or practitioner’s opt out are null and void for the remainder of the opt out period if the physician/practitioner fails to remain in compliance with the opting out conditions during the opt out period.
  • Services furnished under private contracts meeting the requirements of these instructions are not covered services under Medicare, and no Medicare payment will be made for such services either directly or indirectly.

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Requirements of the Opt-Out Affidavit

A valid affidavit must:

  • Be in writing and be signed by the physician/practitioner
  • Contain the physician’s or practitioner’s full name, address, telephone number, NPI, or billing number (if one has been assigned), or if an NPI has not been assigned, the physician’s or practitioner’s Tax Identification Number (TIN)
  • State that, except for emergency or urgent care services, during the opt out period the physician/practitioner will provide services to Medicare beneficiaries only through private contracts for services that would have been Medicare-covered services
  • State that the physician/practitioner will not submit a claim to Medicare for any service furnished to a Medicare beneficiary during the opt out period, nor will the physician/practitioner permit any entity acting on his/her behalf to submit a claim to Medicare for services furnished to a Medicare beneficiary
  • State that, during the opt out period, the physician/practitioner understands that he/she may receive no direct or indirect Medicare payment for services that he/she furnishes to Medicare beneficiaries with whom he/she has privately contracted, whether as an individual, an employee of an organization, a partner in a partnership, under a reassignment of benefits, or as payment for a service furnished to a Medicare beneficiary under a Medicare Advantage plan
  • State that a physician/practitioner who opts out of Medicare acknowledges that, during the opt out period, his/her services are not covered under Medicare and that no Medicare payment may be made to any entity for his/her services, directly or on a capitated basis
  • State on acknowledgment by the physician/practitioner to the effect that, during the opt out period, the physician/practitioner agrees to be bound by the terms of both the affidavit and the private contracts that he/she has entered into
  • Acknowledge that the physician/practitioner recognizes that the terms of the affidavit apply to all Medicare-covered items and services furnished to Medicare beneficiaries by the physician/practitioner during the opt-out period (except for emergency or urgent care services furnished to the beneficiaries with whom the physician/practitioner has not previously privately contracted) without regard to any payment arrangements the physician/practitioner may make
  • With respect to a physician/practitioner who has signed a Part B participation agreement, acknowledge that such agreement terminates on the effective date of the affidavit
  • Acknowledge that the physician/practitioner understands that a beneficiary who has not entered into a private contract and who requires emergency or urgent care services may not be asked to enter into a private contract with respect to receiving such services and that rules of Section 40.28 apply if the physician/practitioner furnishes such services
  • Identify the physician/practitioner sufficiently so that the carrier can ensure that no payment is made to the physician/practitioner during the opt out period
  • Be filed with all carriers who have jurisdiction over claims the physician/practitioner would otherwise file with Medicare and the initial two year opt-out period will begin the date the affidavit meets the requirements of 42 C.F.R., Section 405.420 is signed, provided the affidavit is filed within 10 days after the physician/practitioner signs his or her first private contract with a Medicare beneficiary

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When a Physician or Practitioner Opts Out Of Medicare

When a physician/practitioner opts of out of Medicare no services provided by that individual are covered by Medicare and no Medicare payment can be made to that physician or practitioner directly or on a capitated basis. Additionally, no Medicare payment may be made to a beneficiary for items or services provided directly by a physician or practitioner who has opted out of the program.

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Exception

In an emergency or urgent care situation, a physician/practitioner who opts out may treat a Medicare beneficiary with whom he/she does not have a private contract and bill for such treatment. In such a situation, the physician/practitioner may not charge the beneficiary more than what a nonparticipating physician/practitioner would be permitted to charge and must submit a claim to Medicare on the beneficiary’s behalf. Payment will be made for Medicare-covered items or services furnished in emergency or urgent situations when the beneficiary has not signed a private contract with that physician/practitioner.

