Q: What are my choices for seeing Medicare beneficiaries and being reimbursed for my services?  

A:You have four choices with Medicare, each with its own characteristics and consequences: 1) enroll as a participating provider (par); 2) enroll as a non-participating provider (non-par); 3) opt out of your previous Medicare enrollment; and 4) do not enroll in Medicare.

 

Q: What does it mean to become a participating provider?

A: First, you agree to accept assignment on all Medicare claims. Second, you accept Medicare's fee schedule as payment in full. Next, you submit claims to and receive reimbursement directly from Medicare. And finally, Medicare forwards claim information to many secondary payers for you.


There are a few differences between par and non-par providers. As a non-par provider, you may elect to accept or not accept an assignment on a claim-by-claim basis. Also, reimbursement rates from Medicare are reduced (to 95 percent) from those of the participating provider; however, you may collect up to the Medicare limiting charge from the beneficiary.


Another difference is that you submit the claim as unassigned, and collect payment from the patient; then Medicare pays the patient. Or, if you accept assignment, you submit the claim and collect payment from Medicare directly. Medicare forwards claim information to many secondary payers for you.


In total, approximately 95 percent of physicians elect to participate in Medicare on an annual basis. Please note that some providers, such as ambulatory surgery centers,
certified registered nurse anesthetists and nurse practitioners, must participate in Medicare. 



Q: Are par providers reimbursed more than non-par providers?

A: Yes. The non-par provider receives 5 percent less from Medicare on assigned claims. For example, the table below compares the par vs. non-par Medicare reimbursement rates for a variety of ophthalmic services utilizing national reimbursement rates for 2009. The reason non-par providers actually receive more money for their services is that Medicare beneficiaries pay a higher portion of the professional charge or limiting charge.


Furthermore, Medicare tends to treat non-par providers differently, in that they publish the names of participating physicians in their MEDPARD directory and pointedly omit the non-par physicians. In recent years, Medicare added a statement to its Explanation of Benefits informing beneficiaries that out-of-pocket expense is greater when seeing a non-participating provider.

 


Q: Why are physicians hesitant to change their status to non-par?

A: Having to explain the change to numerous patients is enough to discourage physicians from doing it. It's no secret that patients are sensitive to the rising cost of health care and their out-of-pocket expenses. Medicare beneficiaries who have previously seen participating providers may be surprised to find that they are responsible for more than the standard 20 percent when care is provided by a non-par doctor. Some comment, "My other doctors don't do this," and ask why the practice does not participate with Medicare.

 


Q: What is the limiting charge that non-par providers can bill?

A: The limiting charge non-par providers can bill to Medicare beneficiaries is 9.25 percent higher than the allowed amount for participating providers. Table 2 compares the particpating reimbursement rates vs. the limiting charge for a variety of ophthalmic services utilizing national reimbursement rates for 2009.


 


Q: What should I review prior to considering a change in status?

A: There are several things to review prior to making this shift. Examine your payer mix.
You may find that you have fewer Medicare beneficiaries than you thought. Determine how much of your patient base has Medicaid as a secondary payer. If Medicaid is functioning as a secondary payer, it rarely pays anything after Medicare, and these patients would not be expected to pay the difference if you are a Medicaid provider.



Q: What are the secrets to success for going the non-par route?

A: Successful non-par practices emphasize the importance of communication with pat-ients. Their staffs are carefully trained, and answers for the most common questions are scripted to ensure a positive and consistent response. Patients with supplemental insurance are the easiest to handle because they generally don't have additional out-of-pocket expense. Also, success depends on the efforts of the billing staff to accurately and assiduously manage the claims process and collection effort, particularly at the time of service.

 


Q: What does it mean to "opt out" of Medicare?

A: Opting out is significantly more involved than being a non-par provider. Physicians enter into a private contract with each Medicare patient, and the patient agrees to pay the physician for all services. Neither party may file a claim. The physician must sign an affidavit with the Centers for Medicare & Medicaid Services advising them of the decision to opt out.


There are some situations where opting out makes sense. Electing to opt out or not enroll is realistic in practices where the Medicare beneficiaries are an insignificant part of the practice (e.g., LASIK surgeon, optometrist focusing on eyeglass and contact lens sales).
A semi-retired or part-time surgeon who is financially secure may consider opting out as a reasonable approach. 


Whichever you opt for, timing is important. If you have never enrolled in the Medicare program and are considering your options for the first time, you would inform Medicare of your decision to be a par or non-par provider when you complete your enrollment application(s) unless you decide not to enroll at all. If you are already enrolled in the Medicare program and you want to change your status from par to non-par, or vice versa, you must do this in November or December for the following year. You do not need to inform them unless you are making a change.

 

Ms. McCune is vice president of the Corcoran Consulting Group. Contact her at [email protected].