Medicare private contract template: What it must include and how to file

Key takeaways

A Medicare private contract is a written agreement in which a beneficiary agrees to pay an opted-out provider directly and file no Medicare claim.

42 CFR 405.415 sets 15 requirements for the contract, lettered (a) through (o), covering wording, delivery, and record retention.

File your opt-out affidavit with your MAC within 10 days of signing your first private contract, or your opt-out start date slips.

Opt-out affidavits signed on or after June 16, 2015 extend automatically, but a fresh contract is required for each two-year period.

The comparison table below shows how opt-out, non-participating, and participating status differ on billing, Medigap, and duration.

A Medicare private contract is the written agreement that lets a provider who has opted out of Medicare charge a beneficiary directly. Federal rules make it the only lawful route to private-pay care for a service Medicare would otherwise cover. Without a signed one on file, the visit falls back under standard Medicare rules.

Medicare private contracting runs on two separate documents. The contract is signed with each patient and stays in your own records. The opt-out affidavit is filed with your Medicare Administrative Contractor, known as your MAC, and is what establishes your status.

This guide covers the 15 requirements in 42 CFR 405.415, the 10-day deadline on your affidavit, and how opt-out compares with non-participating status. The template above is built to those requirements.

What is a Medicare private contract?

A Medicare private contract is a written agreement between an opted-out provider and a Medicare beneficiary. The patient agrees to pay you directly and to file no Medicare claim for that care. It is signed once per beneficiary, before treatment, and covers every service you furnish them during the opt-out period.

You never sign a contract with Medicare itself. The agreement runs between you and each individual beneficiary, and CMS never sees it unless it asks to.

It is also a different document from the Medicare waiver, better known as the Advance Beneficiary Notice. That form is used by providers who are still in Medicare, for one service they expect Medicare to deny. A private contract covers all of your care, for the whole opt-out period.

Opting out and contracting privately are two separate steps. A Medicare opt-out private contract signed before your affidavit reaches the MAC does not take effect until that affidavit is filed. Anything you furnish in the meantime is judged under standard Medicare rules.

The contract has to be signed before you furnish the service, and it cannot be backdated. It also cannot be signed while the patient needs emergency or urgent care. In those situations you may treat the beneficiary and bill Medicare under 42 CFR 405.440 instead.

Any sample Medicare opt-out private contract circulating online is worth checking against 405.415 line by line. The Medicare private contract PDF above follows that section clause for clause, so you can fill it in and sign it as it stands.

How to complete the contract and file your opt-out affidavit

Sign the contract with your patient first, then file your opt-out affidavit with your MAC within 10 days of that first signature. The steps below cover both documents in the order they actually happen.

1. Start from a compliant form. Use the template above or the Medicare private contract form published by your own contractor. Every clause in 42 CFR 405.415 has to be present.
2. Enter both parties and both dates. Record your name and practice address, plus the patient’s name and address. Section 405.415(h) also requires the effective and expiration dates of your current two-year opt-out period.
3. State your exclusion status. The contract must say plainly whether you are excluded from Medicare under Section 1128, 1156, or 1892 of the Social Security Act. The answer is usually no, and it still has to be on the form.
4. Walk the patient through the waiver clauses. They accept full responsibility for payment, agree not to submit a Medicare claim, and accept that Medigap will not pay. Read these out rather than pointing at them.
5. Sign, date, and hand over a copy. Both parties sign before any service is furnished. The patient gets their copy first, and you keep the version carrying both original signatures.
6. File your opt-out affidavit within 10 days. Send it to every MAC you would otherwise bill. Your initial two-year period starts on the date you signed the affidavit, provided it is filed within 10 days of your first private contract.

Miss that window and the start date moves. Under 42 CFR 405.410(c)(2), the two-year clock instead begins when the last affidavit is filed. Contracts signed earlier only become effective on that date, and anything you furnished in between is treated under standard Medicare rules.

Your current status also decides when you can move. A non-participating provider may opt out at any time. A participating physician can only opt out at the start of a calendar quarter. The affidavit has to reach the MAC at least 30 days beforehand.

Filing goes to whichever contractor holds jurisdiction for your region, so the right form is the one your own MAC publishes. Noridian Medicare covers jurisdictions JE and JF in the west. Novitas Medicare covers JH and JL. NGS Medicare, short for National Government Services, covers J6 and JK, while Palmetto GBA and WPS Medicare cover the rest.

Those sample contracts are not interchangeable. NGS publishes its own Medicare private contract form BEN-13580, and Noridian publishes a separate private-pay opt-out contract. If you download a Noridian Medicare private contract form, expect different wording from the NGS version. Both are built on the same regulation, so pull the current copy from your own contractor and check its revision date.

Renewal changed in 2015. Affidavits signed on or after June 16, 2015 extend automatically into each further two-year period, so there is no renewal affidavit to file. To stop the extension, write to every MAC holding your affidavit at least 30 days before the current period ends.

Your patient contracts do not inherit that convenience. Section 405.415(o) requires a contract for each two-year opt-out period, so the affidavit renews itself and the paperwork with patients does not. Put your opt-out anniversary in the diary and re-sign every active private-pay patient before it passes.

