With the potential of 26.5% pay cut from the “Sustainable Growth Rate” calculations that could take effect January 1 plus a 2% pay cut from the “Fiscal Cliff,” doctors are probably giving more thought than usual to their Medicare participation. Physicians will have until Dec. 31, 2012, to modify their status with the Medicare program for 2013, and major medical associations are now reminding their members to give their Medicare participation status serious consideration this weekend.

Doctors have three choices when it comes to Medicare participation:

1. Participation (PAR): They accept Medicare’s set rate as payment in full. This is also called taking assignment. Medicare pays PAR docs 5% more than non-PAR docs. Medicare also gives PAR docs faster and more integrated claims processing advantages.

2. Nonparticipation (non-PAR): Doctors can take assignment on a claim-by-claim basis but reserve the right to bill the patient 9.25% more than Medicare would have paid non-PAR docs.

3. Private contracting: The doctor bills the patient directly, and neither the doctor nor the patient can receive any reimbursement from Medicare. Doctors who take this option have to wait two years before going back to options 1 or 2. Doctors can opt out of options 1 and 2 each quarter with 30 days’ notice. Private contracting doctors are still allowed to certify plans of care for Medicare certified providers.

Typically, options 1 through 3 above are also the value of doctors for home health referrals. PAR docs tend to make the most referrals while private contracting docs tend to make the least. If more docs move down the status latter in 2013, this will mean greater concentration of influence in a smaller number of potential referral sources.

Do you know how to tell which docs are PAR? It’s easy. Go to Medicare’s website (http://medicare.gov/find-a-doctor/provider-search.aspx) and “find a doctor.” In the results, PAR doctors are labeled with an “M.”

If you want to read more about what participation status means to the doctors, check out this document from the American Medical Association:http://www.ama-assn.org/ama1/pub/upload/mm/399/medicare-par/know-options-medicare-participation-guide.pdf