2024: Opting Out of Medicare for LMFTs, and LPCs
Updated February 18, 2025
Starting January 1, 2024, Marriage and Family therapists (LMFTs, MFTs) and Licensed Professional Counselors (LPC) became eligible to be reimbursed by Medicare. The goal of this expansion has been focused on increasing access to care for Medicare members, as well as more parity across mental health licenses.
For some, this new expansion is a huge win. Others see lower reimbursement rates for MFTs and LPCs as well as increased regulation and paperwork on whether a therapist takes Medicare or not as a HUGE frustration. For example, LMFTs and LPCs will be reimbursed 75% of what psychologists make and that amount is NOT consistent across the country. For some of you, that may be great, but for others, it is NOT so great.
And, even if you have NO desire to take Medicare, now is the time you MUST opt-out, OR Medicare could require you to pay back any self-care clients you have that are on Medicare starting January 1, 2024. Say what?! Yep. I know your immediate response might be-that can NOT be right. I can’t be forced to opt-out of an insurance company I never opted into in order to take money from a client? I know it sounds wrong- but keep on reading.
We are going to try to make this as simple as we can… but, let’s be honest, they did NOT make it simple.
You MUST make a decision and file the paperwork ASAP:
You need to make a decision one way or the other or you can’t see people who have Medicare, even if they agree to pay your private pay rate. Yes, even if you’ve seen them for years. Even if they just got on Medicare and you didn’t realize, not taking the proper steps could leave you unpaid or paying back fees for services you provided in good faith.
Video: How to Determine Your Medicare Rates
Ok, so let’s get down to brass tax. Some of you are super excited about this advancement! And this could be great for you, but, how can you know? Here is a video Miranda, one of the business coaches for therapists at zynnyme made showing how to determine your rate for reimbursement. Please watch the entire video. The rates shown are for psychologists only. So, the rates are a starting point ONLY. Watch the entire video. The video is about 20 minutes, she tried to be brief, but she wasn’t! But, she only got on a soapbox a tiny bit!
Go to the fee schedule here.
Follow the step-by-step instructions in the video above or Barbara’s written instructions here .
Remember: Once you have the rates, multiple them by .75 to get YOUR reimbursement rate if you are a LMFT or LPC.
Ok- now for a dance party! You just did a hard thing! Put on some tunes and get to shaking.
Now for the hard/easy part- should you join?
Ready to Consider Enrolling in Medicare as a LMFT or LPC?
Now that you know the rates, you might be considering enrolling as a Medicare provider. That is great. BUT, we highly recommend you do NOT go straight to filling out the application. There are a lot of moving parts here and it is really important to ensure this makes sense for your unique business before investing time (and money) in the application process. Here are the steps we recommend before enrolling in Medicare.
First, it is super important that you have clarity on your financial business plan before saying yes to any insurance contract. So, if you haven’t done our free How to Set Fees training yet, now would be the PERFECT time to do it. We give you a formula, talk through the ethics and legal considerations, etc. Not taking this step can easily lead to you accidentally accepting rates or reimbursements that will literally leave you in poverty depending on where you live in the country. And we do NOT want that for you. Click to watch the How to Set Fees in Private Practice training today.
Second, let’s have some real talk. Does this work for you organizationally? If you have never been a fan of bureaucracy, struggle with having IMPECCABLE documentation, don’t have time or energy for audits, and don’t have a deep understanding of Medicare regulations or the time to learn, this may not be the thing for you. For example, Miranda as a therapist with ADHD and significant neurodivergence would not be great at Medicare billing in private practice. Does that make her a bad therapist or business owner? Nope. It makes her self-aware.
Remember, many of the places that accept Medicare currently have staff to do quality assurance, schedule clients, do billing, etc. If you, as a one-person operation or group practice don’t have the resources, that is ok. And remember, above when we were looking at numbers? If we need the support to make this happen that might change the minimum fee we need to be reimbursed to make this viable.
Does it all work for you financially and organizationally? Rad! Click here to see the ah-mazing resources from Barbara Griswold from Navigating the Insurance Maze. Barbara has decision trees, step-by-steps, and some trainings on how to get started.
Please note: The MACS do NOT need your credit card number and you should NOT give them a credit card number over the phone. We heard at least one therapist get scammed when trying to call one of the MACs regarding Medicare.
Ok… but what if you are a hard pass on Medicare as a LMFT or LPC? Can’t you just ignore this? Nope.
You MUST take action ASAP or you won’t be able to see any clients who have Medicare and get paid in any way. If you do not opt-out, and a client with Medicare pays you privately, you can be asked to pay that money back by the Federal government. Yes, you heard that right. Medicare is NOT the same as other insurance providers. You must opt-out of being a medicare provider OR be paneled to get paid for any services related to Medicare clients.
