San Francisco Marin Medical Society Blog

December 31: Deadline to Change 2015 Medicare Participation Status



Physicians have until December 31, 2014, to make changes to their status for 2015.

Two factors physicians should consider when deciding whether or not to participate in Medicare are:

  • Possibility of steep payment cuts as a result of the sustainable growth rate (SGR) formula
  • Penalties imposed under the value-based modifier (VBM) program for large medical groups of 100 or more physicians

Physicians have three choices regarding Medicare: Be a participating provider; be a nonparticipating provider; or opt out of Medicare entirely.

The VBM penalties and bonuses will not, however, apply to unassigned claims. That means a nonparticipating physician would not be subject to a VBM penalty. According to CMS, more than 1,000 groups of 100 or more eligible professionals will see payment penalties from the VBM in 2015. Next year will also be the base reporting year for the 2017 penalties imposed on smaller practices.

Other penalties that will be applied in 2015 based on 2013 performance—including those tied to quality reporting, meaningful use and e-prescribing—will decrease the limiting charge amounts that nonparticipating physicians can bill to patients for unassigned claims.

The three participation options are as follows:

  • A participating physician must accept Medicare allowed charges as payment in full for all Medicare patients.
  • A nonparticipating provider can make assignment decisions on a case-by-case basis and to bill patients for more than the Medicare allowance for unassigned claims. Nonparticipating physician fees are 95% of participating physician fees. If you choose not to accept assignment, you can charge the patient 9.25% more than the amounts allowed in the participating physician fee schedule (which equates to 15% of the nonparticipating fees).
  • Physicians who opt out of Medicare are bound only by their private contracts with their patients. Medicare's limiting charges do not apply to these contracts, but Medicare does specify that these contracts contain certain terms. When a physician enters into a private contract with a Medicare beneficiary, both the physician and patient agree not to bill Medicare for services provided under the contract.

Physicians who want to change their participation status for 2015 must send a letter to their Medicare contractor postmarked by December 31, 2014.

Additional information can be found in the American Medical Association (AMA) Medicare Participation Kit. The kit contains a detailed explanation of physician options, a calculator and various sample materials for communicating with patients. The Medicare payment calculator will help you estimate how much your total revenues from Medicare patients would change if you switch your Medicare status from participating to non-participating.

The next SGR Medicare payment cut of 21% is slated to take effect on April 1, 2015, unless Congress passes legislation to stop the cut which they have done 17 times. SFMS and CMA will be working with AMA to stop the cuts and pass the SGR repeal and Medicare payment reform legislation (HR 4015/S 2000) before April 1.


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