American College Of Surgeons - Inspiring Quality: Highest Standards, Better Outcomes

Medicare Participation Status Information

Example: A service for which Medicare fee schedule amount is $100

Payment
arrangement

Total payment rate

Amount from Medicare

Payment amount from patient

PAR Physician

100% Medicare fee schedule = $100

$80 (80%) carrier direct to physician

$20 (20%) paid by patient or supplemental insurance (e.g. Medigap)

Non-PAR/ assigned claim

95% Medicare fee schedule = $95

$76 (80%) carrier direct to physician

$19 (20%) paid by patient or supplemental insurance (e.g. Medigap)

Non-PAR/ unassigned claim

Limiting charge of 115% of 95% Medicare fee schedule (effectively, 109.25%) Medicare fee schedule = $109.25

$0

$76 (80%) paid by carrier to patient + $19 (20%) paid by patient or supplemental insurance + $14.25 balance bill paid by patient.

Physicians have until December 31, 2011 to change their Medicare participation or nonparticipation status for calendar year 2012. Fellows wishing to change their participation status can do so by supplying written notification to their Medicare contractor. Any change in status will be effective January 1, 2012. Physicians who want to continue their current PAR or non-PAR status do not need to take any action.

Those physicians who wish to change their status from PAR to non-PAR or from non-PAR to PAR are required to do so before December 31, 2011, and this decision is binding throughout the calendar year.

Below is a brief overview of Medicare contractual options available for physicians. The College is not recommending or offering legal advice on any of the three options discussed below, and we recommend that Fellows consult with an attorney to ensure full compliance prior to making a status change decision.

There are three Medicare contractual options for physicians: participating (PAR), non-participating (non-PAR), and private contracting. Physicians considering a change in status should review any current contractual agreements with hospitals, health plans, or other entities that require them to be PAR physicians. In addition, some states have laws prohibiting physicians from balance billing patients.

Medicare Participating (PAR) Physician

PAR physicians agree to accept assignment on all Medicare claims, which means that they must accept Medicare's approved amount (80 percent paid by Medicare plus the 20 percent patient copayment), as payment in full for all covered services for the duration of the calendar year. The patient or the patient's secondary insurer is still responsible for the 20 percent copayment, but the physician cannot bill the patient for amounts in excess of the Medicare allowance. While participating physicians must accept assignment on all Medicare claims, Medicare participation agreements do not require physicians to accept every Medicare patient who seeks treatment from them or their practice.

Medicare Non-Participating (Non-PAR) Physician

Physicians may elect to be a non-participating (Non-PAR) physician, which permits them to make assignment decisions on a case-by-case basis. All non-participating physicians, regardless of decision to assign or not assign a claim, agree to accept 95 percent of the Medicare approved amounts paid to PAR physicians for the same service. For unassigned claims, non-PAR physicians are able to bill patients 15 percent more than the Medicare allowance. However, non-participating physicians are limited to 115 percent of the 95 percent of Medicare approved amount for non-participating physicians. Therefore, the 15 percent limiting charge on unassigned claims is effectively 9.25 percent above the participating approved amount for services provided. When a non-participating physician elects to assign a claim, the Medicare carrier pays the physician directly and the physician agrees to accept 95 percent of Medicare's approved amount. Of that amount, the physician agrees to collect 80 percent from Medicare and 20 percent from the patient, as payment in full.

Private Contracting

Physicians may privately contract for health care services, agreeing to bill patients directly and forego any payments from Medicare to their patients or themselves. However, private contracting decisions may not be made on a patient-by-patient basis. To become a "private contracting physician," a physician must first opt-out of the Medicare program. Once a physician has opted out of Medicare, they cannot submit claims to Medicare for services provided to any Medicare patients for a two-year period. To privately contract with a Medicare beneficiary, a physician must enter into a private contract that meets specific requirements and file an affidavit that also meet certain requirements. There is a 90-day period after the effective date of the first opt-out affidavit during which physicians may revoke the opt-out and return to Medicare as if they had never opted out of the Medicare program.

Even if a physician has opted out of Medicare, as long as the physician has not been excluded from participation in Medicare by the Office of Counsel to the Inspector General (OIG) based on convictions for program-related fraud and abuse, licensing board actions, or defaults on Health Education Assistance Loans he/she may order, certify the need for, or refer a beneficiary for Medicare-covered items and services, provided the physician is not paid, directly or indirectly, for such services (except for emergency and urgent care services). For example, if a physician who has opted out of Medicare refers a beneficiary for medically necessary services provided by a participating Medicare provider, such as laboratory, DMEPOS or inpatient hospitalization, those services would be covered by Medicare.

Emergency Services Furnished by a Privately Contracting Physician

Physicians who have opted-out of Medicare under the Medicare private contract provisions may furnish emergency care services or urgent care services to a Medicare beneficiary with whom the physician has previously entered into a private contract so long as the physician and beneficiary entered into the private contract before the onset of the emergency medical condition or urgent medical condition. These services would be furnished under the terms of the private contract.

Physicians who have opted-out of Medicare under the Medicare private contract provisions may continue to furnish emergency or urgent care services to a Medicare beneficiary with whom the physician has not previously entered into a private contract, provided the physician submits a claim to Medicare in accordance with both 42 C.F.R. part 424 (relating to conditions for Medicare payment) and Medicare instructions (including but not limited to complying with proper coding of emergency or urgent care services furnished by physicians and practitioners who have opted-out of Medicare) and collects no more than the Medicare limiting charge, in the case of a physician (or the deductible and coinsurance, in the case of a practitioner). A physician who has been excluded from Medicare must comply with Medicare regulations relating to scope and effect of the exclusion (42 C.F.R. § 1001.1901) when the physician furnishes emergency services to beneficiaries, and the physician may not bill and be paid for urgent care services.

Please contact the ACS Division of Advocacy and Health Policy at ahp@facs.org with any questions.