Nancy Ochieng, Karyn Schwartz Follow @KarynLSchwartz on
Twitter, and Tricia Neuman Follow @tricia_neuman on Twitter Published: Oct 22, 2020
As U.S health care spending continues to
grow faster than the economy, several health care reform proposals
would leverage Medicare’s payment structure in order to help control health
care costs while also improving consumers’ access to health coverage. Notably,
Democratic presidential nominee Joe Biden has proposed a
“public option” that would allow eligible individuals to choose
between private insurance or a publicly sponsored plan, similar to Medicare.
While Biden has not specified how much health care providers would get paid
under the public option, a campaign document says it would be administered by
Medicare. His proposal would also lower the age of Medicare eligibility to 60,
giving older adults the option to choose coverage under Medicare.
Amidst the debate on health care reform, some have expressed concerns that an approach that adopts
Medicare payment rates, or a multiplier of Medicare rates, would jeopardize
providers’ financial viability, leading physicians to “opt out” of the Medicare
program, potentially leading to a shortage of physicians willing to treat
Medicare beneficiaries and compromising patients’ access to care. This issue
takes on even greater importance during the coronavirus pandemic, with COVID-19
deaths surpassing 200,000, including a disproportionate share of older adults.
This analysis examines the extent to which
non-pediatric physicians are opting out of Medicare, by specialty, and by
state, based on data published by the Centers for Medicare & Medicaid
Services (CMS) as of September 2020. For the total number of active
state-licensed physicians, we use data from Redi-Data, Inc.
Key Takeaways
·
One percent of all
non-pediatric physicians have formally opted-out of the Medicare program in
2020, with the share varying by specialty, and highest for psychiatrists
(7.2%).
·
Psychiatrists account
for the largest share (42%) of all non-pediatric physicians who have opted out
of Medicare in 2020.
·
In all states except
for 3 [Alaska, Colorado, Wyoming], less than 2% of physicians in each state
have opted-out of the Medicare program.
Background
Currently, physicians and other health care
providers may register with traditional Medicare under three options: 1)
participating provider, 2) non-participating provider, or 3) an opt-out provider.
·
Participating Providers: Under this option, participating providers agree to accept
“assignment” on all Medicare claims for all their Medicare patients, which means
that they have signed a participation agreement with Medicare, agreeing to
accept Medicare’s fee schedule amounts as payment-in-full for all Medicare
covered services. Medicare beneficiaries seeing a participating provider can
only be liable for the cost sharing required by Medicare. Providers have several incentives to be participating providers, such as
being paid higher rates (5% higher) than the rates paid to non-participating
providers. The vast majority (97%) of physicians and practitioners
billing Medicare are participating providers.
·
Non-participating providers: Providers in this category accept Medicare patients, but can
choose whether to take assignment (i.e., Medicare’s approved amount) on a
claim-by-claim basis. Unlike participating providers, who are paid the full
Medicare allowed payment amount, nonparticipating physicians who take
assignment are limited to 95% of the Medicare approved amount. In 2018, 99.6% of fee schedule claims by non-participating
providers were paid on assignment. Physicians who choose to not accept
assignment can charge beneficiaries more than the Medicare-approved amount, but
not exceeding 15% of the fee-schedule allowed amount. Medicare patients are
financially liable for this additional amount (“balance bill”), plus applicable
deductibles and coinsurance amounts.
·
Opt-out providers: Physicians and practitioners under this option have signed an
affidavit to “opt-out” of the Medicare program entirely. Instead, these
providers enter into private contracts with their Medicare patients, allowing
them to bill their Medicare patients any amount they determine is appropriate.1 Of
note, providers who have opted-out of the Medicare program must opt-out
for all of
their Medicare patients. Medicare patients seeing a provider who has opted out
of the Medicare program must sign this agreement and agree to be financially
responsible for the entire cost of any services received. Neither the provider
nor the patient can submit a bill to Medicare for reimbursement. Past analyses have found that few (less than 1%)
physicians have chosen to opt-out of Medicare.