The physician/practitioner cannot choose to opt out of Medicare for some Medicare beneficiaries but not others, or for some services but not others. The physician/practitioner who chooses to opt out of Medicare may provide covered care to Medicare beneficiaries only through private contracts.

Medicare will make payment for covered, medically necessary services that are ordered or certified by a physician/practitioner who has opted out of Medicare if the ordering or certifying physician/practitioner has acquired a National Provider Identifier (NPI), reports his/her Social Security Number, has a valid opt out affidavit on file with his or her Medicare Administrative Contractor (MAC), is of a specialty that is eligible to order and certify, and provided that the services are not furnished by another physician/practitioner who has also opted out. For example, if an opt out physician/practitioner admits a beneficiary to a hospital, Medicare will reimburse the hospital for medically necessary care.

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Failure to Properly Opt Out

A physician/practitioner fails to properly opt out for any of the following reasons:

  • Any private contract between the physician/practitioner and a Medicare beneficiary was entered into before the affidavit was filed does not meet the specifications; or
  • The physician/practitioner fails to submit the affidavit(s) properly

If a physician/practitioner fails to properly opt out, the following will result:

  • The physician’s or practitioner’s attempt to opt out of Medicare is nullified, and all of the private contracts between the physician/practitioner and Medicare beneficiaries for the two-year period covered by the attempted opt out are deemed null and void.
  • The physician/practitioner must submit claims to Medicare for all Medicare-covered items and services furnished to Medicare beneficiaries, including the items and services furnished under the nullified contracts. A nonparticipating physician/practitioner is subject to the limiting charge provision. For items or services paid under the physician fee schedule, the limiting charge is 115 percent of the approved amount for nonparticipating physicians or practitioners.
  • A participating physician/practitioner is subject to the limitations on charges of the participation agreement he/she signed.
  • The practitioner may not reassign any claim.
  • The practitioner may neither bill nor collect an amount from the beneficiary except for applicable deductible and coinsurance amounts.
  • The physician/practitioner may make another attempt to properly opt out at any time.

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Failure to Maintain Opt Out

A physician/practitioner fails to maintain opt out under this section if during the opt-out period one of the following occurs:

  • The physician/practitioner has filed an affidavit and has signed private contracts but, physician/practitioner knowingly and willfully submits a claim for Medicare payment or receives Medicare payment directly or indirectly for Medicare-covered services furnished to a Medicare beneficiary or
  • The physician/practitioner fails to enter into private contracts with Medicare beneficiaries for the purpose of furnishing items and services that would otherwise be covered by Medicare, or enters into private contracts that fail to meet the specifications or
  • The physician/practitioner fails to comply with billing for emergency care services or urgent care services or
  • The physician/practitioner fails to retain a copy of each private contract that the physician/practitioner has entered into for the duration of the current two year opt out period for which the contracts are applicable or fails to permit CMS to inspect them upon request.

If a physician/practitioner fails to maintain opt-out in accordance with the above , and fails to demonstrate within 45 days of a notice from the Medicare contractor that the physician/practitioner has taken good faith efforts to maintain opt-out (including by refunding amounts in excess of the charge limits to the beneficiaries with whom the physician/practitioner did not sign a private contract), the following will result effective 46 days after the date of the notice for the remainder of the opt-out period:

  • All of the private contracts between the physician/practitioner and Medicare beneficiaries are deemed null and void.
  • The physician’s or practitioner’s opt out of Medicare is nullified.
  • The physician or practitioner must submit claims to Medicare for all Medicare-covered items and services furnished to Medicare beneficiaries.
  • The physician or practitioner or beneficiary will not receive Medicare payment on Medicare claims for the remainder of the opt-out period, except as stated above.
  • The physician or practitioner is subject to the limiting charge provisions.
  • The practitioner may not reassign any claim.
  • The practitioner may neither bill nor collect any amount from the beneficiary except for applicable deductible and coinsurance amounts.
  • The physician or practitioner may not attempt to once more meet the criteria for properly opting out until the two-year opt out period expires.

