Medicare: PAR vs. Non-PAR

On September 19, 2012, in Medicare, by MoneyTree

Q. Is it possible to opt out of Medicare, and if so, how do I go about doing so?

A. Time and again we’ll hear DC’s comment about their frustration with the Medicare system.  Many threaten to “opt out” (’cause you know, that will really show ‘em!).  Sorry Doc, as a chiropractor you can’t opt out of Medicare.

DC’s have a “special” status in the Medicare system; you are neither full-fledged physicians (like MD’s), yet are more than practitioners (like PT’s).  To quote the Medicare Benefit Policy Manual:

“The opt out law does not define “physician” to include chiropractors; therefore, they may not opt out of Medicare and provide services under private contract.” (Ch 15, Section 40.4). 

Let us translate in simpler terms: you cannot leave Medicare and still see Medicare patients.  What you can do is change your provider status from Par (Participating) to Non-Par (Non-Participating).  You have only one chance a year to make that change and that time is coming up quickly; now’s the time to do your research, make a decision about your PAR vs. NON-PAR status, and prepare to make the change.

Medicare allows DC’s to change provider status the last 6 weeks of every year (Nov. 15-Dec. 31).  If you are contemplating a switch to Non-Par status, make a note of this on your calendar because if you miss it, you’ll have to wait until next year.  Update: Based on the new January 2013 legislation (Section 601 – Medicare Physician Payment Update), CMS is extending the 2013 annual participation enrollment period from December 31, 2012 to February 15, 2013. Participation elections and withdrawals must be post-marked on and before February 15, 2013.

Once made, the decision is binding throughout the following calendar year (unless the decision period is re-opened). Another exception could be in situations where a DC’s practice changes significantly, such as relocation to a different geographic area or transformation into a group practice.

What exactly is the difference between Par and Non-Par status?  Well, contrary to what you might think, changing your status to Non-Par does not affect the Medicare rules, does not provide you any audit protection and does not allow you to bypass Medicare’s fee schedule.

So what’s the point then?  Par providers are paid 5% more than Non-Par by Medicare for the chiropractic adjustment.  Non-Par providers can collect more from their patients (115% of the allowable amount) and can collect upfront from their patients if they do not accept assignment (payment from Medicare).   So, to be Par or Non-Par is really an issue of cash flow (how you collect your fees).  Do you prefer to wait and receive the extra 5% reimbursement or do you wish to collect up front?

Before you make your decision you’ll want to understand that…

  • Being non-par does not mean you don’t have to bill Medicare. All Medicare covered services must be billed to Medicare, or the provider could face penalties.
  • A non-par provider is actually a provider involved in the Medicare program who has enrolled to be a Medicare provider but chooses to receive payment in a different method and amount than Medicare providers classified as participating. The non-par provider may receive reimbursement for rendered services directly from their Medicare patients. They submit a bill to Medicare so the beneficiary may be reimbursed for the portion of the charges for which Medicare is responsible.
  • It is important to note that non-par providers may choose to accept assignment, therefore, the amount paid by the beneficiary must be reported in Item 29 of the CMS 1500 claim form. This ensures that the beneficiary is reimbursed (if applicable) prior to Medicare sending payment to the provider.
  • Whether or not a non-par provider chooses to accept assignment on all claims or on a claim-by-claim basis, their Medicare reimbursement is five percent less than a participating provider, as reflected in the annual Medicare Physician Fee Schedule.

If you are currently Non-Par and wish to become Par, you must sign a participation agreement. If you are currently a Par provider and wish to become Non-Par, you will need to submit a letter (on office letterhead) to your local carrier or administrative contractor stating your intent to become non-participating. This letter must include an original signature of the authorized representative or individual provider. If you wish your status to remain unchanged, you need not do anything.

Additional information is available in the Medicare Benefit Policy Manual (Chapter 15; Covered Medical and Other Health Services) and the Medicare Claims Processing Manual (Chapter 12; Physician/Nonphysician Practitioners).

Click here to find a copy of the Medicare Participating Provider Agreement. The form contains important information regarding the participation process and the annual opportunity you have to make or change your participation decision.

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