Page 43 - Medicare Benefit Policy Manual

Where a physician or practitioner opts out and is a member of a group practice or
otherwise reassigns his or her rights to Medicare payment to an organization, the
organization may no longer bill Medicare or be paid by Medicare for services that the
physician or practitioner furnishes to Medicare beneficiaries. However, if the physician
or practitioner continues to grant the organization the right to bill and be paid for the
services the physician or practitioner furnishes to patients, the organization may bill and
be paid by the beneficiary for the services that are provided under the private contract.
The decision of a physician or practitioner to opt out of Medicare does not affect the
ability of the group practice or organization to bill Medicare for the services of physicians
and practitioners who have not opted out of Medicare.

Corporations, partnerships, or other organizations that bill and are paid by Medicare for
the services of physicians or practitioners who are employees, partners, or have other
arrangements that meet the Medicare reassignment-of-payment rules cannot opt out
because they are neither physicians nor practitioners. Of course, if every physician and
practitioner within a corporation, partnership, or other organization opts out, then such
corporation, partnership, or other organization would have, in effect, opted out.

40.24 - The Difference Between Advance Beneficiary Notices (ABN) and
Private Contracts
(Rev. 1, 10-01-03)
B3-3044.24

An Advance Beneficiary Notice (ABN) allows a beneficiary to make an informed
consumer decision by knowing in advance that the beneficiary may have to pay out-of-
pocket. An ABN is not needed where the item or service is categorically excluded from
Medicare coverage or outside the scope of the benefit.

An ABN is used when the physician/practitioner believes that Medicare will not make
payment, while private contracts are used for services that are covered by Medicare and
for which payment might be made if a claim were to be submitted.

See the Medicare Claims Processing Manual, chapter 30, for a description of the ABN.

40.25 - Private Contracting Rules When Medicare is the Secondary
Payer
(Rev. 1, 10-01-03)
B3-3044.25

The opt-out physician/practitioner must have a private contract with a Medicare
beneficiary for all Medicare-covered services (see §40.7), notwithstanding that Medicare
would be the secondary payer in a given situation. No Medicare primary or secondary
payments will be made for items and services furnished by a physician/practitioner under
the private contract.