Medicare and DPC: Opting Out, Private Contracts and Your Options
You don't have to opt out of Medicare to run a direct primary care practice, but most DPC doctors do. Opting out means you file an affidavit with your Medicare contractor, sign a private contract with each Medicare patient before you treat them, and neither you nor the patient bills Medicare for that care for two years at a time, with automatic renewal. The alternatives are staying enrolled and charging only for services Medicare doesn't cover, or not seeing Medicare patients at all.
Everything below comes from CMS guidance, the Medicare contractor (MAC) pages that apply it, and the AAFP's practice guidance, checked in November 2026. Medicare rules are federal, so they apply in every state, but they're detailed and the penalties for getting them wrong are serious. Treat this as a map for your conversation with a healthcare attorney, not a substitute for one.
Your three options with Medicare
The AAFP describes the same three paths DPC doctors take, and each has a different trade-off for your panel and your paperwork.
| Option | Medicare patients | Billing Medicare | Main risk |
|---|---|---|---|
| Opt out | Yes, under private contracts | No, except emergency or urgent care | A 2-year commitment that renews on its own |
| Stay enrolled, charge only for non-covered services | Yes | Yes, for covered services | A membership fee that touches covered services |
| Don't see Medicare patients | No | No | Turning away patients who turn 65 |
There is also a fourth status that sometimes gets confused with opting out. An enrolled non-participating physician stays in Medicare, can accept assignment claim by claim, and must still submit claims for covered services. CMS sets the most a non-participating physician can charge on an unassigned claim (the "limiting charge") at 115% of the non-participating fee schedule amount, which itself is 95% of the participating amount. That is a way to bill Medicare differently, not a way to run a membership outside it.
Staying enrolled while charging a membership is the riskiest path. The AAFP warns that billing a Medicare patient for a covered service puts a provider at risk of civil and criminal penalties, and CMS says a physician who hasn't opted out must submit a claim for any item or service that is or may be covered by Medicare.
How opting out works
Opting out is personal. Noridian, a Medicare contractor, puts it plainly in its guidance that clinics, groups and other organizations cannot opt out. Each physician or eligible practitioner files their own affidavit, and a practice is effectively opted out when every clinician in it has done so.
The affidavit has to be in writing, signed, contain the statements CMS requires, and be filed with every Medicare contractor that would otherwise process your claims. Contractors such as Noridian link opt-out affidavit and private contract forms from their opt-out pages, so start with your own MAC's opt-out page.
When your opt-out starts
The timing depends on your status before you opt out, and this is the detail most likely to push back your launch.
- If you're not currently a participating physician (non-participating, or never enrolled), Noridian's guidance says the two-year period starts when you sign a valid affidavit, as long as it's filed within 10 days of signing your first private contract with a Medicare patient.
- If you're currently a participating physician, CMS guidance says the opt-out begins on the first day of the next calendar quarter, and only if your contractor receives the affidavit at least 30 days before that quarter starts. Miss the date and you wait another quarter.
If you're leaving employed medicine, you're likely enrolled as participating today, so build the quarter rule into your launch checklist.
The two-year period and automatic renewal
An opt-out lasts two years. CMS guidance says affidavits signed on or after June 16, 2015 renew automatically every two years. To stop a renewal, you notify every contractor you filed with, in writing, at least 30 days before the next two-year period begins.
Noridian adds practical detail for its regions. It usually mails a renewal notice about three months ahead. A cancellation that arrives fewer than 30 days before the end of the period leaves you opted out for another full cycle, and one that arrives more than 90 days early is returned to you. Canceling doesn't automatically re-enroll you in Medicare.
Private contracts with Medicare patients
Once you've opted out, you need a signed private contract with each Medicare beneficiary before you provide non-emergency care. Under the contract, the patient agrees not to seek Medicare payment for your services, and Medicare won't pay you or the patient for them. That applies to all of Medicare, including Medicare Advantage. CMS says Medicare Advantage plans may not pay, directly or indirectly, for basic services from a physician who has filed a valid opt-out affidavit.
CMS specifies the elements a private contract has to include, and your contractor's website or your attorney can give you compliant language. Use that language as written. The AAFP also points out that a patient's secondary coverage, such as a Medigap policy, may not pay for privately contracted care, which is worth explaining to patients plainly when they join.
