Why more physicians are opting out of Medicare
A growing number of U.S. physicians are opting out of Medicare, citing unsustainable reimbursement rates that no longer cover the costs of delivering care. According to the Centers for Medicare and Medicaid Services (CMS), nearly 50,000 physicians, approximately 5% of all U.S. doctors, have officially withdrawn from Medicare participation.
"If the payment is below the cost to delivering the service, they have to do something. Nobody wants to opt out, we want to take care of patients. We want to be their providers to make sure they're taken care of. But, we have to keep the doors open, we have to keep the lights on, We have to pay our staffs, and it takes adequate payments," explained Scott Ferguson, MD, FACR, a diagnostic radiologist and member of the American Medical Association (AMA) Board of Trustees told Health Exec in an interview at the 2025 AMA House of Delegates (HOD) meeting.
He said the issue boils down to a basic imbalance where physicians are being paid less than what it costs to provide care.
Physician Medicare reimbursement dropped 33% since 2000, when adjusted for inflation, according to the AMA. As a result, Ferguson said, many practices—particularly small, independent ones—can no longer afford to absorb the losses.
"It's gotten to a point where you can't absorb it. And we're losing physicians and now have a shortage, and physicians are looking for options," Ferguson said.
Physicians might make more money if they opt out of Medicare
The AMA is now helping inform physicians about their legal and financial options if they consider leaving the Medicare program.
“There’s a program in Medicare where you can opt out. That means you don’t accept assignment,” Ferguson explained. “If you accept assignment, you get a certain level of pay. If you opt out, you can bill patients directly, and in some cases, receive up to 15% more.”
He said this is because physicians who opt out are still allowed to treat Medicare patients, but the patients must pay out-of-pocket and seek reimbursement themselves. These physicians are also removed from Medicare’s provider directories, which can affect referrals and visibility to patients who rely on Medicare’s network information.
Ferguson emphasized that the AMA is not advising doctors to leave the program, but rather wants to make sure they are aware of their rights and alternatives.
“Physicians are looking for at opting out because they can't cover their costs with what Medicare pays on multiple things,"
Some large health systems are reportedly evaluating broader strategies, including limiting Medicare patients or adjusting how they manage reimbursements internally. Meanwhile, independent physicians are being forced to make tough decisions about whether they can continue serving a Medicare population.
The AMA has repeatedly called on Congress and CMS to address the growing reimbursement crisis for the past two decades. In the meantime, more physicians may be forced to consider opting out, not because they want to abandon their Medicare patients, but because the economics are making traditional participation untenable.
AMA considering adding resources to help doctors opt out of Medicare
At the 2025 AMA HOD meeting in June, the medical societies of Florida, New York, Maryland, Mississippi, Tennessee, New Jersey, and West Virginia supported a resolution calling ion the AMA to develop educational resources on the AMA website for physicians interested in opting out of Medicare.
There was mixed testimony over Resolution 105 in the Reference Committee reviewing the proposal. Supporters highlighted the need to help interested physicians better understand the concept of opting out of Medicare participation. But those in opposition noted the AMA should not be promoting tools on opting out of Medicare, because it could decrease access to care in some communities. Amendments were made as part of a compromise that would allow the AMA to provide the requested information, while recognizing the importance of physician choice in Medicare participation.
The final resolution called for creation of a prominently featured page on its website dedicated to providing clear, comprehensive information on the process of opting out of Medicare. This was to include a step-by-step guide on how to opt out of Medicare, including sample documents and timelines. It was also supposed to include an overview of the legal, financial and ethical considerations for physicians considering when making the decision, and information on alternative payment models to ensure continuity of patient care. It was also supposed to include a frequently asked questions (FAQs) section to address common concerns and scenarios physicians may face when opting out of Medicare.
However, the HOD decided to table the discussion on the resolution until a future date. This indicates there is interest among the AMA members to provide this information, but as of now the full HOD does not appear willing to pull the trigger just yet.
Read more about physicians opting out of Medicare in a recent article.
Dave Fornell has covered healthcare for more than 17 years, with a focus in cardiology and radiology. Fornell is a 5-time winner of a Jesse H. Neal Award, the most prestigious editorial honors in the field of specialized journalism. The wins included best technical content, best use of social media and best COVID-19 coverage. Fornell was also a three-time Neal finalist for best range of work by a single author. He produces more than 100 editorial videos each year, most of them interviews with key opinion leaders in medicine. He also writes technical articles, covers key trends, conducts video hospital site visits, and is very involved with social media. E-mail: [email protected]