Remember those private contracts you signed with Medicare patients two years ago? Since those agreements had a duration of at most two years, they are about to expire, and it is time to discuss whether patients want to renew them.

After hearing from physicians and Medicare patients who wanted the option of paying for their medical care outside of that government program, Congress passed legislation that, beginning in 1998, allowed Medicare patients to enter into private contracting agreements with their physicians. The intent was to give patients the option of bypassing the Medicare system with its burdensome paperwork requirements and compromised confidentiality. It also permitted physicians for the first time to charge more than a certain percentage above Medicare’s allowable charge.

Federal regulations accompanying the new law permitted contracts for a maximum of only two years, however, so it’s time for psychiatrists to review their private contracting agreements to see whether the termination date is approaching and new contracts and affidavits will have to be prepared.

Two forms comprise the agreement—the contract with the patient and an affidavit from the physician. Physicians are required to file the affidavit with the Department of Health and Human Services and with the Medicare insurance carrier that processes claims in their region within 30 days after the opt-out period expires.

While APA supported the principle of a Medicare private-contracting option and many of the law’s specific provisions, it and other medical organizations registered strong opposition to the requirement that if a physician enters into a private contracting agreement with one Medicare beneficiary, that physician relinquishes the right to submit Medicare claims for any other patient during a two-year period that commences with the start date of the first private Medicare contract into which he or she enters. APA maintains that physicians should be able to decide to opt out of Medicare reimbursement eligibility on a case-by-case basis, which would allow more patients and physicians to take advantage of the option than is now the case.

The patient who signs such an agreement is still eligible for Medicare coverage for services provided by other physicians.

On the positive side, APA and other medical and consumer organizations applauded the government’s recognition that some patients would like the option of receiving their medical care without having that care create a trail of paper or electronic records, a growing concern in an era when privacy seems to be rapidly eroding. APA believed that patients seeking psychiatric care might find a private contracting option, with its increased level of confidentiality, particularly appealing.