Have new Medicare members sign the private contract alongside your regular membership agreement, and keep both in the chart. If a contract is missing, you can't fix it after the visit.
Emergency and urgent care
Opting out doesn't stop you from helping a Medicare patient in an emergency. You don't need a private contract to provide emergency or urgent care to a Medicare beneficiary who doesn't already have one with you. Under the federal regulation, urgent care means services furnished within 12 hours to avoid the likely onset of an emergency medical condition.
There are strings attached. For a beneficiary without a private contract, you submit the claim to Medicare on the patient's behalf and charge no more than the limiting charge. Noridian's guidance adds that you must be enrolled to bill Medicare for these services, so ask your contractor how that works for you. And you can't ask a patient to sign a private contract while they need emergency or urgent care, so the contract has to be in place before that moment.
Ordering labs, imaging and referrals
This is the question DPC founders ask most, because ordering is a big part of primary care. The answer is yes, opted-out physicians can order and refer, under CMS's conditions. CMS guidance says Medicare will pay for items and services ordered by an opted-out practitioner when that practitioner has an NPI, has a valid opt-out affidavit on file with the contractor, and is a specialty eligible to order and refer, and the service is furnished by someone who hasn't opted out.
You don't file the separate CMS-855O ordering and referring enrollment. CMS says an opted-out practitioner doesn't need it if the affidavit includes the necessary information, and Noridian notes that an opt-out affidavit and an active CMS-855O can't be in effect at the same time. Before you open, confirm with your contractor that your record shows you as eligible to order and refer, because a lab or imaging center will check before it bills Medicare for your patient.
How to decide
Start with your patients. If you expect members who are 65 or older, or who will age into Medicare, opting out lets you keep caring for them under the same model as everyone else, which is why the AAFP says most DPC doctors choose it. If you plan to keep a small insurance-billing side, or you're joining a group where colleagues bill Medicare, the decision gets more complicated, and an attorney should review it before you sign anything.
Whichever path you take, decide early. The affidavit timing can delay your first Medicare members by a full quarter, and your patient agreement, membership pricing and intake paperwork all depend on the answer. Your state's DPC law sits on top of these federal rules, which we cover in DPC laws by state.
Our take
Medicare opt-out sounds intimidating, but for most DPC founders it's a short list of steps done carefully. File the affidavit on time, use compliant private contracts for every Medicare member, know the emergency exception, and confirm your ordering status before opening day. Put the renewal date on your calendar two years out, and have a healthcare attorney review your setup once before you start.
The part most guides skip
Every tool in a DPC clinic is good at its own job, and none of them were built to talk to each other. A patient text turns into a refill in the chart, which needs a review, which needs a reply, and the follow-up lives in someone's head. That isn't anyone's fault. The tools just don't share a to-do list.
That's the job Tabflows does. Tabflows is a dedicated tech team for DPC clinics. We connect the tools you already chose and give your team one place for chat, tasks and patient context, with managed workflows for the repeat work like refills, lab follow-ups and onboarding. You keep every tool you picked.
Frequently asked questions
Do I have to opt out of Medicare to start a DPC practice?
No. You can opt out and see Medicare patients under private contracts, stay enrolled and charge members only for services Medicare doesn't cover, or not see Medicare patients at all. The AAFP notes that most DPC doctors opt out, and that staying enrolled while charging a membership carries real compliance risk if the fee touches covered services.
How long does a Medicare opt-out last?
Two years. According to CMS, opt-out affidavits signed on or after June 16, 2015 renew automatically every two years unless you cancel in writing at least 30 days before the next period starts.
Can I order labs and imaging for Medicare patients after opting out?
Yes, if you meet CMS's conditions. You need an NPI, a valid opt-out affidavit on file with your Medicare contractor and an eligible specialty, and then Medicare can pay the lab or imaging center that is enrolled. You don't file a separate CMS-855O ordering and referring enrollment.
Does opting out apply to Medicare Advantage patients too?
Yes. Opting out covers all of Medicare, including Medicare Advantage, and CMS says Medicare Advantage plans may not pay an opted-out physician for basic services except emergency or urgent care.
Can a whole clinic opt out of Medicare?
No. Only individual physicians and practitioners can opt out. A group effectively opts out when every clinician in it files their own affidavit.