A retainer fee without opting out: what the fee may and may not buy

Can a membership fee sit on top of Medicare without opting out?

A fee can sit alongside Medicare while you stay enrolled, but only for things Medicare does not pay for. Your participation agreement commits the practice to accepting Medicare's payment on an assignment basis for every covered item and service you furnish to a beneficiary that year 1Ref 1United States Congress (2023).42 U.S.C. § 1395u(h) — Participating physician or supplier; agreement with Secretary.Quoted for the content of the Medicare participation agreement in 42 U.S.C. 1395u(h)(1): the physician agrees to accept payment on an assignment-related basis for all items and services furnished to enrolled beneficiaries, which is why a membership fee cannot reach covered care.. Anything the fee buys has to fall outside that promise, and a bundled fee gets read one item at a time.

The Office of Inspector General has said what happens when a line fails. Its 2004 alert to physicians puts it directly: if participating providers "request any other payment for covered services from Medicare patients they are liable for substantial penalties and exclusion from Medicare" and other federal health care programs 2Ref 2Office of Inspector General, U.S. Department of Health and Human Services (2004).OIG Alerts Physicians About Added Charges for Covered Services.Used for the core prohibition on charging a Medicare beneficiary anything beyond the deductible, coinsurance and genuinely non-covered items, the exposure to penalties and exclusion for participating and non-participating providers alike, and the settled example of a $600 annual Personal Health Care Medical Care Contract bundling care coordination, a comprehensive assessment and plan, and extra time.. The alert names no dollar figure for those penalties, and none appears in this page's sources, so the exposure to weigh in a business plan is the exclusion.

What the participation agreement commits you to

The agreement is written to the whole year and the whole panel. A participating physician agrees to accept payment on an assignment-related basis "for all items and services furnished to individuals enrolled under this part" 1Ref 1United States Congress (2023).42 U.S.C. § 1395u(h) — Participating physician or supplier; agreement with Secretary.Quoted for the content of the Medicare participation agreement in 42 U.S.C. 1395u(h)(1): the physician agrees to accept payment on an assignment-related basis for all items and services furnished to enrolled beneficiaries, which is why a membership fee cannot reach covered care.. No clause carves out a group of patients who also pay you directly, and nothing in it sorts one covered service from another.

Accepting assignment means Medicare's approved amount is the whole price of a covered service. The patient's share of that price is the ordinary deductible and coinsurance, and the only separate charge you may collect is for what is genuinely not covered 2Ref 2Office of Inspector General, U.S. Department of Health and Human Services (2004).OIG Alerts Physicians About Added Charges for Covered Services.Used for the core prohibition on charging a Medicare beneficiary anything beyond the deductible, coinsurance and genuinely non-covered items, the exposure to penalties and exclusion for participating and non-participating providers alike, and the settled example of a $600 annual Personal Health Care Medical Care Contract bundling care coordination, a comprehensive assessment and plan, and extra time..

A membership fee is not a fourth category.

It is either payment for non-covered items and amenities, or it is an extra charge for covered care wearing a different name. Dropping to non-participating status does not open a third door: the same alert warns that non-participating providers "may also be subject to penalties and exclusion for overcharging beneficiaries for covered services," with the limiting charge setting the ceiling on an unassigned claim 2Ref 2Office of Inspector General, U.S. Department of Health and Human Services (2004).OIG Alerts Physicians About Added Charges for Covered Services.Used for the core prohibition on charging a Medicare beneficiary anything beyond the deductible, coinsurance and genuinely non-covered items, the exposure to penalties and exclusion for participating and non-participating providers alike, and the settled example of a $600 annual Personal Health Care Medical Care Contract bundling care coordination, a comprehensive assessment and plan, and extra time..

The membership fee OIG's alert describes

OIG's alert describes a settled case, and it is the closest thing to a worked example in this page's federal sources. A physician offered Medicare patients a "Personal Health Care Medical Care Contract" for an annual fee of $600. The listed items included coordination of care with other providers, a comprehensive assessment and plan, and extra time with the physician 2Ref 2Office of Inspector General, U.S. Department of Health and Human Services (2004).OIG Alerts Physicians About Added Charges for Covered Services.Used for the core prohibition on charging a Medicare beneficiary anything beyond the deductible, coinsurance and genuinely non-covered items, the exposure to penalties and exclusion for participating and non-participating providers alike, and the settled example of a $600 annual Personal Health Care Medical Care Contract bundling care coordination, a comprehensive assessment and plan, and extra time..