Medicare contracting also leaves the record-keeping entirely with you. You hold the signed originals, and CMS can ask to see any of them during the opt-out period. Section 405.415(m) sets that as the floor, though your state’s record retention rules usually run longer.

Digital forms and e-signature make that far easier to answer quickly. A signed PDF sitting in the patient record is retrievable in seconds, which a paper file in a cabinet is not.

Required elements under 42 CFR 405.415

42 CFR 405.415 lists 15 requirements, lettered (a) through (o). Some govern what the contract says. The rest govern how you print it, when you hand it over, and how long you keep it.

It is worth naming the section correctly, because plenty of circulating templates cite 42 CFR 405.440 for their required elements. That is a different rule covering emergency and urgent care by an opted-out provider. If your form cites 405.440 for its clauses, it is pointing at the wrong section.

The wording clauses are the easy half. Items (l) through (o) govern handling and storage, and three failures show up again and again.

• A copy never handed to the patient before treatment began.
• An original filed loose rather than kept with the patient record.
• A contract left running past the opt-out period it was written for.

Opt-out vs non-participating vs participating providers

Opting out is the only one of the three statuses that requires a written contract with the patient and stops Medicare paying anything at all. The other two both keep you inside the claims system, and they differ mainly on how much you may charge.

The Medigap column is the one patients argue about. A beneficiary paying for a supplement often assumes it will step in when Medicare does not. It will not, and 405.415(i) makes telling them a condition of a valid contract.

There is no superbill to fall back on either. Your patient cannot submit a claim for your care, so an itemized receipt buys them nothing from Medicare. Say so during the conversation, because patients coming from an out-of-network specialist often expect one.

Opting out is also all or nothing. You cannot privately contract with one Medicare patient and bill Medicare for the next. Once you have opted out, every Medicare beneficiary you treat needs a signed contract, emergencies aside.

That is why opting out clusters in particular settings. It shows up most in psychiatry practices and in functional medicine practices, where patients already expect to pay at the point of care.

Membership models are a separate question. Plenty of practices run concierge medicine without opting out, charging a membership fee while still billing Medicare for covered services. Opting out is a further step, and it is not required to charge for access.

What a signed contract does for your practice

A signed contract is what makes the private-pay arrangement enforceable, and it is the only evidence you hold if CMS reviews your opt-out. Four things follow from having one on file for every Medicare patient.

• Your opt-out survives a review. CMS can request any contract you have signed. Producing them on demand is what turns a claimed opt-out into a documented one.
• Payment lands without adjudication. There is no claim, no remittance advice, and no recoupment months later. You are paid at the point of care by the patient.
• Your fee schedule is your own. The limiting charge does not apply to an opted-out physician, so pricing follows your billing and payment setup rather than a Medicare rate.
• The money conversation happens first. The Medigap and payment clauses force it before treatment rather than after the invoice, which is where most disputes start.

Managing opt-out contracts and affidavits in Pabau

Running an opt-out practice is mostly a tracking job. Every Medicare patient needs a signed contract on file before their visit, and every one of those contracts expires with your opt-out period. Practice management software like Pabau keeps that paperwork attached to the patient instead of a filing cabinet.

You can send the contract as a digital form ahead of the appointment, which folds the signature into your existing patient flow. The patient reads it and signs on their own phone, and the signed copy files itself into their record with a timestamp. That timestamp is what shows the contract predates the service, which is the one thing 405.415(l) turns on.

Because opted-out providers collect from the patient directly, payment and record sit in the same place. You take payment against the appointment, issue the invoice, and see the signed contract on the same patient timeline. Pabau Pay, our card terminals, covers the in-person side.

Re-signing at your opt-out anniversary then becomes a filter and a bulk send. Pull every patient with a private contract on file, send the new version, and chase the ones that have not come back. The alternative is working through patient files one at a time.

Keep every opt-out contract signed and findable

Send the private contract for e-signature before the visit, store it against the patient record with a timestamp, and take payment directly. So you can produce a signed contract for any Medicare patient the moment CMS asks.

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Conclusion

Opting out is a short decision with a long administrative tail. The rule itself fits on two pages. What catches practices out is the calendar. There is a 10-day affidavit window at the start, then a fresh contract for every patient at every renewal.

If you are weighing it up, focus on the record-keeping rather than the wording. The template above handles the wording. The harder question is whether your practice can produce a signed contract for every Medicare patient, on demand, two years from now.

Get that part right and opting out stops being a compliance project and becomes a billing model you can run. Book a demo to see how Pabau stores signed contracts against the patient record and flags the ones due for renewal.

Continue your research

Who signs when the patient cannot? Medical power of attorney sets out the authority a legal representative needs before signing on a beneficiary’s behalf.

What else does a patient sign before care? Notice of privacy practices is the other document you hand over at a first visit, with a template to adapt.

Rolling new paperwork out to your team? EHR training covers how to get staff confident with a new form before it reaches patients.

Documenting Medicare assessments elsewhere? MDS assessment cheat sheet walks through the CMS-required sections, including the updated section GG.

Screening an older patient for capacity? Mini-mental state examination gives you the scoring guide for a standard cognitive screen.

Frequently asked questions