The Medicare Access and CHIP Reauthorization
Act of 2015 (MACRA) (Pub. L.114-10) made it easier for physicians and
practitioners to opt-out of the Medicare program by lifting the requirement
that physicians file opt-out affidavits every 2 years to renew their status.
Prior to changes in law made in 2015, physicians and practitioners were
required to opt-out of Medicare for all of their Medicare patients for a 2-year
period and were also required to file a new affidavit to renew their opt-out.
Past proposals, including a 2019 executive order issued by President Trump, have called
for policy changes that would make it easier for physicians and other
practitioners to enter into private contracts with their Medicare patients and
therefore bill patients higher fees than the Medicare allowed amount.
With health care reform proposals—including a
“public option” supported by Vice President Biden—potentially on the agenda
after the 2020 presidential election, this brief examines the share of
non-pediatric physicians opting out of Medicare, by specialty and state in
2020.
Key Findings
Only 1 percent of non-pediatric
physicians have formally opted-out of the Medicare program. As of September 2020, 9,541 non-pediatric
physicians have opted out of Medicare, representing a very small share (1.0
percent) of the total number active physicians, similar to the share reported in 2013.
Figure 1: Few Physicians Have Formally
Opted-Out of Medicare in 2020
While the overall opt-out rate
is 1 percent, opt-out rates are somewhat higher for certain specialties, such
as psychiatry and plastic and reconstructive surgery. In 2020, 7.2 percent of psychiatrists opted
out of Medicare, followed by 3.6% of physicians specializing in plastic and
reconstructive surgery and 2.8 percent of physicians specializing in neurology
(Figure 2).
Psychiatrists are disproportionately represented among the 1.0 percent of
active physicians who have opted out of Medicare. As of September 2020, psychiatrists
account for the largest share (42%) of opt-out physicians, followed by
physicians in family medicine (19%), internal medicine (12%), and
obstetrics/gynecology (7%) (Figure 3).
Figure 3: Among all physicians opting-out of
Medicare in 2020, psychiatrists account for the largest share of opt-out
providers
In addition to physicians, another 4,075
select clinical professionals with doctorate degrees (i.e., chiropractors, oral
surgeons, podiatrists, and optometrists) have also opted-out of the Medicare
program, with oral surgeons accounting for the vast majority (95%) of this
group (Table 1).
In 47 states, less than 2
percent of active non-pediatric physicians in each state have opted out of
Medicare. As of September 2020,
Alaska (3.3%), Colorado (2.1%), and Wyoming (2.0%) have the highest rates of
non-pediatric physicians who have opted out of Medicare (Table 2). Nine states
(Iowa, Michigan, Minnesota, Nebraska, North Dakota, Ohio, South Dakota, West
Virginia and Wisconsin) have less than 0.5% of non-pediatric physicians opting
out of Medicare.
Discussion
Our analysis shows that relatively few
physicians are opting-out of Medicare, similar to prior analyses. Notably, we find that psychiatrists have the
highest opt-out rates and are disproportionately represented among physicians
who have opted out of Medicare in 2020. This is consistent with previous analyses that found that psychiatrists are less
likely than other physician specialties to accept new patients with Medicare or
private insurance, suggesting that psychiatrists may prefer to be paid directly
from patients rather than insurers, to avoid the administrative burden and have
the flexibility to charge higher fees. The relatively high rates of psychiatrists
opting of Medicare is a particularly salient concern for older adults during
the COVID-19 pandemic and resulting economic recession, with one in four older adults reporting
symptoms of anxiety or depressive disorder.
Our analysis also finds little state-level
variation in the percent of physicians opting-out, with only 3 states (Alaska,
Colorado, Wyoming) having opt-out rates at or above 2.0% in 2020. Further
research is needed to examine the extent to which opt out rates may be higher
or lower in certain geographic areas, and whether there is an association
between opt-out rates and physician and practice-level characteristics,
and community characteristics.
