5 things to know about broadening private contracts between physicians, Medicare patients

Lawmakers have put forth legislation in recent years for providers to extend private contracts with their Medicare patients instead of accepting the program's standard fee-schedule amount as full payment for Medicare-covered services. These proposals could have implications on how much Medicare beneficiaries have to pay out-of-pocket for their healthcare, according to a Kaiser Family Foundation report.

Here are five things to know about broadening private contracts between physicians and Medicare patients and some possible implications.

1. Physicians and practitioners now have three options for charging traditional Medicare payments: register as a participating provider and agree to accept Medicare's standard fee as full payment for Medicare-covered services; register as a nonparticipating provider and choose on a service-by-service basis to charge Medicare beneficiaries higher fees up to 115 percent of a reduced standard fee; or register as an opt-out provider and privately contract with Medicare patients, receiving no reimbursement from Medicare.

2. Overall, less than 1 percent of physicians opt out of Medicare, while 96 percent participate in the program and 4 percent register as nonparticipating providers.

3. HHS Secretary nominee Rep. Tom Price, MD, Ga.-R, put forth H.R. 1650 to simplify physicians' attempts to enter private contracts with Medicare beneficiaries and charge higher fees than usually allowed under Medicare, similar to provisions included in broader proposals to repeal the ACA. According to the report, the proposals look to allow physicians to contract with Medicare patients on a patient-by-patient and service-by-service basis instead of entering into private contracts with all Medicare patients. In addition, the provisions would allow Medicare patients and physicians to seek Medicare reimbursement at the rate Medicare would normally pay for covered services.

4. While the policy changes could instate stronger financial incentives for physicians to treat Medicare patients, beneficiaries could be exposed to unlimited physician charges for Medicare-covered services exceeding what Medicare reimburses, according to KFF.

5. Additionally, KFF said broadening private contracting between physicians and Medicare patients could hinder patients' access to affordable services, especially for more uncommon services.  

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