Medicare Opt-Out Guide¶

Quick Summary: Opting out of Medicare allows you to see Medicare beneficiaries without Medicare billing constraints. The process requires a signed affidavit filed with your Medicare Administrative Contractor (MAC), and patients must sign private contracts before receiving services. Opt-out periods are two years, with automatic renewal.

Table of Contents¶

• What is Medicare Opt-Out?
• Why DPC Physicians Opt Out
• Who Can Opt Out
• The Opt-Out Process
• Private Contracts
• Maintaining Opt-Out Status
• Terminating Opt-Out
• Common Questions
• Checklist

What is Medicare Opt-Out?¶

Medicare opt-out is a formal process that allows physicians to:

• See Medicare beneficiaries outside of the Medicare program
• Charge patients directly without Medicare billing limitations
• Establish private contracts with Medicare patients

What opt-out is NOT: - Simply not enrolling in Medicare - Just not accepting Medicare patients - Dropping Medicare participation

Why DPC Physicians Opt Out¶

Without opt-out, problems arise: - Medicare beneficiaries cannot pay you privately for Medicare-covered services - Even if you don't bill, you may be obligated to bill - Accepting cash for covered services without opt-out may violate Medicare rules

With opt-out: - Medicare beneficiaries can pay DPC membership fees - You have a clear legal framework for private-pay relationships - No Medicare billing, claims, or audits for opted-out services

Common DPC approach: Most DPC physicians who see Medicare-age patients choose to formally opt out, even if they never enrolled in Medicare in the first place, to ensure complete clarity.

Who Can Opt Out¶

Eligible to opt out (42 CFR 405.400): - Physicians: MD and DO, and also doctors of dental surgery or dental medicine (DDS/DMD), podiatric medicine (DPM) and optometry (OD) - Practitioners: physician assistants, nurse practitioners, clinical nurse specialists, CRNAs, certified nurse-midwives, clinical psychologists, clinical social workers, registered dietitians and nutrition professionals, and, since the CY 2024 physician fee schedule rule (88 FR 79523, 2023), marriage and family therapists and mental health counselors

Cannot opt out: - Chiropractors, physical therapists in independent practice and occupational therapists in independent practice (Medicare Benefit Policy Manual, Ch. 15, §40.4)

Timing (42 CFR 405.410): - Non-participating physicians and practitioners, and those who never enrolled, may opt out at any time - Participating physicians may also opt out. The opt-out takes effect on the first day of a calendar quarter, and the affidavit must be filed at least 30 days before that day. Your participation agreement terminates on the effective date of the opt-out (42 CFR 405.420(i)); you do not have to wait for it to expire - There is no rule that pending Medicare claims must be settled before you opt out. Claims for services furnished before the effective date are handled under the ordinary rules

The Opt-Out Process¶

Step 1: Confirm Your Enrollment Status¶

• Establish whether you are participating, non-participating or never enrolled; this determines when your opt-out can take effect (see Timing above)
• If you are participating, pick the calendar quarter you want the opt-out to start and count back at least 30 days for your filing deadline

Step 2: Prepare Affidavit¶

There is no CMS standard form. Most MACs publish their own affidavit form; use your MAC's. Whatever form you use, 42 CFR 405.420 requires the affidavit to:

1. Be in writing and signed by you
2. Contain your name, address, telephone number and NPI (or, if you have no NPI, your tax identification number)
3. State that, except for emergency or urgent care, you will furnish services to Medicare beneficiaries during the opt-out period only through private contracts that meet 42 CFR 405.415, for services that would otherwise be Medicare-covered
4. State that you will not submit, and will not let anyone acting on your behalf submit, a Medicare claim for any service furnished to a beneficiary during the opt-out period (emergency and urgent care under 42 CFR 405.440 excepted)
5. State that you understand you may receive no direct or indirect Medicare payment for services to privately contracted beneficiaries, whether as an individual, an employee of an organization, a partner, under a reassignment of benefits, or for a service furnished under a Medicare Advantage plan
6. Acknowledge that during the opt-out period your services are not covered under Medicare and no Medicare payment may be made to any entity for them, directly or on a capitated basis
7. Acknowledge that you agree to be bound by the terms of the affidavit and of your private contracts
8. Acknowledge that the affidavit applies to all Medicare-covered items and services you furnish to beneficiaries during the opt-out period, regardless of any payment arrangements you make (emergency and urgent care to beneficiaries with no private contract excepted)
9. If you have signed a Part B participation agreement, acknowledge that it terminates on the effective date of the affidavit
10. Acknowledge that a beneficiary who has not signed a private contract and who needs emergency or urgent care may not be asked to sign one, and that 42 CFR 405.440 governs those services

