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October 25, 2005

 Subject:  Opting Out of Medicare

 Dear Patients,

Effective January 1, 2006, Acute Family Medicine Clinic, Inc. will “Opt Out” of the Medicare network and no longer be accepting Medicare assignment.

Opting out of Medicare is not an easy decision.  As providers, we are frustrated with keeping abreast of ever-changing rules and regulations, and tired of being forced to put Medicare rules above our patients’ needs.  As a business, we cannot continue being paid less than 50 cents on the dollar, months late, after much effort and expense on the part of our billing staff.  The Centers for Medicare and Medicaid Services (CMS) has proposed that physician payment rates will be cut 26% from 2006-2011—including a 4.4% cut on January 1, 2006.  In addition, it is our impression that for 2006 Alaska will lose the special funding that increased Medicare payments to Alaskan doctors who treat Medicare patients by 50 percent during 2004 and 2005.  Meanwhile, our clinic expenses (supplies, insurance, payroll, utilities, etc.) are increasing at 12-15% annually.

As a result of “Opting Out,” Acute Family Medicine Clinic, Inc. cannot bill Medicare or receive payment from Medicare for services on or after January 1, 2006.  It also means that Medicare patients cannot submit claims to Medicare for services we’ve provided.  If you want us to continue providing your medical care, we will be asking you to sign a private contract with us, as required by law.  The contract includes a “pay as you go” arrangement, in which the patient would be responsible for paying our fees.  Secondary insurance policies rarely cover fees that Medicare denies, but if you have such coverage, please check with your agent.  The contract cannot be signed earlier than 10 days prior to January 1, 2006. 

Needless to say, you have every right to choose another clinic or provider for your care, and we understand and respect whatever decision you make.  We have a list of clinics who accept Medicare assignment.  Please complete a records release if you desire us to send your records elsewhere.  We value you as individuals.  The fact that we have been forced to make this decision has left us with a sense of personal sadness and frustration.  This was a difficult decision, but one that is necessary for our viability.

If you have any questions please do not hesitate to call us.


 Daniel J. Coverdell, MD


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11470 Business




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