Requirements of a Private Contract

40.8 - Requirements of a Private Contract (Rev. 222, Issued: 05-13-16, Effective: 08-15-16, Implementation; 08-15-16) A private contract under this section must: • Be in writing and in print sufficiently large to ensure that the beneficiary is able to read the contract; • Clearly state whether the physician/practitioner is excluded from Medicare under §§1128, 1156 or 1892 of the Act; • State that the beneficiary or the beneficiary’s legal representative accepts full responsibility for payment of the physician’s or practitioner’s charge for all services furnished by the physician/practitioner; • State that the beneficiary or the beneficiary’s legal representative understands that Medicare limits do not apply to what the physician/practitioner may charge for items or services furnished by the physician/practitioner; • State that the beneficiary or the beneficiary’s legal representative agrees not to submit a claim to Medicare or to ask the physician/practitioner to submit a claim to Medicare; • State that the beneficiary or the beneficiary’s legal representative understands that Medicare payment will not be made for any items or services furnished by the physician/practitioner that would have otherwise been covered by Medicare if there was no private contract and a proper Medicare claim had been submitted; • State that the beneficiary or the beneficiary’s legal representative enters into the contract with the knowledge that the beneficiary has the right to obtain Medicare-covered items and services from physicians and practitioners who have not opted out of Medicare, and that the beneficiary is not compelled to enter into private contracts that apply to other Medicare-covered services furnished by other physicians or practitioners who have not opted out; • State the expected or known effective date and the expected or known expiration date of the current 2-year opt-out period; • State that the beneficiary or the beneficiary’s legal representative understands that Medigap plans do not, and that other supplemental plans may elect not to, make payments for items and services not paid for by Medicare; • Be signed by the beneficiary or the beneficiary’s legal representative and by the physician/practitioner; • Not be entered into by the beneficiary or by the beneficiary’s legal representative during a time when the beneficiary requires emergency care services or urgent care services. (However, a physician/practitioner may furnish emergency or urgent care services to a Medicare beneficiary in accordance with §40.28); • Be provided (a photocopy is permissible) to the beneficiary or to the beneficiary’s legal representative before items or services are furnished to the beneficiary under the terms of the contract; • Be retained (original signatures of both parties required) by the physician/practitioner for the duration of the current 2-year opt-out period; • Be made available to CMS upon request; and • Be entered into for each 2-year opt-out period. In order for a private contract with a beneficiary to be effective, the physician/practitioner must be opted out of Medicare. The physician/practitioner’s initial 2-year opt-out period begins the date the affidavit meeting the requirements of §40.9 is signed, provided the affidavit is filed within 10 days after he or she signs his or her first private contract with a Medicare beneficiary. Once the physician/practitioner has opted out, such physician/practitioner must enter into a private contract with each Medicare beneficiary to whom the physician/practitioner furnishes covered services (even where Medicare payment would be on a capitated basis or where Medicare would pay an organization for the physician’s or practitioner’s services to the Medicare beneficiary), with the exception of a Medicare beneficiary needing emergency or urgent care. When a 2-year opt-out period ends, the physician/practitioner must enter into new private contracts with each beneficiary for the new 2-year period. The new private contracts must state the expected or known effective date and the expected or known expiration date of the current 2-year opt-out period. If a physician/practitioner has opted out of Medicare, the physician/practitioner must use a private contract for items and services that are, or may be, covered by Medicare (except for emergency or urgent care services (see §40.28)). An opt-out physician/practitioner is not required to use a private contract for an item or service that is definitely excluded from coverage by Medicare. A non-opt-out physician/practitioner, or other supplier, is required to submit a claim for any item or service that is, or may be, covered by Medicare. Where an item or service may be covered in some circumstances, but not in others, the physician/practitioner, or other supplier, may provide an Advance Beneficiary Notice to the beneficiary, which informs the beneficiary that Medicare may not pay for the item or service, and that if Medicare does not do so, the beneficiary is liable for the full charge. (See §§40, 40.24.)