Filling the need for trusted information on national health issues…

Private Contracts Between Doctors and Medicare Patients: Key Questions and Implications of Proposed Policy Changes

Appendix Table 1: Less than 1% of physicians have “opted out” of Medicare, with psychiatrists making up the largest share
Specialty Number of physicians in patient care, 20151 Percent of  all physicians in patient care, 2015 Number of Medicare opt-out providers, 20162 Percent of Medicare opt-out providers, 2016 Percent of all opt-out providers, 2016
PHYSICIANS
Addiction Medicine NA 30 0.6%
Allergy/Immunology 4,019 0.5% 37 0.9% 0.7%
Anesthesiology 38,749 5.1% 14 0.0% 0.3%
Cardiovascular Disease/Cardiology 23,242 3.1% 31 0.1% 0.6%
Critical Care 8849 1.2% 4 0.0% 0.1%
Dermatology 11,062 1.5% 101 0.9% 1.9%
Emergency Medicine 36,607 4.8% 37 0.1% 0.7%
Endocrinology 5,682 0.7% 84 1.5% 1.5%
Family Medicine/General  Practice 103,235 13.6% 859 0.8% 15.8%
Gastroenterology 13,014 1.7% 20 0.2% 0.4%
General Surgery 22,043 2.9% 61 0.3% 1.1%
Geriatric Medicine 4,422 0.6% 20 0.5% 0.4%
Hand Surgery NA 8 0.1%
Hematology/Oncology 12,234 1.6% 12 0.1% 0.2%
Infectious Disease 6,548 0.9% 12 0.2% 0.2%
Internal Medicine 101,281 13.3% 537 0.5% 9.9%
Oral/Maxillofacial Surgery NA 87 1.6%
Nephrology 8,885 1.2% 5 0.1% 0.1%
Neurological Surgery 4,920 0.6% 32 0.7% 0.6%
Neurology 11,501 1.5% 60 0.5% 1.1%
Neuromusculoskel, Osteo Manip, Sports Medicine NA 127 2.3%
Obstetrics/Gynecology 38,690 5.1% 328 0.8% 6.0%
Ophthalmology 17,413 2.3% 38 0.2% 0.7%
Orthopedic Surgery 18,292 2.4% 121 0.7% 2.2%
Otolaryngology 8,894 1.2% 19 0.2% 0.3%
Pain Mgt/Interventional Pain Mgt 4,328 0.6% 65 1.5% 1.2%
Pathology 9,688 1.3% 5 0.1% 0.1%
Pediatric specialties 72,667 9.6% 304 0.4% 5.6%
Physical Medicine and Rehabilitation 8,352 1.1% 53 0.6% 1.0%
Plastic and Reconstructive Surgery 6,727 0.9% 113 1.7% 2.1%
Preventative Medicine 4,091 0.5% 45 1.1% 0.8%
Psychiatry, Geriatric Psychiatry, Neuropsychiatry 33,051 4.4% 2076 6.3% 38.1%
Pulmonary Disease 4,830 0.6% 15 0.3% 0.3%
Radiation Oncology 4,499 0.6% 1 0.0% 0.0%
Radiology, Nuclear Medicine 30,263 4.0% 26 0.1% 0.5%
Rheumatology 4,831 0.6% 20 0.4% 0.4%
Thoracic Surgery 4,153 0.5% 1 0.0% 0.0%
Urology 9,325 1.2% 24 0.3% 0.4%
Vascular Surgery 3,086 0.4% 5 0.2% 0.1%
Other* 59,948 7.9% 10 0.0% 0.2%
Total, all physician specialties 759,421 100% 5,447 0.7% 100%
OTHER PRACTITIONERS
Behavioral Health, Counseling, Social Work 3,257 27.9%
Optometry, Eye/Vision services 83 0.7%
Dentistry, dental-oral surgery, oral health 7,252 62.2%
Podiatry 37 0.3%
Other 1,037 8.9%
Total, Other Practitioners     11,666   100%
NOTES: Physician counts include active allopathic and osteopathic medicine physicians. NA (not available) indicates that the specialty category is not supplied in the applicable data source. *Physicians in specialties with fewer than 2,500 total physicians are not categorized by specialty in AAMC analysis of AMA data; included as “Other.”
SOURCES: Kaiser Family Foundation analysis of: 1Physician counts from Association of American Medical Colleges (AAMC) 2015 Physician Specialty Data Book, using American Medical Association (AMA) Physician Masterfile (December 2015); 2 CMS, Opt Out Affidavits https://data.cms.gov/dataset/Opt-Out-Affidavits/7yuw-754z/data (January 2016).
Appendix Table 2: Examples of Medicare reimbursement and beneficiary cost-sharing for a $500 service on Medicare’s fee-schedule
Provider’s arrangement with Medicare Payment arrangement Medicare’s usual reimbursement Beneficiaries’ usual liability* Total net payment to provider
Participating provider Assigned claim: Medicare pays its portion directly to provider; patient is liable for applicable cost-sharing 80% of fee-schedule amount
= 0.8 x $500
= $400
20% of fee-schedule amount
= 0.2 x $500
= $100
100% of fee-schedule amount
= $500
Non-participating provider Assigned claim: Medicare pays its portion directly to provider; patient is liable for applicable cost-sharing 80% of reduced (by 5%) fee-schedule amount
= 0.8 x (0.95 x $500)
= $380
20% of reduced (by 5%) fee-schedule amount
= 0.2 x (0.95 x $500)
= $95
Reduced (by 5%) fee-schedule amount
= 0.95 x $500
= $475
Unassigned claim: Patient pays provider’s full charge and seeks reimbursement from Medicare for its portion. On net, patient is liable for applicable cost-sharing PLUS the amount the provider charged above Medicare’s fee-schedule rate 80% of reduced (by 5%) fee-schedule amount
= 0.8 x (0.95 x $500)
= $380
20% of reduced (by 5%) fee-schedule amount plus balance-billed amount
= $95 + (≤ $71.25)
= up to $166.25
Up to 115% of reduced (by 5%) fee-schedule amount, known as the “limiting charge”
= up to 1.15 x (0.95 x $500)
= up to $546.25
Opt-out provider Private contract: Provider sets fee with Medicare patient; Medicare does not reimburse provider or patient for any portion of the service = $0 Unlimited Unlimited
NOTES: *These calculations are for traditional Medicare and assume that the beneficiary has already met the annual Medicare deductible. Beneficiaries with supplemental insurance may have coverage for out-of-pocket liabilities.
Issue Brief

The Henry J. Kaiser Family Foundation Headquarters: 2400 Sand Hill Road, Menlo Park, CA 94025 | Phone 650-854-9400
Washington Offices and Barbara Jordan Conference Center: 1330 G Street, NW, Washington, DC 20005 | Phone 202-347-5270

www.kff.org | Email Alerts: kff.org/email | facebook.com/KaiserFamilyFoundation | twitter.com/KaiserFamFound

Filling the need for trusted information on national health issues, the Kaiser Family Foundation is a nonprofit organization based in Menlo Park, California.