Tough Decision | What to do about Medicare


It seems both ironic and inevitable: I won\’t be getting any more \”meaningful use\” checks.  It\’s not that I didn\’t qualify for the money; I saw plenty of patients on Medicare and met all of the requirements.  I was paid for my first year money without much hassle.  The problem I am facing is this: I am probably going to be \”opting out\” of Medicare, and once I do that I will cease to exist as far as HHS is concerned, and they are the ones who write the \”meaningful use\” checks.  No existence equals no money.

This is ironic because I have gotten famous for how well I\’ve used electronic medical records, have written advice for physicians trying to qualify for \”meaningful use,\” and am esteemed enough to be often asked for my opinion on the subject (culminating in a presentation last year for CDC public health Grand Rounds).  I have spent much of the past 16 years disproving the myths that small practices couldn\’t afford EMR, that EMR decreases profitability, or that they reduce quality of care.  We not only could afford EMR, we flourished, using it as a tool to increase both productivity and profitability.  Not to overstate the issue, but my practice (and others like it) paved the way for the existence of \”meaningful use.\”  I don\’t know if that\’s a good or a bad thing.

But, as fate would have it, I am leaving the practice in which I did all of this work and am starting a new practice with a different payment system.  Instead of charging for office visits or tests done in my office, I am charging a monthly \”subscription\” fee for access to my care and to the other resources I offer.  But there isn\’t a Medicare code for a monthly subscription fee, and the rules of Medicare are such that, as far as I can tell, I cannot have the practice I intend to build and be listed as a Medicare provider.  This is the case even if I never charge Medicare for any of my services.

Regarding my status as a Medicare provider, there are three options:

  1. Accept Medicare as a \”participating\” provider – This means that I see Medicare patients and accept what they say I will be paid.  I bill CMS for my services, which are based on my \”procedure codes.\”  My main procedure is the office visit, but I can also bill for things like immunizations, lab tests, and office procedures.  The more procedures I bill for, the more I get paid, but I must justify this billing in my documentation or run the risk of being accused of fraud.
  2. Become a \”non-Participating\” Medicare provider – In this scenario, I am paid by the patient for the encounter and then they are reimbursed for what they paid me.  The choice of what I bill happens the same way, and I still must set fees based on what CMS tells me (although I can bill a little bit more than I would if I was a participating provider).  Billing is, once again, based on the documentation of the visit.
  3. \”Opt out\” of Medicare altogether – Opting out means that I am no longer in the Medicare database as a provider and won\’t get paid by them at all.  Patients are free to come to me, but they must pay what I charge, and I set my fees based on what I think is best.

So why does this matter if I am not planning to send any charges to Medicare?  Why do they care if I charge a monthly fee for my services if patients agree to do this outside of Medicare\’s coverage?  By becoming a provider for Medicare (participating or not) I agree to accept their payment for my services.  The exception to this is for services that are not normally covered by Medicare, for which (with the proper waiver signed by my patients) I can charge what I want.  Cosmetic surgery is a good example (and one for which many Florida plastic surgeons are thankful) where the patient may opt to pay out of pocket for non-covered services.  Many of my services would actually fall under non-covered status, including electronic visits, my help with the PHR, annual care plan review, and the premium education content I will include on my website.  But since my Medicare patients will be able to receive care that is normally reimbursed (office visits, lab tests), the monthly subscription could be seen as accepting payment for these services outside of the agreed-upon Medicare rate.

As an \”opted out\” provider, I can see Medicare patients as long as they have signed a contract with me that meets Medicare\’s requirements.  Since this will be the case with all of my patients, it should be no problem seeing Medicare patients in my office.  Unfortunately, opting out of Medicare has some pretty major downsides:

  1. I could only see Medicare patients who have signed a contract with my practice.  This means that I could not work in an ER or a prompt care to supplement my income (unless I figured out a way to see only non-medicare patients).  It takes away a pretty big financial \”safety net.\”
  2. I would be unable to get back to provider status for two years.  The mandatory opt-out period is for two years (so physicians don\’t go on and off of Medicare frequently).  Again, this raises the stakes for me, as I can\’t just go back to the old way if this practice doesn\’t succeed.
  3. Many of my Medicare patients would think they couldn\’t keep me as their doctor.

Giving up the $12,000 check for \”meaningful use\” is a minor consideration compared with these two things.

So why not stay in Medicare?  Let me count the ways:

  1. I have to bill for care.  Simplicity is one of the cornerstones of a direct-care practice, while complexity is synonymous with medical billing.  I don\’t want to have people owing me money, I want them to pay at the start of the month for everything.
  2. Billing for Medicare would also mean I\’d have to bill all other patients for the same services, as I am not allowed to charge others less than I do for Medicare beneficiaries.
  3. I\’d have to get (and pay for) a billing system.
  4. I\’d have to hire staff to do the billing and collect on it.
  5. I\’d have to write my notes to meet the requirements for payment (as opposed to writing them for better patient care).
  6. I\’d have to submit my bills using the proper procedure codes, paired with the proper diagnosis codes, submitted in the proper format, sent to the proper vendor.
  7. I\’d have to deal with denied claims and the appeals process.
  8. Failure to do any of this (either by intent or mistake) would leave me open to fraud charges (even if my doing so was to my own financial detriment).


So, I am left with the choice: accept the consequences of opting out, or stay in the world of codes, complexity, and the ever looming threat of fraud accusation.  But this isn\’t the real choice for me; the real choice is a much easier one: who do I want to work for, the patient or the payor?

I guess it\’s only fair that I put my future in the hands of my patients, since they\’ve been trusting their futures to me for the past 18 years.

