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With physician Medicare reimbursement on the chopping block for 2014, many providers are exploring their Medicare contracting options in advance of continued payment cuts. This blog provides a brief summary of the three contracting options available: participating (PAR), non-participating (non-PAR), private contracting or Medicare Opt-Out.Add Media
The election to change contract options is made annually (by the end of the year) for PAR and non-PAR. For physicians who choose private contracting or Opt-Out, once the election is made, they cannot submit claims to Medicare for any of their patients for a two-year period. It is, therefore, important to fully understand the ramifications of each option and how it will affect your practice.
The most common contracting option is Medicare participating or PAR provider. There are several advantages to this option. Medicare pays PAR providers a 5% higher rate than non-PAR providers and their names are included in directories provided to seniors. In addition, physicians affiliated with hospitals, convalescent homes, skilled nursing facilities, etc. are more apt to be contractually obligated to a Medicare Participating status.
PAR providers must accept assignment on all claims for their Medicare patients. The physician, however, is not required to accept every Medicare patient who seeks treatment. By accepting assignment the provider agrees to be paid Medicare’s approved amount or “PAR fee” as payment in full for covered services. The Medicare fee schedule for each area is available on the CMS website. Medicare pays 80% of the PAR fee and the patient and/or secondary carrier pays the 20% copayment. The provider is required to bill Medicare claims on the patient’s behalf.
Providers who contract with Medicare as Non-Participating or non-PAR are permitted to make assignment decisions on a case-by-case basis. The provider is still required to bill all Medicare claims on the patient’s behalf. For nonassigned claims, the provider can bill a higher fee and collect full payment from the patient at the time of service. Referring to the Medicare fee schedule, this is known as the “Limiting Charge” and it is 109.25% of the PAR fee. Ocassionally, due to financial hardship of the patient, the provider may elect to accept assignment on a claim. In these situations, the provider will receive 5% less payment than he would have as a PAR provider.
A provider can elect to opt out of Medicare altogether and become a private contracting physician. Patients are billed directly for their services. Providers do not bill claims or receive any payments from Medicare but there are some exceptions for emergency services. There are also specific requirements to privately contract with a Medicare beneficiary, so physicians making this election should consult an attorney to develop a private contract that meets these specifications. Sample contracts are available on the AMA website.
It is not the intention of this blog to make any recommendations regarding Medicare contract options but only to give you an overview of each option. It is strongly suggested that you review each option carefully before making any decision. To find more details about Medicare contract options, visit the CMS website.
Be sure to read my next blog on medical billing tips for the non-PAR Medicare provider practice.
For more medical billing tips and advice, please visit our website at http://www.medical-billing-guide.com.
Janice Humphries
