Some Doctors Have Opted Out of Medicare Entirely. Sign Their Form, and the Whole Bill Is Legally Yours.

A 68-year-old on Original Medicare calls a well-reviewed psychiatrist, gets an appointment, and receives a two-page “private contract” before the first visit. Buried in the form is an acknowledgment that Medicare will not pay for the doctor’s services, no limiting charge applies, and the patient accepts full responsibility for the bill. The receptionist calls it a formality. It is not. Signing turns the appointment into a private cash-pay arrangement, with no Medicare reimbursement and no help from Medigap.

This is the opt-out physician trap, and it appears more often in certain specialties. Only 1.2% of non-pediatric physicians formally opted out of Medicare in 2024, so most beneficiaries will never encounter one. Among psychiatrists, however, the share reached 8.1%, followed by 4.5% of plastic and reconstructive surgeons and 3.2% of neurologists, according to KFF’s analysis of CMS data.

What Signing the Private Contract Actually Does

An opt-out physician is not the same as a doctor who is merely “non-participating.” A non-participating physician still operates inside Medicare. The doctor can choose whether to accept assignment on an individual claim and may charge more than the Medicare-approved amount, but the federal limiting charge generally caps the difference. An opt-out physician has left that payment system. The provider files an affidavit with Medicare and sees beneficiaries under written private contracts.

Signing that contract does three things simultaneously. Medicare pays nothing for the physician’s covered services. The limiting charge disappears, leaving the doctor and patient to agree on a price. Medigap does not pick up the balance because there is no Medicare-approved claim or coinsurance for the supplement to cover. The distinction can turn a familiar copay into a recurring cash expense.

A psychiatrist charging $400 per session creates a $1,600 monthly bill for weekly care. None of it counts toward the Part B deductible, and none of it qualifies for Medigap reimbursement. The patient may still have coverage for services ordered by the opt-out physician. If the psychiatrist refers the patient to a Medicare-participating laboratory or another enrolled provider for a medically necessary service, Medicare can cover that separate claim. The psychiatrist’s own services remain outside the program.

The Emergency Exception Is Narrower Than It Sounds

Medicare can pay an opt-out physician for emergency or urgent care provided to a beneficiary who has not signed a private contract with that doctor. In that situation, the physician submits a Medicare claim and becomes subject to ordinary payment rules for the emergency service.

The exception may disappear once a private contract already exists between the patient and physician during the current opt-out period. A scheduled follow-up after an emergency also returns to the private-contract rules.

What to Do Before the First Appointment

Three moves prevent the surprise.

1. Look up the provider in the CMS Provider Opt-Out Affidavits Lookup Tool. If the name appears, Medicare generally will not cover the provider’s scheduled services.
2. Ask the practice directly: “Do you accept Medicare assignment, are you non-participating, or have you opted out?” Those are three different billing relationships. “We see Medicare patients” does not answer the question.
3. Take the contract home before signing it. Ask for the fee for the initial evaluation, follow-up visits, missed appointments, prescription management, and phone calls. If the practice will not provide a written fee schedule, the uncertainty is part of the price.

Opt-out status generally runs in two-year periods and now renews automatically unless the provider takes steps to return to Medicare. A patient already paying cash can ask whether the psychiatrist intends to remain opted out, but should not count on the next renewal date as an escape hatch. The important document is not the bill that arrives after the appointment. It is the contract sent before it. Once signed, the patient has agreed that the Medicare card stays out of the transaction.

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