Should You Opt In or Opt Out of Medicare as a Therapist?
Learn what it means to opt in or opt out of Medicare as a therapist, plus how credentialing, billing, and payment rules actually work so you can choose the right path for your practice.
Whether you’re a solo therapist or group practice owner, deciding to either opt in or opt out of Medicare is one of the biggest choices you’ll make for your practice and long-term growth.
I talk to therapists all the time who are curious about accepting Medicare for their practice but hesitant about the admin, the rules, or the rates.
I get it.
I scaled my practice to seven figures by opening access to Medicare clients, expanding to a group, and filling caseloads within a month or two. And with 11,000 people turning 65 every day, the demand for behavioral health care through Medicare just keeps growing.
In this guide, I’ll walk you through what it really means to opt in or opt out of Medicare, who can enroll, what credentialing looks like, and how to choose the right path for your practice.
Why Medicare Matters (For Clients and Therapists)
For decades, Medicare access for mental health has been limited. That’s changing fast. Now, clinical social workers, marriage and family therapists, mental health counselors, and psychologists can all participate as Medicare providers.
That expansion means more clients in more communities can access care, and more therapists can build stable, values-aligned businesses.
But it also means you have to decide whether to opt in or opt out of Medicare as a behavioral health provider.
Let’s break it down.
What It Means to Opt In to Medicare
Opting in to Medicare means you enroll as a Medicare provider so you can bill covered services, follow Medicare rules, and accept Medicare’s allowed rates.
In plain language, you credential, submit claims, and get paid directly by Medicare for covered therapy services.
To opt in, you’ll:
Complete credentialing through PECOS
Verify your NPI, taxonomy, and license
Agree to Medicare’s allowed rates
Wait for approval from your Medicare Administrative Contractor (MAC)
Once you’re approved, you’ll receive an effective date - the first day you can bill. Anything submitted before that will be denied. Credentialing can take a few weeks to a few months, so start early.
(Get an overview of Medicare credentialing in this Step-by-Step Guide for Therapists.)
After formally opting in through the credentialing process, you can begin to submit claims directly to Medicare and get paid for covered therapy services.
Who Can Opt In to Medicare
Currently, Medicare-eligible behavioral health providers include:
Clinical psychologists (PhD, PsyD)
Clinical social workers (LCSW)
Licensed marriage and family therapists (LMFT)
Mental health counselors (LMHC, LPC, etc.)
Interns and trainees can’t enroll, but group practices can credential each eligible clinician individually.
Some details vary by state and MAC, such as supervision rules, scope of practice, and documentation policies. Always double-check with your MAC before billing (find your regional MAC on the map here).
This expansion is a major shift for our field.
Many of you have been waiting for years to serve Medicare clients directly. Adding Medicare clients can be a complete income stream or a single component of a mixed-payer practice.
I embraced Medicare in my private practice because it helped me build access and stability. Referrals from primary care increased, care teams took my practice seriously, and billing was easier than most commercial plans.
Medicare can be a consistent, reliable payer that helps diversify your income.
Opting Out of Medicare: When It Makes Sense
In some cases, opting out makes more sense for your goals, your systems, or the kind of practice you’re building.
Opting out means you formally choose not to bill Medicare and instead use private contracts with Medicare clients. If you want to charge Medicare clients out of pocket for services, you need to formally opt out.
You and your client agree on paper that:
You won’t submit claims to Medicare.
The client won’t seek reimbursement.
You’ll both follow your agreed-upon private rate.
This decision lasts two years and renews automatically unless you file to change it. If you decide to opt out, go to your MAC’s website (find your regional MAC here) and search “opt-out”. Each MAC has a form you fill out and mail or fax in.
Opting out might be a good fit if you:
Run a cash-only or boutique practice
Offer specialized or extended sessions
Avoid insurance panels entirely
Prefer less admin work and direct payments
Just make sure your team understands that no Medicare claims should ever be submitted during your opt-out period. There are rare exceptions for emergencies, but otherwise, all services are private pay.
Also, it’s important to note that opting out is tied to your NPI1, which means the opt-out “follows” you if you work at an agency or hospital.
If it’s your first time opting out, you can usually rescind it within 90 days if you change your mind.
Note: Some states allow a third option beyond opting in or opting out of Medicare: non-participating status. This option does not apply to behavioral health claims in most cases; however, in some regions, it is allowed. Check with your MAC on a case-by-case basis to determine applicable requirements.
Medicare Billing, Rates, and Compliance Tips
When you enroll, success comes down to clean claims, strong notes, and a repeatable system. This keeps denials low and audits predictable.
Before billing a single session:
Make sure credentialing is complete.
Match your NPI, taxonomy, and location info on every claim.
Use an EHR that supports Medicare billing.
I recommend Jane App as a reliable EHR and practice management software. Watch my full demo on Mastering Medicare Billing with Jane App: A Step-by-Step Guide. Schedule a demo and use the code GJVCONSULTING1MO for a one-month grace period!
Medicare rates vary by state and CPT code, and yes, they’re often lower than private pay rates. But for many practices, Medicare brings stability, predictable cash flow, and access to clients who need care most.
In my state, Medicare paid well, and a mix of private-pay and Medicare clients helped my practice scale and kept schedules full.
Next Step: Make Your Medicare Plan Simple
Choosing your Medicare path doesn’t have to feel confusing. Pick the status that aligns with your mission, admin capacity, and growth plan.
From my experience and from hundreds of therapists I have supported, opting in to Medicare can open steady access to care without overwhelming your systems. If you want support to make it easier, I can help.
Book a free 15-minute discovery call to talk through your situation and build a Medicare plan that works for you.
Gabrielle Juliano-Villani, LCSW, helps healthcare organizations, online platforms, and mental health providers navigate Medicare & Medicaid with confidence. With over a decade of experience supporting mental health providers in navigating billing, compliance, and documentation, she now offers consulting and training to help others grow sustainable, compliant practices.