Opting out of Medicare is a two-year contract decision, not a billing preference. A physician or practitioner signs an affidavit, signs a private contract with every Medicare patient, and gives up Medicare payment for the whole period. The affidavit sets when the clock starts, and the private contract sets what the practice can charge and collect.
What this covers
- An opt-out runs two years and covers every Medicare beneficiary and every Medicare-covered service. A practice cannot opt out for some patients or some services and keep billing Medicare for the rest.
- The effective date follows the provider’s Medicare status. A participating provider starts on the first day of a calendar quarter after filing at least 30 days ahead; a nonparticipating provider starts on the affidavit signature date if the form reaches every MAC within 10 days of the first private contract.
- Every Medicare patient signs a written private contract before the service, and the practice keeps the original for the current two-year period. Affidavits signed on or after June 16, 2015 renew automatically every two years.
- Emergency and urgent care are the only carve-out. The practice bills Medicare for those services and collects no more than the limiting charge as a physician, or the deductible and coinsurance as a practitioner.
An opt-out is a two-year decision, and the clock does not follow the practice’s plan. It follows the signature date, the calendar quarter, or the last MAC that receives the form.The effective date is fixed by rule, not by request.
The decision reaches past the clinician who signs it. An opt-out changes which claims the practice can submit, which patients can be scheduled, what the practice may charge, and what happens in an emergency. This article walks through the affidavit, the private contract, the services that stay outside the arrangement, and the billing workflow a practice has to build before the first contract is signed.
What opting out actually does
Section 1802(b) of the Social Security Act, added by section 4507 of the Balanced Budget Act of 1997 and amended by section 106 of the Medicare Access and CHIP Reauthorization Act of 2015, lets a physician or practitioner leave Medicare and treat beneficiaries under private contracts. The rules sit in 42 CFR part 405, subpart D, and in chapter 15, section 40 of the Medicare Benefit Policy Manual. A physician or practitioner who signs at least one private contract and files the affidavit is opted out for a two-year period.
The decision is global. CMS states that an opt-out provider cannot leave Medicare for some beneficiaries and stay for others, or leave for some services and keep billing for the rest. 42 CFR 405.405(b) turns one affidavit into a two-year status, and 405.405(e) makes services furnished under a compliant private contract non-covered services, so no Medicare payment reaches the practice, directly or through an entity acting for it.
During the opt-out period the practice receives no Medicare payment for those services, directly or on a capitated basis. In exchange it is not required to submit claims, is not bound by the limiting charge except in an emergency, and may bill its own fee to patients who signed a private contract.
Who is allowed to opt out
Only the provider types named in the statute and the regulation may file an affidavit. CMS publishes the current list, and it separates the physicians from the practitioners who were added later.
| Eligible to opt out | Not eligible to opt out |
|---|---|
| Doctors of medicine, osteopathy, dental surgery or dental medicine, podiatric medicine, and optometry | Chiropractors, physical therapists, and occupational therapists |
| Physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists, and certified nurse midwives | Anesthesiology assistants, qualified audiologists, and qualified speech language pathologists |
| Clinical psychologists, clinical social workers, marriage and family therapists, mental health counselors, registered dietitians, and nutrition professionals | Behavior analysts do not appear on the CMS eligible list |
Marriage and family therapists and mental health counselors joined the list on January 1, 2024, when section 4121 of the Consolidated Appropriations Act, 2023 made them Medicare-eligible providers. 42 CFR 405.400 now names both in the definition of practitioner, so a licensed counselor can opt out the same way a clinical social worker can. The same change did not reach behavior analysts, who are absent from both CMS lists, so an ABA practice has to confirm that a clinician on staff holds one of the listed credentials. That check belongs in the credentialing file before anyone files.
A MAC returns an affidavit from a provider type that is not eligible. A specialty mismatch such as chiropractic medicine, physical therapy or occupational therapy gets the form back instead of an affidavit record in PECOS.
The affidavit and the date the opt-out starts
The affidavit is the practice’s written commitment to the opt-out terms. 42 CFR 405.420 requires it in writing and signed, carrying the provider’s full name, address, telephone number and NPI, or a tax identification number when no NPI has been assigned. It must state that the provider will serve Medicare beneficiaries only through private contracts, will not submit claims, and will accept no direct or indirect Medicare payment. The provider files it with every MAC that has jurisdiction over the claims it would otherwise send.