Ok- what if you are considering opting out of Medicare? Read this first! Hidden costs of opting out of Medicare
Ok… so you realized that the rates don’t work for you, and/or you don’t want to mess with the documentation requirements of medicare, so you decide to opt-out. Here are a few more things you MUST consider before opting out of Medicare:
When you opt-out of Medicare as an MFT it applies to ALL work settings.
So, what does that mean? If you work for a nonprofit, agency, or business that DOES take medicare and you do NOT want to take medicare in another setting or in your private practice- you can’t pick and choose where to opt-out. This can make life VERY tricky. And, in some cases, it could lead to you be unable to see Medicare patients in private practice at all. Why? Because if you aren’t opted in you can’t receive payment. And if you aren’t opted out- you can’ t accept money from them for private pay. I know it seems silly but this is the reality. This could also mean asking your employees to opt-out could be tricky as it might impact them in other work settings or reduce future employment opportunities.
Some Insurance Networks will drop you if you opt out of Medicare
According to our Insurance maven Barbara Griswold, LMFT over at Navigating the Insurance Maze “I’m getting emails from therapists nationwide, reporting their provider contracts with certain health plans have been terminated without warning because the clinician had opted out of Medicare. Others are being told if they do opt out of Medicare, they’d be booted off the network.
Susan Frager, Medicare expert/diva and owner of PsychBillingCoach.com, is hearing the same thing. “This is happening with Kaiser Permanente, Tricare, Carelon (formerly Beacon), Horizon BCBS of New Jersey, some Aetna plans, and other plans, some who have stated openly, ‘if you’re going to contract with us, you must not opt out of Original Medicare…. Read the entire article about having insurance contracts terminated after opting out of Medicare here-
Some employees contract and otherwise are terminating people who opt-out of Medicare. This means 1099 and w-2
Barabara also shares “This trend can also be seen over at Grow Therapy, a nationwide platform that connects providers and clients. “While Medicare enrollment is optional…because the insurance companies we partner with often work with Medicare, they don’t allow providers to be on the Medicare Opt-Out list. Therefore, we can’t allow it either,” said a Grow Therapy representative.’” Read the entire article about being fired after opting out of Medicare here- it is a must read if you are trying to understand this issue.
Part of this gets complicated by Medicare advantage plans that many online tech companies service and they are currently reimbursing people for services provided without opting into original Medicare. Unfortunately, the analysis by multiple people reading the law keeps coming back to the same issue- if you are seeing ANY human on any type of Medicare and aren’t opted in, the risk of clawbacks is HIGH.
They have a 10 step plan if you feel you’ve been unfairly terminated that they review here.
Step-by-step Opting Out of Medicare for 2025
So, let’s get into the step-by-step of opting out of Medicare as a LPC or LMFT for 2024. Spoiler alert: this process is tedious. If anyone has a better way. Please reach out to help@zynnyme.com and we will be happy to pass it along. This is what we are seeing in multiple places.
Actually, what we are seeing is very vague directions that include links to links to links! Our Business School clients are asking us- but how does this actually work?! So, here we are. We are sharing here because we know this goes way beyond the private practice owners in Business School for Therapists. We truly hope this helps.
“IMPORTANT NOTE: BEFORE OPTING OUT, BE SURE TO REACH OUT TO ALL INSURANCE PLANS YOU WORK WITH. Some plans require network providers to provide services to their Medicare members. More than one therapist has shared they were terminated from the panel when she opted out of Medicare.” From Barbara Griswold of Navigating the Insurance Maze
Go here and determine who administers Medicare in your area. Note: you may have multiple administrators if you live in a large state or are licensed in multiple states. Note the Medicare Administrator Contractor (MAC) code and Locality Code for ALL that could apply.
Go here and match up the MAC codes with the name of the MAC. Yes, it is irritating and silly that they don’t list them together.
Google the name of that administrator and opt out affidavit. For example: “Noridian Healthcare Solutions, LLC opt out affidavit” Note: It looks like if you have multiple administrators you will likely have to do this multiple times..
Download the form(s).“Note: This form must be printed and mailed with an original signature from the provider. A signature from the contact on the application will not be accepted. Please mail request to your Medicare Administrative Contractor (MAC)… Providers who render services in multiple states, must have affidavits filed with all MACs who have jurisdiction over claims the physician/practitioner would otherwise file with Medicare.”
To locate your MAC’s mailing address where you need to send the physical form with your wet signature click here. In other words, you can’t e-sign or even print the signature out from the printer. We are kicking it old school with Medicare.
Make a copy of the form for your records. Mail the ORIGINAL form. We’d recommend going old school and getting a return receipt or sending this overnight with the way this whole thing is going.
Set a reminder in 30-90 days to confirm your opt-out was recorded on this website by looking up your name. https://data.cms.gov/tools/provider-opt-out-affidavits-look-up-tool It is unclear how long it will take for the opt-out to be processed.
“Opt-out is for a period of two years. At the end of the two-year period, my opt-out status will automatically renew. If I wish to cancel the automatic extension, I understand that I must notify my Medicare Administrative Contractor (MAC) in writing at least 30 days prior to the start of the next two-year opt-out period.”
