Medicare Opt-Out a Viable Physician Strategy

Greg Freeman, April 17, 2014

Two Pennsylvania physicians share their experiences decoupling from Medicare. They've lost 12% of their patient population, but say they're providing more personalized care and the effects on their revenue and financial viability have been positive.

This article appears in the April 2014 issue of Managed Care Contracting & Reimbursement Advisor.

It may come when you are in the office late trying to catch up on paperwork, or perhaps when you're looking over the reimbursement denials from CMS. Maybe it will hit you when you look at the approved claims and realize how little you make off of Medicare. Sooner or later, most physicians will wonder about the option of quitting Medicare altogether. Is it a crazy idea?

Opting out of Medicare can be a good solution to all the headaches and diminishing reimbursement, but the decision cannot be taken lightly, says Alexander Sapega, MD, a pediatric surgeon in Philadelphia who-along with his partner Michael Sidor, MD-opted out of Medicare 12 years ago. The two were among the first to opt out, making them some of the most knowledgeable physicians around when it comes to the prospect of a practice without Medicare.

Sapega's decision was prompted partly by a malpractice crisis in Pennsylvania that caused the practice's overhead to soar. Combined with Medicare cuts, the bottom-line numbers were adding up each month. The Medicare-approved global package reimbursement for a total hip replacement, for instance, had gone from $4,000 in 1983 to about $1,650 in 2000, Sapega notes.

He and Sidor had to decide whether to follow the Medicare strategy that was emerging for physicians in Philadelphia: the mass production track, in which physicians tried to make Medicare participation profitable by maximizing their case loads.


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