While our analysis finds that the vast
majority of non-pediatric physicians have not “opted-out” of Medicare, past analyses have reported that some physicians are not
accepting any new patients,
including patients with Medicare and private insurance (i.e., closed
practices). Past analysis found that 21% of non-pediatric primary
care physicians accept Medicare but are not taking any new Medicare patients, as compared to 14% who are
not taking new patients with
commercial insurance. Further, according to a recent analysis by MedPAC, Medicare beneficiaries have stable
access to care, with the majority reporting having a usual source of care (92%
of beneficiaries) and having no trouble finding a new primary care physician
(72% of beneficiaries) or specialist (85% of beneficiaries).
With health care reform potentially on the
agenda if Biden wins the 2020 presidential election, including proposals that
would adopt elements of Medicare in a public option or lower the age of
Medicare eligibility, some critics have argued that these proposals would lead
to more physicians opting out of Medicare, creating barriers to care for people
with Medicare. Our analysis finds that despite changes in law that have made it
easier for physicians and practitioners to opt-out of the Medicare program, few
physicians are doing so. If a public option moves forward, and if current
opt-out rules apply to both Medicare and the public option, physicians may be
even less likely to opt out to retain their patients and revenue. At the
same time, if the public option adopts rates linked to Medicare, there is some
risk that the number of physicians opting out would increase, although they
would have fewer patients available to charge higher prices. The details of a
public option – including provider payment rates and how closely tied provider
participation is to Medicare – could have big implications for how many
physicians participate as well as the potential savings.
This work was supported in part by Arnold
Ventures. We value our funders. KFF maintains full editorial control over all
of its policy analysis, polling, and journalism activities.
|
Methods |
|
This analysis
uses Medicare opt-out affidavit data from the Centers for Medicare &
Medicaid Services (CMS), as of September 2020 ( https://data.cms.gov/Medicare-Enrollment/Opt-Out-Affidavits/7yuw-754z).
The scope of our analysis was limited to non-pediatric physicians, given its
Medicare focus, as well as a select group of other clinicians with
doctorates: chiropractors, optometrists, oral surgery, and podiatrists.
Therefore, pediatricians and other non-physician specialists, such as
certified nurse midwives, clinical social workers, and physician assistants,
were excluded from the total number of opt-out physicians. Of note, while
some clinicians under the oral surgery specialty group may also hold a
medical degree (MD or DO), for the purpose of our analysis, we grouped these
physicians in accordance with the primary specialty (oral surgery) associated
with their National Provider Identifier (NPI) in CMS’ opt-out file. We obtained data on the number of active
allopathic and osteopathic physicians by specialty and state from Redi-data,
Inc, which utilizes data from the American Medical Association (AMA)
Physician Masterfile. One limitation of this analysis is that due to data
source limitations, we were unable to exclude active physicians in
professional activity other than patient care, such as research and
administration. The specific physician specialty groups
identified in this analysis were selected if they were included in the list
of opt-out providers provided by CMS. In order to gain a more complete
picture of the distribution of opt-out providers in each specialty category, we
grouped some subspecialties under a broader specialty category, consistent
with the specialty cross-walk provided by Redi-Data, Inc. Specifically, anesthesiology includes pain
management as a subspecialty, obstetrics/gynecology includes reproductive
endocrinology, and preventive medicine includes occupational medicine. The
specialty group of internal medicine includes the following subspecialties:
internal medicine (not otherwise specified), critical care medicine,
gastroenterology, hematology, hospice & palliative medicine, infectious
disease, nephrology, pulmonary disease, and rheumatology. The “surgery”
specialty consists of the following surgical subspecialties: cardiac
surgery, colorectal surgery, general surgery, hand surgery, thoracic surgery,
and vascular surgery. The following subspecialties are included in the
“other” specialty: addiction medicine, cosmetic surgery anesthetic
medicine, Doctor of Medicine, hospitalist, integrative medicine, undefined
physicians, sleep medicine, osteopathic manipulative medicine. |
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