HOWEVER, you still can NOT see anyone who has Medicare until you’ve entered into a private contract with them. See the next section on how to set up a private contract with patients who have Medicare so you can legally get paid and NOT have to pay the money back.
Please note: The MACS do NOT need your credit card number and you should NOT give them a credit card number over the phone. We heard at least one therapist get scammed when trying to call one of the MACs regarding Medicare.
Identifying Medicare Patients and Signing Private Contracts
Come up with a super clear process on how to identify medicare patients in your practice. We think this can be tricky. Unfortunately, clients can forget about these changes. The biggest things to watch for would be birthdays when people become eligible and people going on disability.
Google the following substituting the name of your MAC. For example, “noridian medicare private contract form” Here is a link to Noridian’s form.
We recommend considering including the verbiage in the private contract for Medicare in your regular informed consent documents. And then, if your client has Medicare have them sign the standalone form as well.
Use the information and verbiage to create this form on your letterhead or within your practice management system with all appropriate language.
EVERY patient who you see who has Medicare you and the client must sign, and you may need to update the signature every two years.
Frequently Asked Questions about this Process:
These are the most commonly asked questions when I posted the blog above with answers from the Center for Medicare and Medicaid Services (CMS)
When can a therapist be paid by Medicare?
Check out Barbara Griswold's amazing decision tree here!
What taxonomy code do I use for filling out forms?
A taxonomy code is a unique 10-character code that designates your classification and specialization. You will select this code when applying for an NPI in NPPES. The MFT taxonomy code is 106H00000X. The MHC taxonomy code is 101YM0800X
What enrollment application do I use to enroll in Medicare?
MFTs and MHCs can enroll electronically using the Provider Enrollment, Chain, and Ownership System (PECOS) or the paper CMS-855I enrollment application. PECOS is the online Medicare enrollment system. It offers a scenario-driven application, asking questions to obtain the required information for your specific enrollment scenario. Use PECOS for faster and easier enrollment into Medicare.
The paper CMS-855I application does not list the MFT and MHC specialties. How do I identify my specialty on the application?
MFTs and MHCs should select the Undefined Non-Physician Practitioner Specialty option in section 2H of the CMS-855I application and specify MFT or MHC in the space provided. A future update of the paper CMS-855I will include the MFT and MHC specialties. The specialties will be available in PECOS for online application submissions effective November 2023.
Check out the full FAQs resource from CMS here
If I opt-out of Medicare in one place does it opt me out everywhere?
Yes, it does. And this can be an issue depending on where you are employed. This can also be an issue for your employees if you run a group practice and they are employed in multiple places. Some employers require you to be able to bill Medicare. But, what do you do if you don’t want to, or can’t take medicare in your private practice? We don’t have a good answer yet. Check out this video we made after a call with an attorney about this issue.
What if I am an employer of others? Should I ask them to opt out of Medicare?
This can also be an issue for your employees if you run a group practice and they are employed in multiple places. This gets really tricky and there aren’t really good answers regarding how to refer clients with Medicare out from different places that aren’t setup to take Medicare. Check out this video we made after a call with an attorney about this issue.
Wait- I opted out of Medicare and I got dropped from Headway, Alma, BetterHelp, etc. What just happened?
Some of the tech companies that take care of credentialing and billing for you require you to be eligible with all insurance companies. You can’t choose which companies you accept based on reimbursement rates or whether it works in all aspects. The issue with Medicare is that it is not based on work location but based on providers across ALL locations.
Additional resources regarding the Medicare Updates for MFTs and Counselors:
NBCC has provided 6 in-depth trainings to help you navigate this process of enrolling or opting out of Medicare. You can check out these free trainings and slide downloads here.
Barbara Griwsold: HIGHLY recommend getting on this newsletter even if you NEVER plan to take insurance. The content is direct, helpful, and the CEs fantastic. There is a lot of content for private pay therapists. https://theinsurancemaze.com/medicareupdate/
Webinars about enrolling in Medicare as well as help enrolling: http://www.yourbillingbuddy.com/
FAQs from the the Center for Medicare and Medicaid services: https://www.cms.gov/files/document/marriage-and-family-therapists-and-mental-health-counselors-faq-09052023.pdf
Ok… take a breath. How are you feeling? It might be time to do another dance party, or take a walk. We totally get you. To be honest, we get a little frustrated about the American mental health system. We love therapy. We love healing. We love therapists. But, this stuff… we don’t love it. Just want you to know if you don’t love it either, you are not alone.
Kelly Higdon, LMFT and Miranda Palmer, LMFT are the co-authors of this article. They are passionate about helping therapists through their free trainings and through their Business School for Therapists. They help you dig into creating systems and businesses that get back to the heart of healing and therapy- while making sure they are sustainable and profitable. Looking for more support for your private practice? Get personalized recommendations today, for free.