OIG's position was that at least some of those items were already covered by Medicare, which turned the contract into a request for extra payment on covered services and so into a violation of the assignment agreement 2Ref 2Office of Inspector General, U.S. Department of Health and Human Services (2004).OIG Alerts Physicians About Added Charges for Covered Services.Used for the core prohibition on charging a Medicare beneficiary anything beyond the deductible, coinsurance and genuinely non-covered items, the exposure to penalties and exclusion for participating and non-participating providers alike, and the settled example of a $600 annual Personal Health Care Medical Care Contract bundling care coordination, a comprehensive assessment and plan, and extra time.. The physician settled. The alert never says which of the three items carried the finding.

That silence is the difficulty for anyone designing a fee today. No source in this set publishes a list of membership items that sit safely outside Medicare, and OIG's three describe one failed contract. Extra time is the hardest of the three to place, because the visit it lengthens is itself a covered service.

But the alert is from 2004, and it is a warning to physicians with no elements you can test a draft against. Treat the three items as the questions a reviewer would ask first.

What the fee may buy

Non-medical services and amenities, paid out of pocket by patients who want them and can afford them. The AMA Code of Medical Ethics, in its current opinion on retainer practices, says physicians are "free to enter into contracts to provide special non-medical services and amenities with individual patients who are willing and able to pay additional costs out of pocket" alongside ordinary medical care 3Ref 3American Medical Association, Council on Ethical and Judicial Affairs (2026).Opinion 11.2.5 Retainer Practices.Used as ethics guidance for the lawful shape of a retainer fee: special non-medical services and amenities paid out of pocket, billing for them kept distinct from insurance-reimbursable medical services, and continued care under existing insurance for a patient who declines the retainer..

The same opinion attaches two conditions that read like billing instructions. The first is separation: charges for special services or amenities under a retainer contract must be clearly distinguished from "medical services reimbursable by the patient's health care insurance or third-party payer" 3Ref 3American Medical Association, Council on Ethical and Judicial Affairs (2026).Opinion 11.2.5 Retainer Practices.Used as ethics guidance for the lawful shape of a retainer fee: special non-medical services and amenities paid out of pocket, billing for them kept distinct from insurance-reimbursable medical services, and continued care under existing insurance for a patient who declines the retainer.. In practice that means the membership price never enters your fee schedule for covered services. It carries its own invoice line and its own description of what the patient is buying.

The second condition covers the patient who says no. Where transfer to another physician is not feasible, the physician should continue to provide care "under the terms of the patient's existing health care insurance until other appropriate arrangements for ongoing care can be made" 3Ref 3American Medical Association, Council on Ethical and Judicial Affairs (2026).Opinion 11.2.5 Retainer Practices.Used as ethics guidance for the lawful shape of a retainer fee: special non-medical services and amenities paid out of pocket, billing for them kept distinct from insurance-reimbursable medical services, and continued care under existing insurance for a patient who declines the retainer.. A membership that quietly functions as the price of staying on the panel fails that, and on the Medicare side it starts to look like a charge for covered care.

This is professional ethics guidance and not law. The opinion carries no penalty of its own and never mentions Medicare by name. It is still the only source here that describes what a retainer looks like from the inside.

The claim still gets filed for every covered visit

Every covered service furnished to a Medicare beneficiary still requires a claim, whatever private arrangement sits beside it. Section 1848(g)(4) of the Social Security Act writes that duty to the service itself. Noridian, one of the Medicare Administrative Contractors, states a civil monetary penalty of up to $2,000 per violation and adds that providers may not charge patients to prepare or file the claim 4Ref 4Noridian Healthcare Solutions (CMS Medicare Administrative Contractor, Jurisdiction E Part B) (2025).Mandatory Claim Submission - JE Part B.Used for the mandatory claim submission duty under section 1848(g)(4) of the Social Security Act, the civil monetary penalty of up to $2,000 per violation, and the bar on charging the patient to prepare or file the claim, which together mean a membership fee cannot absorb the billing work for a member's covered visits..

