Don't forget: Last day to change your Medicare participation status for 2015 is 12/31

December 22, 2014

It's that time of year again – time for physicians to decide about their participation in Medicare. Physicians have until Dec. 31, 2014, to make changes to their status for 2015. In addition to the annual threat of steep payment cuts as a result of the sustainable growth rate (SGR) formula, another factor for physicians to consider is that 2015 will be the first year that the Centers for Medicare & Medicaid Services (CMS) will impose penalties under the value-based modifier (VBM) program for large medical groups of 100 or more physicians.

As always, 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 participations 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 percent of participating physician fees. If you choose not to accept assignment, you can charge the patient 9.25 percent more than the amounts allowed in the participating physician fee schedule (which equates to 15 percent 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.The California Medical Association (CMA) also has information on physicians' Medicare participation options in CMA On-Call document #7209, "Medicare Participation (and Nonparticipation) Options." On-Call documents are free to members in CMA's Health Law Library. Nonmembers can purchase On-Call documents for $2 per page.

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 percent is slated to take effect on April 1, 2015, unless Congress passes legislation to stop the cut which they have done 17 times. 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.

Contact: Michele Kelly, (213) 226-0338 or mkelly@cmadocs.org.



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