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I opted out of Medicare in October 2009. In case you don’t know exactly what that means, let me explain. Opting out means that I am “out of network” for Medicare. I can no longer send in bills to Medicare for reimbursement and neither can my Medicare patients. In fact, I have to sign an affidavit stating that I won’t submit any bills to Medicare, and if I do, I can be penalized.

Opting out was not an easy decision. It was one that I wrestled with for a couple years. I didn’t want to let down those elderly patients

But why did I opt out in the first place? Let me explain. Back in 2008 and 2009, my expenses were very high, but my gross revenues were shrinking by the day. There were times when I didn’t pay myself at all in order to meet payroll for my staff and pay the mortgage on the office building. That’s not a good feeling – to work 50-60 hours a week, and receive no income, zero, nada, zilch. People mistakenly think that all doctors are rich. Well, I’ve got news for you – it just isn’t so. So, I had to take a hard look at my practice and what I was going to have to do to survive. The first thing I checked was my patient mix. I found that about 50% of my appointments were for patients with Medicare. In other words, half of my practice was made up of Medicare patients. And you will be shocked to learn that  Medicare accounted for only 17% of my income. Let me repeat those numbers. Medicare accounted for 50% of my patient volume and my time, but only 17% of my income. That was quite a revelation. And that’s a pretty pathetic ratio. I could see from a purely survival perspective, it wasn’t a tough decision. Many doctors wrestle with this, thinking that they could never survive without Medicare. But in the worst care scenario, I figured that if ALL of my Medicare patients left me, I would have 17% less income, but 50% more time on my hands.

But the revenue aspect wasn’t my only reason for leaving Medicare. Most people don’t realize this, but Medicare has over 132,000 pages of rules and regulations that must be obeyed under penalty of steep fines, and even jail time. Imagine that….I make an honest mistake, and under Medicare rules, I could end up serving jail time. What kind of system is that? It’s a miracle to me that so many doctors choose to participate in such a draconian system.

But the straw that broke the camel’s back for me was the institution of RACs (Recovery Audit Contracts). In order to look for fraud in the Medicare system, the Medicare administration has hired independent contractors to perform random audits on doctors’ office charts looking for evidence of fraud. On its face, this sounds like a good thing, right? After all, a doctor who is defrauding the Medicare system by charging for services that were never performed or intentionally overcharging for services that were performed only makes good sense, right? Right. But wait a minute. Here’s what is actually happening…. I read about a urologist that had 100 of his patient visits randomly audited. The auditors found no evidence of intentional fraud. But they felt that 20 of those patient visits were mistakenly overcharged, based only on the amount of documentation that they found in the patient’s chart. In other words, there wasn’t enough documentation in the chart to satisfy the auditors that the amount Medicare was charged for that visit was warranted. So what did they do? They extrapolated that 20 out of 100 visits to the entire year and made the assumption that 20% of the charges for that entire year must be in error, and the doctor therefore owed a refund of 20% of the money he was paid by Medicare for that year. That’s a LOT of money for a busy urologist. So he had to hire a lawyer and fight it in court. He ended up winning mostly, but he still had to pay a lawyer, and go through the hassle of fighting a faceless bureaucracy. But here’s the kicker to the whole thing…….guess how the auditors are paid? They are paid a percentage of the money they recover!!! In other words, the are highly incented to find whatever they can find, legitimate or not. In my mind, that stinks.

So, in the end, I opted out. And you know what? My practice did slow down some. I see fewer patients a day. But i can spend more time with them. And getting out of Medicare was like lifting a huge weight off of my shoulders. I could breath again. Freedom is sweet.

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