Private contracts between Medicare patient and provider - does it allowed ?

Private Contracts Between Beneficiaries and Physicians/Practitioners

Section 1802 of the Act, as amended by §4507 of the BBA of 1997, permits a physician/practitioner to opt out of Medicare and enter into private contracts with Medicare beneficiaries if specific requirements of this instruction are met.


General Rules of Private Contracts





The following rules apply to physicians/practitioners who opt out of Medicare:

• A physician/practitioner may enter into one or more private contracts with Medicare beneficiaries for the purpose of furnishing items or services that would otherwise be covered by Medicare (provided the conditions in §40.1 are met).

• A physician/practitioner who enters into at least one private contract with a Medicare beneficiary (under the conditions of §40.1) and who submits one or more affidavits in accordance with §40.9, opts out of Medicare for a 2-year period unless the opt-out is terminated early according to §40.35 or unless the physician/practitioner fails to maintain opt-out. (See §40.11.) The physician’s or practitioner’s opt out may be renewed for subsequent 2-year periods.

• Both the private contracts described in the first paragraph of this section and the physician’s or practitioner’s opt out described in the second paragraph of this section are null and void if the physician/practitioner fails to properly opt out in accordance with the conditions of these instructions.

• Both the private contracts described in the first paragraph of this section and the physician’s or practitioner’s opt out described in the second paragraph of this section are null and void for the remainder of the opt-out period if the physician/practitioner fails to remain in compliance with the conditions of these instructions during the opt-out period.


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