HCFA Clarifies Private Contracting Position

The Fall 1997 Health Law Newsletter reported on a provision in the Balanced Budget Act which, when read literally, appears to prohibit Medicare-participating physicians from contracting privately with Medicare patients for non-covered services.

That section of the Balanced Budget Act has generated much controversy. In fact, the United Seniors Association, a group representing more than 500,000 senior citizens, filed suit in federal district court Dec. 30 to block the new law. In addition, a bill is pending in Congress that would clarify that a physician can accept payment from a Medicare patient for non-Medicare covered services without jeopardizing physicians' participation in Medicare.

However, in the meantime, Health Care Financing Administration (HCFA) officials have made it clear that HCFA does not believe the Balanced Budget Act prohibits private contracting for non-covered services. According to Nancy Ann De Parle, HCFA Administrator, Medicare beneficiaries "have always been able to pay out of their own pockets for services not covered by Medicare without penalty to themselves or their physicians; the new Balanced Budget Act does not change that."

HCFA's stated policy should be comforting to physicians who occasionally provide non-Medicare covered services to Medicare beneficiaries and accept payment directly from the beneficiary.