The start date follows the provider’s Medicare status, and the two paths are easy to confuse.
| Status when filing | What the affidavit must show | Effective date |
|---|---|---|
| Participating provider | Filed at least 30 days before the chosen quarter | First day of the next calendar quarter |
| Nonparticipating or never enrolled | Filed within 10 days after the first private contract | The date the affidavit is signed |
| Nonparticipating, filed late | Missed the 10-day window | The date the last MAC receives the affidavit |
A late filing costs more than time. A private contract signed before the last affidavit is filed only takes effect when that filing completes, and services furnished before then follow standard Medicare rules. A licensed clinical social worker in New York met the other edge of the rule. She signed her affidavit on September 29, 2025 and asked for a January 1, 2026 effective date. A Departmental Appeals Board decision, CR6925, upheld CMS setting the date at September 29, 2025, because the regulation ties a nonparticipating provider’s start to the signature date.
A participating provider who misses the 30-day window waits for the next quarter, which can move the start date by up to three months. A nonparticipating provider cannot request a later date either. The effective date follows the signature, not the request.
Affidavits signed on or after June 16, 2015 renew on their own every two years. There is no renewal form to file.
The private contract, clause by clause
The private contract is what lets the practice charge its own fee, and 42 CFR 405.415 lists what it must contain. The patient signs before any service, and the practice keeps the original with both signatures for the duration of the current two-year period.
- Written in print large enough for the patient to read.
- A statement that the patient accepts full responsibility for the practice’s charge.
- A statement that Medicare limits do not apply to what the practice charges.
- The patient’s agreement not to submit a claim to Medicare or ask the practice to submit one.
- The patient’s acknowledgement that Medicare will not pay for services that would otherwise be covered.
- The patient’s acknowledgement that care is available from providers who have not opted out, and that signing is not required.
- The expected effective and expiration dates of the current two-year opt-out period.
- A statement that Medigap plans do not, and other supplemental plans may not, pay for these services.
- A statement of whether the practice is excluded from Medicare under sections 1128, 1156 or 1892.
Two timing rules carry as much weight as the clauses. A contract cannot be signed while the patient faces an emergency or urgent care need. A contract is also entered into for each two-year opt-out period, so a practice that renews writes the paperwork again.
If a Medicare beneficiary will not sign, the practice cannot furnish Medicare-covered services to that patient, with emergency and urgent care as the only exception. That limit belongs in the front-desk script before the schedule fills.
Billing the patient directly, and what still runs as usual
Once the opt-out takes effect, the practice bills the patient, or the patient’s supplemental insurer, for the charge it sets. There is no claim to Medicare, no limiting charge and no remittance advice to post. The private contract is the patient’s agreement to pay, and a medical billing services team builds the workflow that keeps it that way.
Opting out reaches Medicare only. A practice can still bill commercial payers and Medicaid for care furnished to those members. What changes is the Medicare line: the practice cannot be paid by Medicare or by a Medicare Advantage plan for a covered service, and 42 CFR 405.455 bars an MA organization from paying for a covered service furnished by an opt-out provider.
Two capabilities survive. Opting out does not stop a clinician from prescribing Part D drugs, and 42 CFR 405.425(i) lets an opt-out provider order, certify, prescribe or refer for Medicare-covered items, services and drugs as long as the provider is not paid for that work. Ordering and referring depends on an NPI and a place on the PECOS ordering and referring file. Registered dietitians, nutrition professionals and certified registered nurse anesthetists may opt out but cannot order or refer.
Submitting a claim to Medicare for a privately contracted service, or accepting a Medicare payment, is a failure to maintain opt-out under 42 CFR 405.435. A refund alone does not fix it. Configure the billing system so no Medicare claim can leave for a privately contracted encounter.
Mark Medicare beneficiaries in the schedule and confirm a signed private contract is on file before the visit.
Publish the practice’s own charge for privately contracted services, since Medicare limits do not apply.
Configure the practice management system so a privately contracted encounter cannot generate a Medicare claim.
Store the original contract for the full two-year period and make it available to CMS on request.
Emergency and urgent care: the only carve-out
Emergency and urgent care are the services an opt-out provider may furnish without a private contract, and 42 CFR 405.440 sets the terms. Emergency care means inpatient or outpatient hospital services needed to prevent death or serious impairment of health. Urgent care means services needed within 12 hours to avoid the likely onset of an emergency medical condition.