Two consequences follow for the business model. The membership cannot bundle the billing work, because that charge is not available to you at any price. And a Medicare member generates the same claim traffic as every other patient on the panel, so the fee has to earn out on top of a full billing workload.

Charges that fall outside covered services run on their own rules. The common example is no-show fees, and they turn on questions this page does not answer.

Opting out is the only exit from the charge limits

Only a formal opt-out lifts the ceilings. A physician who has opted out "is not subject to the limiting charge provisions of § 414.48 of this chapter, except for services provided under § 405.440," which is the emergency and urgent care carve-out 5Ref 5Centers for Medicare & Medicaid Services (2023).42 CFR § 405.425 — Effects of opting-out of Medicare.Used for the contrast case: only a physician who has opted out is outside the limiting charge provisions of 42 CFR 414.48, apart from emergency and urgent care under 42 CFR 405.440.. Staying enrolled and calling the charge a membership changes none of that, and neither does the patient's willingness to pay it.

But the exit has no partial version. Under 42 CFR 405.405, a physician who enters even one private contract with a Medicare beneficiary for an otherwise covered service, and who files the opt-out affidavit, is out of the program for the full two-year period, and services furnished under such a contract draw no Medicare payment at all, direct or indirect 6Ref 6Centers for Medicare & Medicaid Services (CMS), Department of Health and Human Services (2024).Code of Federal Regulations, Title 42, Chapter IV, Subchapter B, Part 405, Subpart D — Private Contracts (§405.400 Definitions, §405.405 General rules, §405.410 Conditions for properly opting-out, §405.415 Requirements of the private contract).Used for 42 CFR 405.405: a physician who enters even one private contract with a Medicare beneficiary for an otherwise covered service and files the opt-out affidavit is out of Medicare for the whole two-year period, and no Medicare payment flows for services under such a contract, direct or indirect.. The two conditions travel together. Without the affidavit there is no opt-out, the contract alone lifts nothing, and the participation agreement keeps running on every covered service beneath it 1Ref 1United States Congress (2023).42 U.S.C. § 1395u(h) — Participating physician or supplier; agreement with Secretary.Quoted for the content of the Medicare participation agreement in 42 U.S.C. 1395u(h)(1): the physician agrees to accept payment on an assignment-related basis for all items and services furnished to enrolled beneficiaries, which is why a membership fee cannot reach covered care.. The concierge tier you wanted for twelve patients arrives with the rest of the panel attached to it.

The filing has a calendar on it. A physician who is currently participating submits a signed affidavit to each Medicare Administrative Contractor "at least 30 days before the beginning of the selected calendar quarter" 7Ref 7Centers for Medicare & Medicaid Services (2023).42 CFR § 405.410 — Conditions for properly opting-out of Medicare.Used for the opt-out filing mechanics that a still-enrolled physician has not performed: a signed affidavit filed with each Medicare Administrative Contractor at least 30 days before the beginning of the selected calendar quarter., so the earliest live date is the next quarter that still leaves 30 days of runway. The arithmetic of opting out mid-career turns on a different number from anything above, which is the share of your current Medicare patients who sign a private contract and pay your full fee.

Before you sell the first membership

Write two lists before you write the agreement. The first is what the fee buys, item by item, each one something Medicare would not pay for under any code. The second is what stays inside covered care and keeps running through Medicare on assignment, for members and non-members alike. Anything you cannot place on one list or the other stays out of the agreement until you can.

• Price the membership as its own product, on its own invoice line, kept off the fee schedule you bill covered services against.
• Read your first list against OIG's three. Care coordination, a comprehensive assessment and plan and extra time are the items OIG named from the challenged contract, and each of them attaches to something Medicare pays for.
• Keep filing. Every covered visit for a member produces a claim, the membership pays for none of that work, and the patient cannot be billed for it.
• Put in writing what a patient who declines receives, and confirm it is the same covered care on the same terms as before.
• Ask health care counsel about your own state before the first signature. State law on retainer and direct primary care agreements sits outside every federal source above, and this page has none that describes it.

If the first list comes out too thin to price, the membership is not the thing to fix. The other route is the affidavit, and it changes the terms for the whole panel rather than one tier of it.