For new Direct Care providers, deciding whether or not to opt out of Medicare can be one of the most challenging decisions they can make. In this article we detail why a practitioner might choose to opt out of Medicare. 

Challenges of the Concierge Model 

All physicians are defaulted into the Medicare participatory category, but this can be a difficult place to be for a DPC provider. Under Medicare, Direct Care providers usually opt for a “concierge model,” wherein the practice will charge a membership fee in addition to fees for non-covered services. But this model is inherently risky. 

Let’s say Dr. Smith sees a Medicare patient and offers a service. Before charging his patient, Dr. Smith must check to see if this service is indeed not already covered by Medicare. For starters, Dr. Smith needs to ensure that his membership charges are actually for non-covered services. While it may seem to be a simple matter to see if a service is covered under Medicare by placing an inquiry online, Medicare regulators’ are constantly updating their list of covered services.

So even if Dr. Smith previously found this service wasn’t covered under Medicare, it may be now. Or, it may be, but under a different name. “Without opting out, the provider must carefully ensure that all membership charges are levied for ‘non-covered services;”, says Dr. Phil Eskew. “Simply put,” he counsels, “you do not want to be involved in this battle.” 

Should you find your service to not be covered by Medicare, there are still some conditions you need to be aware of. As the scope of covered services expands, the ability to structure a membership plan strictly for non-covered services becomes more difficult. Simply naming your services something new may not suffice and may in fact be in violation of the False Claims Act. Medicare auditors (such as RACs or ZPICs) could make the argument that services you believe are non-covered are in fact covered services.

Fear of the False Claims Act

If you choose to opt for a fee for non-covered services model (aka “concierge model”) and stay in Medicare, legal counsel is almost mandatory.  MDVIP and other “concierge” groups operate in this manner and employ attorneys tasked with regularly following developments in this area. That’s another obstacle between you and your patient.

Dr. Rob Lamberts, founder of Dr. Rob Lamberts LLC, admits that under Medicare, he worried if he’d be considered liable for “fraud if I didn’t have enough notes or gave a discount to a customer.” Living under the False Claims Act and trying to navigate Medicare’s regulators means constant fear of an audit closing your practice.

Dr. Erika Bliss of Seattle’s Qliance Medical Group cites one of the major problems with being opted into Medicare is the conflicts you can run into with Medicare regulators, even when you’re trying to do what’s best for your patients. Traditionally, a Direct Care practice will charge a membership fee that will cover a host of benefits with no fee-for-service or per-visit charges. But in Dr. Bliss’s experience, this is where Direct Care providers run afoul of Medicare regulators if they are participating providers (or "opted in"). “If you’re opted in, you are saying you will bill Medicare for services. You can’t give things away for free or include things that Medicare would otherwise cover,” she says. For DPC’s working with insurance plans, things like co-pays can be a huge factor.  “If you start waiving co-pays, it gets you and the plan in hot water with CMS [the Center for Medicare and Medicaid Service]. It can be seen as an inducement.”

Obstacles Between You and Your Patient

With the focus of your practice increasingly dedicated to Medicare compliance and legal matters, many feel that under Medicare, the focus of your practice shifts from being about the doctor/patient relationship. For Dr. Lamberts, the advantage of being a Direct Care provider are increased access, more flexibility and power in running your practice. With Medicare, he laments that “You lose all of the advantages of Direct Primary Care if you don’t opt out.” 

Providers who stay in Medicare often find instead of providing personalized care, you’re in fact finding a litany of ways to take advantage of the customer. "Customer service was about making the insurance companies happy. Patients are like cows that you milk,” Lamberts explains. “I didn’t want to be there anymore.” 

The advantages of the Direct Care model is the relationship with customers, and with Medicare, many doctors feel they lose that relationship. Doctor Rob Lamberts, sees opting out as the best way to preserve that relationship “unless you choose not to see Medicare patients.”

Benefits of Opting Out

Opting out of Medicare allows providers to see Medicare patients under private contract. Many providers, such as Dr. Phil Eskew, Dr. Erika Bliss, and Dr. Robert Lamberts, find this approach more convenient and free of the tangle of Medicare regulations or running afoul of False Claims Act laws.

At his new practice, Dr. Lamberts has opted out of Medicare. He has found that once again, the patient/doctor relationship is front and center. “If I don’t give them the [patients] the value they need, they leave; and that’s fine. But I’ve had almost no one who’s left me.” 

Now, instead of feeling powerless at the hands of Medicare’s regulations and the insurance company’s billing mandates, it’s just himself, his nurses, and his patients. “The joy of what we do is that it’s such a contrast of the misery in other providers,” Lamberts explains. “It’s 180 degrees different.”

At Qliance, individual providers are required to opt out of Medicare. Dr. Bliss advises that if you’re a Direct Care practice with no intention of partnering with a Medicare Advantage plan like Humana, a Blues plan or United and you’re going to cater strictly to individual Medicare members, then she recommends opting out: “You can charge patients what you want, for whatever you want, whether or not it’s included in Medicare.”

How Would Providers Opt Out?

The clearest summary of the steps one must take to opt out of Medicare have been summarized by the American Association of Physicians and Surgeons.  Medicare also lists the steps needed in the form of a web bulletin, and has a summary designed for patients attempting to understand physician categories

The American Academy of Family Physicians has a summary of the three Medicare categories. Physicians may be Medicare participating, non-participating, or opted out.  The non-participating status is all but extinct at this stage, as most physicians found it an unuseful category because the charges that can be levied with this status are still limited and controlled by Medicare rates.  All physicians are defaulted into the Medicare participating category, and must actively opt out (and renew the opt out every two years) in order to avoid being placed back into the Medicare participating group.

While some may argue otherwise, there is no one size fits all approach to working with Medicare patients as a Direct Care provider. The key is finding a relationship that works for you based on the size and patient makeup of your practice. Give yourself time to make a decision that feels right to your practice, and talk to other practitioners who have opted out, as well as those who have stayed opted in.