AAFP Resolution 504: What a Partial Medicare Opt-Out Could Mean for Direct Primary Care Doctors
By Maryal Concepcion, MD, FAAFP | Updated September 25, 2026 | 8 min read
If you are a Direct Primary Care doctor who has ever had to choose between your DPC practice and the hospitalist shifts, SNF rounds or hospice work you love, this one is for you.
Right now, Medicare opt-out is all or nothing. Once you opt out for your DPC practice, you cannot bill Medicare anywhere else, outside of emergency and urgent care exceptions. A resolution in front of the AAFP Congress of Delegates this October asks the Academy to fight to change that.
It is called Resolution 504, and it was introduced by the New Mexico Chapter. The full text is below, so you do not have to log in to the AAFP to read it. (It took me a password reset and three attempts to get in.)
Listen to the Episode With Dr. Shannon Connolly
I sat down with Dr. Shannon Connolly, co-owner of Open Arms Direct Primary Care in Southern California, past president of the CAFP and a CAFP delegate to the AAFP, to talk through what this resolution says and why it matters to every DPC doctor.
"If DPC physicians aren't in the room, DPC isn't necessarily going to be part of the conversation." - Dr. Shannon Connolly
Why the All-or-Nothing Rule Hurts Access
Dr. Connolly described a scenario that so many of us know too well. You run a small DPC three days a week. You also work two days a week as a hospitalist, admitting Medicare patients. The moment you opt out of Medicare for your DPC, the hospital can no longer employ you, because you cannot bill Medicare.
So most DPC doctors walk away from the hospital, the hospice or the skilled nursing facility. That is not a win for anyone.
Patients lose access. Communities lose doctors in the settings where part-time and moonlighting physicians fill real gaps, especially in rural areas.
Doctors lose flexibility. Most physicians today wear two or three professional hats. One Medicare decision should not dictate all of them.
Innovation slows down. When opening a DPC means giving up every other role, fewer doctors take the leap.
"An antiquated system where your relationship with Medicare in one setting also affects what your relationship with Medicare can be in other settings just doesn't make any sense." - Dr. Shannon Connolly
The Full Text of Resolution 504
Res 504 (New Mexico C) - Allowing Partial Medicare Opt-Out by Practice Setting Introduced by the New Mexico Chapter
WHEREAS, Despite efforts by American Academy of Family Physicians (AAFP) to reform Medicare payment, ongoing cuts are planned and many physicians are unable to sustain their private practices and may need to work in multiple settings, and
WHEREAS, in order to start a private practice or work in certain practice settings, physicians may desire to “opt out” of Medicare, and
WHEREAS, current federal Medicare regulations require physicians who opt out of Medicare to do so entirely, without the ability to selectively participate in certain practice settings, as Medicare billing is linked to a physician’s national provider identification (NPI) number, and
WHEREAS, this “all-in or all-out” policy prevents physicians who practice in different settings from billing Medicare for services provided in separate roles such as hospice, inpatient care, or locum tenens (outside of emergency care exceptions) without jeopardizing their opt-out status, and
WHEREAS, this restriction discourages physicians from opening innovative practice models that can improve access, reduce administrative burden, and enhance patient satisfaction, and
WHEREAS, the inability to partially opt-out of Medicare can create physician shortages in high-need areas such as small practices, hospice, rural areas, and skilled nursing facilities, where part-time or moonlighting physicians could otherwise fill gaps, and
WHEREAS, AAFP policy supports a physician’s right to autonomy in participation in Medicare and Medicare reforms to decrease administrative burden, and
WHEREAS, this resolution builds on that position by advocating for a partial opt-out option, preserving patient access while protecting physician practice autonomy, now, therefore, be it
RESOLVED, That the American Academy of Family Physicians advocate, in collaboration with the American Medical Association, American College of Physicians, and other organizations, for federal legislation or regulatory changes to allow physicians to opt-out of Medicare in one employment setting while maintaining the ability to bill Medicare for services provided in other practice settings (e.g., private practices, hospice, inpatient hospital care, or other defined roles).
(Received 8/19/26)
Fiscal Note: $27,000 (AAFP member login required)
Political Risk Assessment: Low
The AAFP Background on Resolution 504
The resolution asks the AAFP to advocate for changes to federal Medicare law or regulation that would allow physicians to opt out of Medicare participation in one practice setting while maintaining the ability to bill Medicare in other settings. Under current Medicare rules, physicians who elect to opt out generally do so across all Medicare-covered services rather than by individual employment or practice setting.
The AAFP has long advocated for Medicare payment policies that support physician practice sustainability, reduce administrative burden, and preserve patient access to care. Academy advocacy has focused on improving payment adequacy, addressing Medicare physician payment cuts, reducing unnecessary administrative requirements, and supporting the long-term viability of independent physician practices. AAFP policy on Payment, Physician further recognizes the need for flexibility within payment systems and affirms that physicians in independent practice should retain the right to determine their own charges and practice arrangements.