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Nonparticipating Physicians or Practitioners who Opt Out of Medicare

A nonparticipating physician or practitioner may opt out of Medicare at any time in accordance with the following:

  • The two-year opt out period begins the date the affidavit meeting the requirements is signed, provided the affidavit is filed within ten days after he/she signs his/her first private contract with a Medicare beneficiary.
  • If the physician or practitioner does not file any required affidavit on time, the two-year opt out period begins when the last such affidavit is filed. Any private contract entered into before the last required affidavit is filed becomes effective upon the filing of the last required affidavit and the furnishing of any items or services to a Medicare beneficiary under such contract before the last required affidavit is filed is subject to standard Medicare rules.

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Participating Physicians or Practitioners who Opt Out of Medicare

Participating physicians and practitioners may opt out if they file an affidavit that meets the criteria and which is received by the Medicare contractor at least 30 days before the first day of the next calendar quarter showing an effective date of the first day in that quarter (i.e., January 1, April 1, July 1, October 1). They may not provide services under private contracts with beneficiaries earlier than the effective date of the affidavit.

The 30-day notice is required to allow sufficient time for the Medicare contractor to accomplish the appropriate system file updates before the effective date. The Medicare contractor must make participating physician status changes no less frequently than at the beginning of each calendar quarter. Therefore, participating physicians or practitioners must provide the Medicare contractor with 30 days notice that they intend to opt out at the beginning of the next calendar quarter.

Participating physicians or practitioners may sign private contracts only after the effective date of affidavits filed. They may not provide services under private contracts with beneficiaries earlier than the effective date of the affidavit. It is necessary to treat nonparticipating physicians or practitioners differently from participating physicians or practitioners in order to assure that participating physicians or practitioners are paid properly for the services they furnish before the effective date of the affidavit.

Participating physicians or practitioners are paid at the full fee schedule for the services they furnish to Medicare beneficiaries. However, the law sets the payment amount for nonparticipating physicians or practitioners at 95 percent of the payment amount for participating physicians or practitioners.

Participating physicians or practitioners who opt out are treated as nonparticipating physicians or practitioners as of the effective date of the opt-out affidavit. When a participating physician/practitioner opts out of Medicare, the Medicare contractor must pay the physician/practitioner at the higher participating physician/practitioner rate for services rendered in the period before the effective date of the opt-out; and at the nonparticipating rate for services rendered on and after the opt-out date.

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Noncovered Services

Because Medicare’s rules do not apply to items or services that are categorically not covered by Medicare, a private contract is not needed to furnish such items or services to Medicare beneficiaries, and Medicare’s claims filing rules and limits on charges do not apply to such items or services. For example, because Medicare does not cover hearing aids, a physician or practitioner, or other supplier, may furnish a hearing aid to a Medicare beneficiary and would not be required to file a claim with Medicare; further, the physician, practitioner, or other supplier would not be subject to any Medicare limit on the amount he/she could collect for the hearing aid.

If the item or service is one that is not categorically excluded from coverage by Medicare, but may be noncovered in a given case (for example, it is covered only where certain clinical criteria are met and there is a question as to whether the criteria are met), a non-opt out physician/practitioner, or other supplier is not relieved of their obligation to file a claim with Medicare. If the physician/practitioner or other supplier has given a proper Advance Beneficiary Notice of Noncoverage (ABN), the physician/practitioner may collect from the beneficiary the full charge if Medicare does deny the claim.

Where a physician or practitioner has opted out of Medicare, he or she must provide covered services only through private contracts (including items and services that are not categorically excluded from coverage but may be excluded in a given case). An opt-out physician or practitioner is prohibited from submitting claims to Medicare (except for emergency or urgent care services furnished to a beneficiary with whom the physician or practitioner did not have a private contract).