Step 3: File with Your MAC¶

Find your Medicare Administrative Contractor (MAC): - CMS MAC List - MACs are regional; file with the MAC for your practice location

How to file: - Mail or fax to your MAC - Some MACs accept electronic submission - Keep proof of submission (certified mail receipt, fax confirmation)

When it takes effect (42 CFR 405.410©-(d)): - Non-participating or never enrolled: the opt-out is effective on the date you sign the affidavit, provided you file it with the MAC within 10 days after signing your first private contract with a Medicare beneficiary. If you file later than that, the opt-out is effective on the date the affidavit is filed - Participating: the opt-out is effective on the first day of the calendar quarter you selected, and the affidavit must be filed at least 30 days before that day - Do not furnish services under a private contract before the effective date

Step 4: Prepare Private Contracts¶

You must have signed private contracts with Medicare beneficiaries BEFORE providing services. See Private Contracts below.

Private Contracts¶

Requirements¶

42 CFR 405.415 lists fifteen elements. Every private contract with a Medicare beneficiary must:

1. Be in writing, in print large enough that the beneficiary can read it
2. State clearly whether you are excluded from Medicare under sections 1128, 1156 or 1892 of the Social Security Act or any other provision
3. State that the beneficiary (or legal representative) accepts full responsibility for paying your charges for all services you furnish
4. State that the beneficiary understands Medicare limits do not apply to what you may charge
5. State that the beneficiary agrees not to submit a claim to Medicare and not to ask you to submit one
6. State that the beneficiary understands Medicare will not pay for any of your items or services that would otherwise have been covered had a proper claim been submitted
7. State that the beneficiary enters the contract knowing they have the right to obtain Medicare-covered services from physicians and practitioners who have not opted out, and are not compelled to enter private contracts for services from other physicians who have not opted out
8. State the expected or known effective date and expiration date of your opt-out period
9. State that the beneficiary understands Medigap plans do not, and other supplemental plans may elect not to, pay for items and services Medicare does not pay for
10. Be signed by the beneficiary (or legal representative) and by you
11. Not be entered into while the beneficiary needs emergency or urgent care (you may still furnish that care under 42 CFR 405.440)
12. Be given to the beneficiary (a photocopy is fine) before items or services are furnished under it
13. Be retained by you, with both original signatures, for the duration of the opt-out period
14. Be made available to CMS on request
15. Be entered into anew for each opt-out period

Sample Private Contract Language¶

Private Contract (Medicare Opt-Out)

Patient Name: _______________ Date: _______________

I understand that:

1. Dr. [Name] has opted out of the Medicare program. The current opt-out period is expected to run from [effective date] to [expiration date].

2. Dr. [Name] [is / is not] excluded from Medicare under sections 1128, 1156 or 1892 of the Social Security Act or any other provision of law.

3. I agree to pay Dr. [Name] directly for all services provided, and I accept full responsibility for those charges.

4. Medicare limits on charges do not apply to what Dr. [Name] may charge me.

5. Medicare will not pay for any services provided by Dr. [Name] during the opt-out period, even if they would otherwise have been covered.

6. I will not submit claims to Medicare for services provided by Dr. [Name], and I will not ask Dr. [Name] to submit them.

7. I am not currently facing a medical emergency or in need of urgent care.

8. Medigap plans do not, and other supplemental plans may elect not to, pay for services Medicare does not pay for.

9. I enter this contract freely and voluntarily, understanding that I have the right to receive Medicare-covered services from physicians who have not opted out of Medicare, and that I am not required to sign private contracts with other physicians who have not opted out.

10. I have received a copy of this contract before any services were provided under it.

11. This agreement applies to all services provided by Dr. [Name] during the opt-out period stated above. A new contract is required for each opt-out period.

Patient Signature: _______________ Date: _______________

Physician Signature: _______________ Date: _______________

Print the contract in a legible type size, keep the signed original for the whole opt-out period, and be ready to produce it if CMS asks. The contract covers services that would be covered by Medicare but for the opt-out (42 CFR 405.405(a)); services Medicare never covers need no private contract.

DPC Integration¶

For DPC practices, the private contract can be: - Part of your membership agreement, OR - A separate document signed at enrollment

Recommended: Include private contract language directly in your DPC membership agreement for Medicare-age patients, so everything is in one document.