In that situation the practice submits a claim to Medicare on the beneficiary’s behalf, and what it may collect is capped. A physician may collect no more than the Medicare limiting charge. A practitioner may collect no more than the deductible and coinsurance. The cap is the price of treating a beneficiary who never signed a contract.
The rule flips when the beneficiary already has a private contract. If the contract was signed before the emergency began, 42 CFR 405.440(c) treats the emergency services as furnished under that contract, and the practice bills the patient.
If a beneficiary sends Medicare a claim for an opt-out provider’s services, the MAC asks the practice for a copy of the private contract. A practice that does not answer within 45 days leaves the MAC to pay the beneficiary at the nonparticipating rate. Keep the contracts where a request can find them.
Leaving early, and the cost of a broken opt-out
There are two ways out. To cancel before the automatic renewal, the practice sends written notice to every MAC at least 30 days before the current two-year period ends, which is the standard in 42 CFR 405.445(a). Miss that window and the opt-out renews for another two years.
A first-time opt-out has one more option. Within 90 days of the effective date, the practice can terminate the opt-out, but the termination carries conditions. The practice must notify every MAC where it filed, refund each privately contracted patient everything collected above the limiting charge as a physician or above the deductible and coinsurance as a practitioner, and tell those patients they may have claims filed for services already furnished. Once an opt-out has renewed, the 90-day route closes.
A broken opt-out is worse than staying in. Under 42 CFR 405.435, failing to maintain opt-out voids every private contract, nullifies the opt-out for the rest of the period, and requires the practice to submit claims to Medicare for covered services. It will not be paid on those claims, a physician returns to the limiting charge, and a practitioner may collect only deductible and coinsurance. The practice cannot opt out again until the current two-year period expires.
Opt-out status is published on the CMS Opt-Out Affidavits dataset. A move or a new MAC does not reset the dates, and a change of address is not grounds for early termination.
Medicare opt-out questions
No. It means the practice can treat them only under a private contract, and the patient pays out of pocket at the practice’s rate. The patient can still choose a provider who has not opted out and have Medicare pay. Emergency and urgent care are the one exception, and a beneficiary who needs that care cannot be asked to sign a contract.
Two years. For an affidavit signed on or after June 16, 2015, the opt-out renews automatically at the end of each two-year period, so no renewal form is filed. To stop the renewal, the practice must send written notice to every MAC where it filed at least 30 days before the period ends. Miss that window and the opt-out runs another two years.
No. CMS states that an opt-out provider cannot choose to leave Medicare for some beneficiaries and stay for others, or for some services and keep billing the rest. One affidavit commits the provider to the full two-year period for all Medicare-covered services. A practice that wants Medicare revenue for part of its work cannot split the difference this way.
42 CFR 405.415 sets the content. The contract must state that the patient accepts full responsibility for the charge, that Medicare limits do not apply, that neither party will submit a Medicare claim, that Medicare will not pay, that Medigap may not pay, and that the patient may seek care from providers who have not opted out. It also carries the opt-out dates and the practice’s exclusion status.
Yes, and it must. When a beneficiary who never signed a private contract needs emergency or urgent care, the practice submits a claim to Medicare on the patient’s behalf and may collect no more than the limiting charge as a physician, or the deductible and coinsurance as a practitioner. If the beneficiary had already signed a contract, the emergency services fall under that contract.
Part D prescribing continues, and an opt-out provider may order, certify, prescribe or refer as long as it is not paid for that work. A Medicare Advantage organization cannot pay for a covered service furnished by an opt-out provider, so the clinician leaves that network for those services. Commercial and Medicaid billing is unaffected, because the opt-out reaches Medicare alone.
The bottom line
Opting out of Medicare is a two-year contract decision, and it changes the practice’s billing rules on the day it takes effect. The affidavit sets the clock, the private contract sets the charge, and the emergency carve-out is the only place Medicare still pays. A practice that reads both documents before it files avoids the mistakes that void the whole arrangement.
Weighing a Medicare opt-out for your practice?
The MedFactor credentialing team reviews the provider types on staff, the affidavit and private contract templates, and the billing edits that keep a privately contracted encounter off a Medicare claim. Send your current Medicare mix and the clinicians you are considering, and we will show you what changes and what it costs.
Request a free opt-out readiness reviewThis article describes the federal opt-out rules in section 1802(b) of the Social Security Act and 42 CFR part 405, subpart D, and it is general information rather than legal advice, so confirm the current requirements with your MAC before filing.
