A provision in the Social Security Act permits Medicare beneficiaries and physicians to contract privately outside of the Medicare program. Under the law as it existed prior to January 1, 1998, a physician was not permitted to charge a patient more than a certain percentage in excess of the Medicare fee schedule amount. A new provision, which became effective on January 1, 1998, under which the patient may agree to pay the physician more than that which would be paid under the Medicare program.
A “private contract” is a contract between a Medicare beneficiary and a medical practice that has opted out of medicare for two years for all covered items and services it furnishes to medicare beneficiaries. In a private contract, the Medicare beneficiary agrees to give up Medicare payment for services furnished by the physicians/practitioners and to pay the physicians/practitioners without regard to any limits that would otherwise apply to what the physicians/practitioners could charge.
The purpose of this contract is to permit the Patient (who is otherwise a Medicare beneficiary) and the Physicians to take advantage of this provision in the Medicare law and sets forth the rights and obligations of each. This agreement is limited to the financial arrangement between Physician and Patient and is not intended to obligate either party to a specific course or duration of treatment.
Patients and physicians who take advantage of this provision are not permitted to submit claims or to expect payment for those services which includes prescriptions, tests, or therapies from Medicare.
II Physician Obligations
The physicians acknowledge that they are not excluded from Medicare under section 1128, 1156, 1892 or any other section of the Social Security Act.
The physicians/practitioners acknowledge that this contract shall not be entered into with the Patient, or the Patient's legal representative, during a time when the patient requires emergency care services or urgent care services, except that the Physicians/Practitioners may furnish emergency or urgent care services to a Medicare beneficiary in accordance with 42 C.F.R. 405.440.
The Physicians/Practitioners acknowledge that they must retain this contract (with original signatures of bother parties to this contract) for the duration of the opt-out period, and that it shall be made available to the Centers for Medicare and Medicaid Services (CMS) upon request.
The Physicians/Practitioners shall provide a copy of this contract to the Patient, or to his or her legal representative, before items or services have been furnished to the Patient under the terms of this contract.
The Physicians/Practitioners acknowledge that they must enter into a contract for each opt-out period.
III. Patient Obligations
The patient, or his or her legal representative, accepts full responsibility for payment of the Physicians/Practitioners' charges for all services furnished by the Physicians/Practitioners.
The Patient, or his or her legal representative, understands that no payment will be provided by Medicare for items or services furnished by the Physicians/Practitioners that would have otherwise been covered by Medicare if there was no private contract and a proper Medicare claim had been submitted.
The Patient, or his or her legal representative, understands that Medicare limits do not apply to what the Physicians/Practitioners may charge for items or services furnished by the Physicians/Practitioners.
The Patient, his or her legal representative, agrees not to submit a claim, nor ask the Physicians/Practitioners to submit a claim, to Medicare for Medicare items or services, even if such items or services are otherwise covered by Medicare. This includes tests and prescriptions or devices.
The Patient, his or her legal representative, has entered into this contract with the knowledge that he or she has the right to obtain Medicare-covered items and services from Physicians and practitioners who have not opted-out of Medicare and for whom payment would be made by Medicare for their covered services, and that the Patient has not been compelled to enter into private contracts that apply to other Medicare-covered services furnished by other Physicians or practitioners who have not opted-out.
The Patient, or his or her legal representative, understand that Medigap plans do not, and other supplemental plans may elect not to, make payments for items and services not paid for by Medicare.
The Patient, or his or her legal representative, understand that this agreement shall not be entered into with the Physicians/Practitioners during a time when the Patient requires emergency care services or urgent care services, except that the Physicians/Practitioners may furnish emergency or urgent care services to a Medicare beneficiary in accordance with 42 C.F.R. 405.440.
IV. Term and Termination
This agreement shall become effective on the date first written above and shall continue in effect for three years from the signature date. Despite the term of the agreement, either party may choose to terminate treatment with reasonable notice to the other party. Notwithstanding this right to terminate treatment, both the Physician and Patient or his/her legal representative agree that the obligation not to pursue Medicare reimbursement for items and services provided under this contract shall survive this contract.