If Your Doctor Opts Out of Medicare

Q. My husband’s doctor opted out of Medicare and now charges a high set fee for the year, which covers all his office services. My husband says that, even so, Medicare and his Medigap supplement will still cover hospital care, specialists, or outpatient tests should he need them. Is this true?

A. Yes, your husband is correct. In paying a fixed fee for his primary care, he has made a private contract with this doctor. Because the doctor has opted out of the program, Medicare will not pay for any services this doctor provides. Since Medigap supplemental insurance pays only for Medicare-covered services—which this is not—it won’t cover any of his out-of-pocket costs incurred with this doctor.

However, if your husband goes to any other provider—whether a physician, hospital, testing lab, or supplier of medical equipment—that does accept Medicare, he will receive the appropriate Medicare coverage. Also, his Medigap insurance will pick up the tab for the remaining costs, such as copays, according to the terms of his policy.

In this instance, a Medicare beneficiary made a definite decision, fully aware of the consequences. Other people, though, have often found themselves stuck with large bills because they assumed that Medicare automatically covers services from any provider—or that they can simply submit claims to Medicare themselves and have their costs reimbursed if the provider does not accept Medicare. This is not the case.

Bottom line: To avoid nasty billing surprises, make sure you find out in advance whether providers accept Medicare. They have an obligation to tell you. Even if they do accept Medicare, it’s wise to ask whether or not they take Medicare payment “on assignment” because this also makes a difference to your out-of-pocket expenses. For a more detailed explanation of these different billing situations, see this previous article.

Patricia Barry is a senior editor with the AARP Bulletin.