Our clients are increasingly asking whether they can provide services to Medicare beneficiaries and avoid billing Medicare altogether. While the desire to simplify administrative burdens is understandable, federal law does not allow enrolled providers to treat Medicare patients and bypass Medicare billing (except under very specific circumstances). Whether you are employed by a hospital, operating a private practice, or splitting your time between multiple settings, here is what you need to know.

Medicare Participation Basics

Medicare classifies physicians and other eligible professionals in three ways:

1. Participating (PAR). Providers agree to accept Medicare’s approved amount as full payment and always accept assignment. Medicare pays the provider directly, and the patient is responsible only for coinsurance and any deductible.
2. Non-Participating (Non-PAR). Providers are enrolled in Medicare but may choose whether to accept assignment on a case-by-case basis. If they do not, they may bill the patient directly, but only up to a limited amount known as the “limiting charge.”
3. Opted Out. Providers who opt out of Medicare contract privately with each Medicare patient and agree not to bill Medicare for any services. Neither the provider nor the patient may submit claims to Medicare. Opting out applies across all settings and lasts for two years.

The Mandatory Claim Submission Rule

Federal law (42 U.S.C. § 1395u(b)(3)(B)) requires that any provider who is enrolled in Medicare (both participating or non-participating) must submit a claim to Medicare for any covered service furnished to a beneficiary. Providers may not simply give the patient a bill and ask them to submit it to Medicare. This rule is designed to protect patients from excessive charges and ensure consistent reimbursement rules are followed.

The only lawful exception to this rule is when the provider has formally opted out of Medicare.

How Non-Participation Works

If you are non-participating and do not accept assignment:

• You may choose whether or not to accept assignment for each service.
• If you do not accept assignment, you may bill the patient directly up to 115% of the Medicare-approved amount (known as the “limiting charge”).
• Medicare will reimburse the patient directly for the Medicare-approved portion.
• You are still legally required to submit the claim to Medicare, even if the patient is paying you directly.

A non-participating provider may choose to accept assignment on a claim-by-claim basis, which means agreeing to accept Medicare’s approved amount (at a slightly reduced rate) as full payment for that service. When assignment is accepted, Medicare pays the provider directly, and the provider may not bill the patient more than the standard 20 percent coinsurance and any applicable deductible. Although the payment rate is slightly lower than for participating providers (95 percent of the Medicare fee schedule), accepting assignment allows for faster payment and eliminates the need for the patient to seek reimbursement. However, once a physician accepts assignment on a claim, the physician cannot charge above the approved amount or later switch the payment arrangement for that service.

Non-participation may offer some flexibility, but it does not eliminate the obligation to engage with Medicare.

What If You Do Not Want to Bill Medicare at All?

If your goal is to avoid all Medicare billing and treat Medicare patients on a cash-pay basis, you must formally opt out of Medicare. This requires:

• Submitting a written opt-out affidavit to your Medicare Administrative Contractor (MAC).
• Entering into a private contract with each Medicare patient before services are rendered.
• Acknowledging that neither you nor the patient will submit any claims to Medicare.

Once you opt out, this status applies for two years and applies universally. To be clear: you cannot be opted out in one job and opted in at another. For example, a physician cannot opt out in their private practice while continuing to bill Medicare under a hospital employer. The opt-out status follows the physician’s NPI and overrides the Medicare participation status of any group or entity they work with.

Working in Multiple Roles or Entities

Many physicians work in different roles, such as hospital employment, locum tenens coverage, and private practice ownership. Medicare participation is tied to the billing entity’s Tax ID, not the individual physician. This means:

• If you work for a hospital that participates in Medicare, your services will be billed as participating, even if you personally prefer non-par status.
• Separately, you can bill under a different Tax ID (such as your own practice) with a different participation status.

But again, if you have opted out of Medicare, that status applies to all services you provide, regardless of which organization bills on your behalf. It is not selective or employer-specific.

Opt-Out Rules for Nurse Practitioners and Physician Assistants

Nurse practitioners (NPs) and physician assistants (PAs) are permitted to opt out of Medicare, but only if they are authorized under state law to furnish and bill for services independently. Like physicians, opted-out NPs and PAs must submit a formal opt-out affidavit and enter into private contracts with each Medicare patient. The opt-out applies across all settings and lasts for two years. However, if a state requires physician supervision for the services in question, or if the services are billed “incident to” a supervising physician, the opt-out option may not be applicable. NPs and PAs should ensure that their employment structure and scope of practice support independent Medicare billing before proceeding with an opt-out.

What About Other Non-Physician Providers?

Certain healthcare professionals are not allowed to opt out of Medicare. This includes: Physical therapists, Occupational therapists, Speech-language pathologists, and Chiropractors. These providers are required to submit claims for covered services and may not enter into private pay arrangements that bypass Medicare rules. Chiropractors are particularly limited because Medicare only covers manual manipulation of the spine — and even for this limited scope, chiropractors must bill Medicare directly and cannot opt out. Any attempt to sidestep this requirement can trigger serious regulatory consequences, including repayment demands, audits, and exclusion from Medicare programs.

There is no legal way for an enrolled provider to avoid Medicare billing for covered services while still treating Medicare beneficiaries — unless you formally opt out of Medicare and follow all related rules. Opting out must be done uniformly and applies to all your professional activities. Non-participation allows some flexibility, but still carries mandatory billing requirements and strict limits on what you can charge.

If you are unsure of your Medicare status or want to explore compliant ways to simplify your practice structure, our firm can help. We work with physicians and healthcare professionals across the country to navigate Medicare compliance, opt-out processes, and multi-entity business models.