Medicare Opt-Out: Affidavit Process for Providers

TL;DR — Opting out removes you from Medicare entirely: you file an affidavit with your MAC, sign private contracts with every Medicare patient you keep seeing, and may charge any fee. Opt-out lasts 2 years and auto-renews unless you withdraw in a narrow window, and you can never retroactively bill Medicare for the opt-out period. If you only want claim-by-claim flexibility, non-participating status — not opt-out — is usually the right tool. Opting out of Medicare means a provider chooses not to participate in Medicare at all — they won’t accept Medicare payment for covered services, and they can charge patients any fee they choose. Opt-out is available to a limited set of provider types and involves a formal affidavit process.

This is a significant, binding commitment. Understand it fully before proceeding.

Who can opt out of Medicare

Not all providers can opt out. CMS limits opt-out to specific provider types:

Eligible to opt out:

• Physicians (MDs, DOs)
• Dentists
• Podiatrists
• Optometrists
• Chiropractors
• Physician assistants
• Nurse practitioners
• Clinical nurse specialists
• Certified registered nurse anesthetists
• Certified nurse-midwives
• Clinical social workers
• Clinical psychologists
• Physical therapists in independent practice
• Occupational therapists in independent practice
• Massage therapists (in limited circumstances)

Not eligible to opt out:

• Hospitals and institutional providers
• DMEPOS suppliers
• Clinical laboratories
• Home health agencies
• Most other facility types

What opt-out means in practice

When you opt out:

1. You cannot receive any Medicare payment for covered services — not from CMS, and not from the patient for reimbursement
2. You can charge patients any fee you choose — not limited by Medicare fee schedules
3. You must use private contracts with Medicare patients before providing services
4. The opt-out lasts 2 years — it automatically renews unless you affirmatively withdraw during the withdrawal period
5. Exceptions: You can still provide emergency or urgent care to Medicare patients without a private contract (for genuine emergencies only)
6. You can still order/refer Medicare services — opt-out doesn’t eliminate your ordering/referring status

Why providers opt out

Common reasons:

• Direct-pay/concierge medicine model — fee-for-service model with fees above Medicare rates
• Specialty practice with fees above Medicare — certain specialties where Medicare rates don’t cover overhead
• Low Medicare patient volume — administrative burden doesn’t justify the overhead
• Philosophical objection — some providers prefer to operate outside the Medicare system entirely
• Psychiatric/behavioral health — psychotherapy practices that have migrated to direct-pay models

The private contract requirement

Before providing any non-emergency Medicare-covered service to a Medicare patient, an opted-out provider must have a signed private contract with that patient. Requirements for the private contract:

1. Must be written
2. Must be signed by both the provider and the patient (or patient’s authorized representative)
3. Must inform the patient that:
   • The provider has opted out of Medicare
   • Medicare will not pay for services provided under this contract
   • The patient agrees to pay out-of-pocket
   • The patient understands they have the right to see a participating provider instead
4. Must specify the services covered
5. Must last at least 2 years (aligning with opt-out period)

Failing to obtain a valid private contract before providing services eliminates the opt-out protection for those services.

Step-by-step: Filing the opt-out affidavit

Step 1: Download the opt-out affidavit template CMS doesn’t have a standardized opt-out form. Each MAC may have their own template. Contact your MAC for their required affidavit format.

Step 2: Complete the affidavit The affidavit must include:

• Your name, NPI, and specialty
• Statement that you are opting out of Medicare
• The effective date (must be the date of filing or a prospective date)
• Acknowledgment that you understand the opt-out requirements
• Your signature, notarized (some MACs require notarization)

Step 3: File with your MAC(s) File with all MACs in jurisdictions where you practice. If you see patients in multiple states covered by different MACs, file with each MAC.

Step 4: Receive confirmation Your MAC will acknowledge receipt and confirm your opt-out effective date. Your opt-out will be reflected in CMS records.

Step 5: Prepare private contracts Have your attorney draft private contracts before your opt-out effective date. Every Medicare patient who wants to continue seeing you must sign one.

⚠️ Risk flags

⚠️ Two-year commitment — auto-renews. Opt-out automatically renews at the end of each 2-year period unless you file a timely withdrawal. The withdrawal window is narrow. If you want to return to Medicare participation, you must affirmatively act. Mark your calendar.

⚠️ Retroactive billing is prohibited. Once you’ve opted out, you cannot retroactively bill Medicare for services provided during your opt-out period — even if you later decide to re-enroll. The opt-out period is a permanent billing gap.

⚠️ Missing patient = missing contract = billing problem. Every Medicare patient you see during opt-out needs a signed private contract. A missed contract creates a compliance problem for that visit. Set up a process to identify all Medicare patients and obtain contracts before the opt-out effective date.

⚠️ Opt-out doesn’t affect existing reassignments. If you’ve reassigned your Medicare benefits to a group practice, the reassignment should be terminated before or concurrent with the opt-out affidavit. Otherwise you have a structural inconsistency in CMS records.

⚠️ Employed physicians: employer must agree. If you’re employed by a health system or group practice that bills Medicare, opting out may conflict with your employment terms. Get legal and contractual clarity before filing.

Returning to Medicare after opt-out

If you want to re-enroll in Medicare after a period of opt-out:

1. File a timely withdrawal of your opt-out affidavit (during the withdrawal window before auto-renewal)
2. OR let the 2-year period expire and file a new enrollment application
3. You’ll undergo full re-enrollment processing — treated as a new enrollment
4. Your previous enrollment history is considered but a new PTAN may be issued
5. You cannot backdate billing privileges to your opt-out termination date

Opting out vs. non-participating status

These are different and commonly confused:

If you don’t want to accept assignment on every claim but don’t want to leave Medicare entirely, non-participating status (don’t sign the CMS-460) is the right choice.

Related pages

• CMS-460 — Medicare Participating Agreement
• CMS-855I — Individual Provider Enrollment
• Medicare Revalidation

Have questions about whether opt-out makes sense for your practice? Ask Mae →