Maintaining Opt-Out Status¶

Automatic Renewal¶

• Opt-out periods are two years
• Opt-out automatically renews unless you terminate
• No need to re-file affidavits for renewal

Ongoing Requirements¶

• Keep signed private contracts on file for all Medicare beneficiaries
• Maintain private contracts for the duration of opt-out period
• Do not submit any claims to Medicare

If You Add Practice Locations¶

• You may need to notify additional MACs for new practice states
• Maintain opt-out status in all locations where you see Medicare beneficiaries

Terminating Opt-Out¶

If you decide to end your opt-out and return to Medicare:

When You Can Terminate¶

• At least 30 days before the end of the current two-year opt-out period
• Must provide written notice to your MAC
• Exception for a first opt-out: you may terminate within 90 days of its effective date (see Can I opt back in before two years?)

What Happens¶

• You can re-enroll in Medicare
• You cannot submit claims for services provided during the opt-out period
• Your private contracts end with the opt-out period; they cannot outlive it, and each new opt-out period needs new contracts (42 CFR 405.415(o))

Important¶

Once you terminate opt-out: - All Medicare rules apply immediately

Common Questions¶

Do I need to opt out if I never enrolled in Medicare?¶

Recommended yes. Filing an opt-out affidavit provides clear documentation of your status. Some attorneys advise opting out even if you've never enrolled, to create an unambiguous paper trail.

Can Medicare beneficiaries use their Medigap insurance?¶

No. Private contracts are completely outside Medicare. Medigap policies only supplement Medicare payments—if Medicare doesn't pay, neither does Medigap.

What about Medicare Advantage patients?¶

Medicare Advantage plans (Part C) are administered by private insurers, but they're still Medicare, and the opt-out rules apply to them too. An MA plan may not pay you for Medicare-covered services, with two exceptions under 42 CFR 422.220: it must pay for emergency or urgent care you furnish to its enrollees, and it may choose to pay for supplemental benefits. For routine DPC services, your MA patients pay you under the private contract.

Can I see some Medicare patients under Medicare and others under private contract?¶

No. Once you opt out, you're out for all Medicare beneficiaries for the entire opt-out period. You cannot see some patients under Medicare and others privately.

What if a patient has a medical emergency?¶

You cannot enter a private contract with a beneficiary who needs emergency or urgent care at that moment. 42 CFR 405.440 then splits two ways: if the beneficiary has no private contract with you, you must submit a claim to Medicare for the emergency or urgent care and may not charge more than the Medicare limiting charge; if the beneficiary already has a private contract with you, the contract governs and no claim is filed. For DPC, established patients already have private contracts in place before any emergency arises.

Can I opt back in before two years?¶

Once, if it is your first opt-out. Under 42 CFR 405.445(b) (see also Medicare Benefit Policy Manual, Ch. 15, §40.35), a physician or practitioner opting out for the first time may terminate the opt-out within 90 days of its effective date. You must notify every MAC you filed with no later than 90 days after the effective date, refund each privately contracted beneficiary everything you collected above the Medicare deductible and coinsurance that would have applied, and notify those beneficiaries of the termination and of their right to have claims filed with Medicare for those services. After the 90 days, or for any later opt-out, the two-year period runs its course.

Can I still order tests, refer patients and prescribe?¶

Yes. Opting out ends Medicare payment for your own services; it does not end your ability to order, certify the need for, or refer a beneficiary for Medicare-covered items and services, provided you are not paid, directly or indirectly, for those services (42 CFR 405.425). Medicare's ordering and certifying rule (42 CFR 424.507) accepts a physician who has validly opted out, so your patients' labs, imaging, durable medical equipment and home health orders remain payable, and the same holds for the Part D prescriptions you write. Keep your opt-out current with the MAC so that check succeeds.

Checklist¶

Before Filing¶

• Confirm your enrollment status (participating, non-participating or never enrolled) and the resulting effective date
• Review any participation agreement terms
• Prepare affidavit language
• Identify your MAC

Filing¶

• Submit affidavit to MAC (certified mail recommended)
• Keep copy of affidavit and proof of submission
• Note the effective date

Operations¶

• Prepare private contract template
• Integrate private contract into membership agreement (for DPC)
• Train staff on Medicare patient intake
• Have all Medicare beneficiaries sign private contracts before services

Ongoing¶

• Maintain signed private contracts on file
• Track two-year opt-out period end date
• Decide on renewal vs. termination 30+ days before period ends

Resources¶

• CMS Opt-Out Affidavits dataset — the public list of opted-out physicians and practitioners
• CMS MAC Contact Information
• 42 CFR 405.400-405.455 — Medicare opt-out regulations (Subpart D)

Sources checked against primary law and agency guidance on 2026-09-22.

Related Guides¶

• Transitioning from an Existing Practice
• State DPC Laws Overview
• Membership Agreement Essentials

Medicare opt-out is a straightforward process, but documentation matters. File properly, maintain your private contracts, and keep good records.