12 thoughts on “Tough Decision | What to do about Medicare”

  1. Easy. You put your future in your and your patients hands. There will be some that will complain that since you are opting out your are “leaving them.” False. By opting out you will be able to provide quality and individually directed care at a price less than scheduled car maintenance or an active smokers habit.
    For you, you now can focus on the patient, provide more preventive care (rather than ‘catch up/sick care’ which seems so much more common) AND reduce your stress (increasing your health and thus the ability provide even better care).

    Whats the worst that can happen? No patients come to your practice and you need to shut down your low overhead practice model. Go practice in New Zealand for two years (they want PCP’s) until you can opt back in to medicare.

    I honestly dont think that will happen but would living/practicing in another country for a few years be a BAD thing?

    Good luck to you and all the best for your exciting endeavor!

  2. I agree with Kevin’s wise words. Speaking from a similar situation with Chris I find these words especially true…”you now can focus on the patient, provide more preventive care (ratherthan ‘catch up/sick care’ which seems so much more common) AND reduce
    your stress (increasing your health and thus the ability provide even
    better care)”…

    Opt out.

  3. I made the same type of decision in my pharmacy in Michigan. I could no longer afford the business so I gave up Medicaid and Blue Cross and returned to profitability in short order. Several years later I can say that It was a tough but good financial move.

  4. I always knew Medicare was a pain in the backside…and I’m just a mere coder. But I like the idea that without worrying about all the rules that come with Medicare, you’ll be able to provide better care for your patients. After all, that’s what medicine is supposed to be about…and I hope your regulars who do have Medicare realize they won’t have to find another doc. Hope this works out well for all involved; I’m sure you’ll keep us posted!

  5. I am ambivalent about a single-payor system. While it solves certain problems nicely, it does little to control cost (and I’ve heard some very compelling arguments that costs will rise significantly during the transition period). I’ve said before that arguing about who pays for care is like arguing about who captains the Titanic. The hole in the side of the boat is spending, and I believe that what I am doing will possibly let me reduce what patients have to spend on their care.

    But I do agree that our current insurance company led arrangement is an abysmal failure and a single-payor may be inevitable. I have serious doubts, however, that a country which can barely pass any legislation could take the big step to a single-payor. The ACA was pretty tame, and see what a fuss it caused! That is ultimately why I went to the direct care model, as it offers something that gives good care but is not priced out of reach for most people. We will see.

  6. Since most of the comments here are from various medical professionals, let me provide one from a patient.

    Last week I received the “I’m opting out of Medicare” letter from the doctor who’d been my primary care physician for 15 years. I understand that in the metropolitan Washington DC area this is quite common, since there’s such a supply of patients with “regular” insurance that doctors don’t miss the revenue Medicare patients would provide. Thus far I’ve found it impossible to find a doctor taking “new” Medicare patients, and, based on my doctor’s action, “old” Medicare patients aren’t too long for this new world.

    I’ve had taxes relating to Medicare withheld from my paycheck all my working life; the premium is currently deducted from my social security check, which is a laughable $948/month. Can I afford “fee for services”? I think not. But Medicare, which I’ve paid for and which I STILL am paying for, gets me nothing.

    So, dear doctors, as you complain about your low reimbursement rates, paperwork, and regulations, think about your PATIENTS, who will have to go without care they can’t afford. Where were you during that brief nano second that single payer was “on the table,” before Obama dealt it away to the insurance companies?

    We, your patients, would like to support you and get the insurance companies off your necks and out of your billing procedures, but all we ever seem to hear are cries of “socialized medicine.” Believe me, I’d be happy for ANY medicine right now.

  7. they probably have llamas in NZ, but i would NOT want to give you any excuse to become an expat!

  8. I’m a healthcare administrative consultant and I applaud you. Not only that I have successfully taken practices out of Medicare after doing a full practice analysis. Some can afford to and some can’t (IN THE SHORT RUN) Not only do I tell my clients to think about tomorrow but what the system is going to look like in a year to 10 years down the road. Physicians OPTING out Medicare may see a decrease in patient volume which results in a lower bottom line, however that’s only the short story. The future is “dim” for Medicare. Medicaid? I have not worked with a Medicaid provider in a few years. People forget physicians are businesses too. YES many care about their patients, but they have a family to feed and a passion of the industry to make a statement. There have been physicians to opt out of Medicare to simply make a statement that govt run healthcare is killing primary care! People do NOT understand all of the hoops a physician has to jump through to be in compliance with Medicare! They get caught up in these regulations and patient care does indeed decline. KUDOS to you Doc.. I’ve read your other blog entries on “fee for services” model.. I too have successfully transitioned practices to Concierge care and they are fast on their way to building successful practices and ones very much talked about by their patients. 🙂

  9. Do you realize a single payer system results in that single payor being overseen by the federal govt? That should NOT be a comfort to anyone on Medicare, it certainly isn’t a comfort to me! The govt has already proven their capability of running really BAD programs. Their track record with Medicare, Medicaid and TriCare proves that.

  10. Dr. Rob, I am a patient rather than a health care professional. I have been under treatment for nhl since June 2004. I think I understand your approach. But one of the first thing that crossed my mind was this. Every bill I have received from the smaller hospitals, and some private practice Drs. Have always billed Medicare for thousands of dollars more that they were actually going to receive. My assumption was that those Dr’s opting out of medicare were going to bill their private patients for the greatest amount. If that were true there is no way that I could be a participant in that because of the finances. I, like many others, do not have the portofilio of 500 K and are retired. It blindsided many of us. I worked and paid significant premiums for 30+ years only to be told when I reached 65, sorry, you are now on medicare. The result, private companies got the benefit of the 30 years of premiums that I had paid. I might add that during that time there were very few claims. Now that I need the services my friends and neighbors, via medicare, must pay the bill.

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