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Organizations that Furnish Physician or Practitioner Services

The opt out applies to all items or services the physician or practitioner furnishes to Medicare beneficiaries, regardless of the location where such items or services are furnished.

When a physician/practitioner opts out and is a member of a group practice or otherwise reassigns his/her rights to Medicare payment to an organization, the organization may no longer bill Medicare or be paid by Medicare for services that the physician or practitioner furnishes to Medicare beneficiaries. However, if the physician or practitioner continues to grant the organization the right to bill and be paid for the services he or she furnishes to patients, the organization may bill and be paid by the beneficiary for the services that are provided under the private contract. The decision of a physician/practitioner to opt out of Medicare does not affect the ability of the group practice or organization to bill Medicare for the services of physicians and practitioners who have not opted out of Medicare.

Corporations, partnerships, or other organizations that bill and are paid by Medicare for the services of physicians or practitioners who are employees, partners, or have other arrangements that meet the Medicare reassignment-of-payment rules cannot opt out because they are neither physicians nor practitioners. Of course, if every physician and practitioner within a corporation, partnership, or other organization opts out, then such corporation, partnership, or other organization would have in effect, opted out.

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Private Contracting Rules when Medicare is the Secondary Payer

The opt out physician/practitioner must have a private contract with a Medicare beneficiary for all Medicare-covered services, not withstanding that Medicare would be the secondary payer in a given situation. No Medicare primary or secondary payments will be made for items and services furnished by a physician/practitioner under the private contract.

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Emergency and Urgent Care Situations

Payment may be made for services furnished by an opt out physician/practitioner who has not signed a private contract with a Medicare beneficiary for emergency or urgent care items and services furnished to, or ordered or prescribed for, such beneficiary on or after the date the physician opted out.

Where a physician or a practitioner who has opted out of Medicare treats a beneficiary with whom he does not have a private contract in an emergency or urgent situation, the physician/practitioner may not charge the beneficiary more than the Medicare limiting charge for the service and must submit the claim to Medicare on behalf of the beneficiary for the emergency or urgent care. Medicare payment may be made to the beneficiary for the Medicare-covered services furnished to the beneficiary. Therefore, the physician/practitioner must submit a completed Medicare claim on behalf of the beneficiary with the appropriate HCPCS code and HCPCS modifier which indicates the services furnished to the Medicare beneficiary were emergency or urgent and the beneficiary does not have a private agreement with him/her.

Please use the following modifier when billing for emergency and urgent care situations:

GJ = Opt out physician/practitioner

This modifier must be used on claims for services rendered by an opt out physician/practitioner for an emergency/urgent service. The use of this modifier indicates that the service was furnished by an opt out physician/practitioner who has not signed a private contract with a Medicare beneficiary for emergency or urgent care items and services furnished to, or ordered or prescribed for, such beneficiary on or after the date the physician/practitioner opted out.

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Renewal of Opt Out

Prior to enactment of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), physician/practitioner opt out affidavits were only effective for two years. As a result of changes made by MACRA, valid opt out affidavits signed on or after 6/16/2015 will automatically renew every two years. If physicians and practitioners that file affidavits effective on or after 6/16/2015 do not want their opt out to automatically renew at the end of a two year opt out period, they may cancel the renewal by notifying all Medicare Administrative Contractors with which they filed an affidavit in writing at least 30 days prior to the start of the next opt-out period.

Valid opt out affidavits signed before 6/16/2015 will expire two years after the effective date of the opt out. If physicians and practitioners that filed affidavits effective before 6/16/2015 want to extend their opt out, they must submit a renewal affidavit within 30 days after the current opt out period expires to all MACs with which they would have filed claims absent the opt out.

