Opt Out or Enroll? The Medicare Decision Counselors Keep Putting Off

Plenty of private-pay counselors assumed Medicare was something they could ignore. Before 2024 it was: counselors were not a Medicare provider type, so a Medicare beneficiary paying cash was just another self-pay client. That changed when Medicare began covering mental health counselor services on January 1, 2024. Counselors are now in the same position psychologists and clinical social workers have been in for years, and the rules that come with it are not optional.

Why can't I just keep charging my Medicare clients cash?

Because Medicare covers the service. Section 1848(g)(4)(A) of the Social Security Act requires practitioners to submit claims for covered services they furnish to Medicare beneficiaries, and to submit claims you must be enrolled. CMS's FAQ for MFTs and MHCs is direct about the alternative: practitioners who see Medicare beneficiaries but do not want to enroll and submit claims "are required to opt-out."

So the three lawful positions are:

1. Enroll and bill Medicare for covered services.
2. Opt out by filing an affidavit, then sign a private contract with each Medicare client.
3. Do not see Medicare beneficiaries for services Medicare covers. CMS says practitioners who will not see Medicare patients need neither enroll nor opt out.

What does enrolling commit you to?

You file a CMS-855I (walkthrough here), and once approved you bill Medicare for covered services. Payment for mental health counselor services is 75 percent of the clinical psychologist amount on the physician fee schedule, and that rate is set by law.

You also accept assignment. In 2023 CMS directed its contractors to add MFTs and MHCs to the list of practitioners who must accept mandatory assignment, and to convert unassigned claims to assigned ones. In practice that means you take the Medicare-allowed amount as full payment, collecting only the beneficiary's deductible and coinsurance. Physicians sometimes choose a non-participating status that lets them charge above the allowed amount; counselors should not plan on that. If you want to understand participation agreements in detail, ask your Medicare Administrative Contractor.

Enrollment brings ongoing duties: keeping your record current, revalidating every five years in general, and holding a license in each state where you see beneficiaries.

What does opting out commit you to?

Mental health counselors are on CMS's list of practitioner types eligible to opt out. To do it:

• File an opt-out affidavit with your MAC. There is no standard CMS form, though many MACs post a template. The affidavit must be in writing, signed by you, and identify you well enough that Medicare will not pay you during the opt-out.
• Enter a private contract with every Medicare beneficiary you treat for services Medicare would otherwise cover. The client agrees that neither of you will submit a claim and that they pay you directly. Get it signed before you provide services.
• Do not sign a private contract with a beneficiary who needs emergency or urgent care. CMS treats that situation separately.

The opt-out lasts two years and renews automatically every two years. To end it, you must send written notice to your MAC at least 30 days before the current period expires. If this is your first opt-out, you can also cancel early, but only within 90 days of its effective date.

The consequences people miss

Medicare Advantage and Medicaid. CMS's FAQ warns that some Medicare Advantage plans and state Medicaid agencies require Medicare enrollment before you can join their programs, and that opting out "could impact your participation." If you are in, or want to be in, a Medicare Advantage network or a Medicaid managed care plan, check with the plan before you opt out. This is the question behind the NBCC FAQ entry counselors keep asking about being "unpaneled."

Clients cannot use their Medicare benefit with you. Under a private contract the beneficiary pays your full fee and gets nothing back from Medicare. Some will accept that for continuity; some will leave.

It is easy to forget. The automatic renewal means an opt-out filed in 2024 rolls over every two years until you act. Calendar the cancellation deadline if you ever expect to enroll.

How should you decide?

A few honest heuristics:

• Enroll if referrals come from primary care, hospitals, senior living or hospice; if you work in a rural area where Medicare is a large share of the population; if you want to join Medicare Advantage networks; or if you join a group that bills Medicare.
• Opt out if you are fully private pay, you have a few existing clients who are aging into Medicare and want to stay with you at your fee, and you have no plan to join Medicare Advantage or Medicaid networks.
• Stay out entirely if you genuinely do not and will not treat Medicare beneficiaries for covered services. Then you need do nothing, but make sure that is true. A client turning 65 counts.

The fee comparison matters too. Look up the psychotherapy codes you bill in your locality on CMS's physician fee schedule lookup, take 75 percent of the psychologist amount, and compare it with your private-pay and commercial rates. For some counselors the gap settles it; for others the referral volume does.

A note for multistate counselors

Enrollment is per state. If you see Medicare clients in three states, you enroll three times and hold three licenses or compact privileges. An opt-out affidavit is filed with each MAC whose jurisdiction covers where you practice. See Medicare across state lines.

Medicare enrollment and opt-out filings are handled by our sister company, White Glove Credentialing. Licenses in the states where your Medicare clients are located are ours; see pricing.