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Early Termination of Opt Out

If a physician/practitioner changes his/her mind once the affidavit has been approved by the carrier, the opt out may be terminated within 90 days of the effective date of the affidavit. To properly terminate an opt out a physician or practitioner must:

  • Not have previously opted out of Medicare; and
  • Notify all Medicare carriers, with which he/she filed an affidavit, of the termination of the opt out no later than 90 days after the effective date of the initial two-year period.
  • Refund to each beneficiary with whom he or she has privately contracted all payment collected in excess of:
    • The Medicare limiting charge (in the case of physicians/practitioners); or
    • The deductible and coinsurance (in the case of practitioners).
  • Notify all beneficiaries with whom the physician or practitioner entered into private contracts of the physician’s or practitioner’s decision to terminate opt out and of the beneficiaries’ right to have claims filed on their behalf with Medicare for services furnished during the period between the effective date of the opt out and the effective date of the termination of the opt out period.

When the physician or practitioner properly terminates opt-out in accordance with the second bullet above, the physician or practitioner (who was previously enrolled in Medicare) will be reinstated in Medicare as if there had been no opt-out, and the provision must not apply unless the physician or practitioner subsequently properly opts out.

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Effect of Beneficiary Agreement Not to Use Medicare Coverage

Normally physicians and practitioners are required to submit claims on behalf of beneficiaries for all items and services they provide for which Medicare payment may be made under Part B. Also, they are not allowed to charge beneficiaries in excess of the limits on charges that apply to the item or service being furnished.

However, a physician or practitioner may opt out of Medicare. A physician or practitioner who opts out is not required to submit claims on behalf of beneficiaries and also is excluded from limits on charges for Medicare-covered services.

  • The only situation in which non-opt-out physicians or practitioners, or other suppliers, are not required to submit claims to Medicare for covered services is where a beneficiary or the beneficiary’s legal representative refuses, of his/her own free will, to authorize the submission of a bill to Medicare. However, the limits on what the physician, practitioner, or other supplier may collect from the beneficiary continue to apply to charges for the covered service, notwithstanding the absence of a claim to Medicare.
  • In some circumstances, a non-opt-out physician/practitioner, or other supplier, is required to provide an ABN to the beneficiary prior to rendering an item or service that is usually covered by Medicare but may not be covered in this particular case. The ABN notifies the beneficiary that Medicare will likely deny the claim and prompts the beneficiary to choose whether or not he/she will accept liability for the full cost of the services if Medicare does not pay. The beneficiary also indicates on the ABN whether or not a claim should be submitted to Medicare. Providers and suppliers must follow the beneficiary’s directive for claim submission as indicated on the ABN. Providers and suppliers will not violate the mandatory claim submission rules when a claim is not submitted per a beneficiary’s written request on an ABN. Where a valid ABN is given and a claim is submitted, subsequent denial of the claim relieves the non-opt-out physician/practitioner, or other supplier, of the limitations on charges that would apply if the services were covered.

Opt-out physicians and practitioners must not use ABNs, because they use private contracts for any item or service that is, or may be, covered by Medicare (except for emergency or urgent care services).

Where a physician/practitioner, or other supplier, fails to submit a claim to Medicare on behalf of a beneficiary for a covered Part B service within one year of providing the service, or knowingly and willfully charges a beneficiary more than the applicable charge limits on a repeated basis, he/she/it may be subject to civil monetary penalties. Congress enacted these requirements for the protection of all Part B beneficiaries. Application of these requirements cannot be negotiated between a physician/practitioner or other supplier and the beneficiary except where a physician/practitioner is eligible to opt out of Medicare and the requirements are met. Agreements with Medicare beneficiaries that are not authorized as described in these manual sections and that propose to waive the claims filing or charge limitations requirements, or other Medicare requirements, have no legal force and effect. For example, an agreement between a physician/practitioner, or other supplier and a beneficiary to exclude services from Medicare coverage, or to excuse mandatory assignment requirements applicable to certain practitioners, is ineffective.

The contractor will refer such cases to the OIG.

This subsection does not apply to noncovered charges.

Revised 10/16/2024