Accomplishing the change proposed in this resolution would likely require federal legislative action. Current Medicare law establishes physician opt-out status at the individual physician level rather than by practice site or employment setting, and CMS regulations implement that statutory framework. Creating a new participation pathway that would allow physicians to opt out in one practice setting while continuing to bill Medicare in another would likely require amendments to the Social Security Act and corresponding updates to Medicare regulations.
The AAFP has not undertaken robust advocacy on this issue in the past, but we have begun to explicitly address it this year in legislative efforts. For example, in July 2026, the AAFP submitted a letter for the record for a hearing on direct contracting, which noted: “Finally, while not squarely in the Subcommittee’s jurisdiction, we urge you to work with your colleagues at Energy and Commerce and Ways and Means to explore policy options to amend the current requirement that DPC physicians opt-out of the Medicare program entirely if they enter into a DPC arrangement with Medicare beneficiaries. Currently, physicians who see Medicare beneficiaries as part of a DPC practice can directly contract with those patients to provide services, but they must opt-out of the Medicare program entirely to do so. Importantly, the Centers for Medicare and Medicaid Services is explicit that opt-out is not selective. This means that a physician cannot opt–out for some Medicare beneficiaries and remain participating for others – it’s all or nothing. With the exception of emergency and urgent care services, opted-out physicians may not furnish any Medicare-covered services to any Medicare beneficiary, even beneficiaries who are not in a DPC contract.
This restriction can leave access voids in communities where DPC family physicians also provide inpatient, skilled nursing facility, or other Medicare-covered services outside their DPC practice model. Expanding the exceptions allowed would permit opted-out physicians to care for Medicare beneficiaries who are not in a DPC contract, ensuring seniors can maintain access to necessary services within a community.”
Why the Words "One Employment Setting" Matter
When I read the resolved clause, one phrase stood out: "one employment setting." Most DPC doctors own our practices. We are not employees of them in the way the phrase implies. I made public comment asking for that language to be amended.
Dr. Connolly sees it as a friendly amendment that does not change the heart of the resolution. But it is a perfect example of why DPC doctors need to be at the table. Well-meaning language can leave us out without anyone intending to.
"Only DPC doctors can really and truly speak to the experience of being a DPC." - Dr. Shannon Connolly
What Happens If Resolution 504 Passes
A vote at the Congress of Delegates is the start, not the finish. Here is the path Dr. Connolly walked us through.
It goes to a commission. The AAFP board authorizes one of its commissions to recommend how to implement the resolution. Commission members draft actual policy language based on the whereas and resolved clauses.
The board decides. The board can accept the language as policy, send it back with questions, or route it to another commission for a different perspective.
It becomes AAFP policy. Once adopted, it joins the AAFP policy compendium.
Policy unlocks advocacy. When Medicare opt-out comes up on Capitol Hill, the AAFP can direct staff and resources to it. Without policy on the books, the Academy cannot easily take a position on the spot.
Your Voice Matters, Member or Not
You do not need to be a health policy expert to advocate. As Dr. Connolly put it, your professional society needs doctors who can say three things: here is the rule, here is what happens in the real world because of it, and here is the barrier it creates for my patients. Policy staff can take it from there.
If you feel organized medicine does not represent you, that is a reason to show up more, not less. DPC doctors are now more than 11% of AAFP membership, the fastest growing sector of the Academy.
"It's not a charitable thing that you're doing, but it's an investment in shaping the regulatory environment that your business depends on." - Dr. Shannon Connolly
Have thoughts on Resolution 504? Leave me a voicemail at mydpcstory.com/contact. As chair of the AAFP Direct Primary Care Member Interest Group, I will bring your comments to the AAFP on your behalf, whether or not you are a member.
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This post and episode are not sponsored by the AAFP.
Frequently Asked Questions
What is AAFP Resolution 504? Resolution 504, introduced by the New Mexico Chapter, asks the AAFP to advocate with the AMA, ACP and other organizations for federal legislation or regulatory changes that would let physicians opt out of Medicare in one setting while still billing Medicare in others, such as hospice, inpatient hospital care or other defined roles.
Can a DPC doctor opt out of Medicare for some patients and not others? Not today. CMS is explicit that opt-out is not selective. With the exception of emergency and urgent care services, an opted-out physician cannot furnish Medicare-covered services to any Medicare beneficiary, including patients who are not in a DPC contract.
Would Resolution 504 change Medicare law right away? No. If it passes, it becomes AAFP policy that directs the Academy's advocacy. The AAFP's own background notes that the change would likely require federal legislation, including amendments to the Social Security Act and updated Medicare regulations.
Why should DPC doctors care if they never plan to work in a hospital? Because this rule shapes who can choose DPC in the first place. Hospitalists, hospice doctors, SNF physicians and residency faculty often cannot open a DPC without giving up roles they love. A partial opt-out makes it easier for more doctors to enter Direct Primary Care and keeps them serving their communities in every setting.
I am not an AAFP member. How can I weigh in? Leave a voicemail at mydpcstory.com/contact. I will bring your comments to the AAFP Direct Primary Care Member Interest Group. You can also get involved through the DPC Coalition and your state chapter.
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Frequently Asked Questions About AAFP Resolution 504 and Medicare Opt-Out
What is AAFP Resolution 504? AAFP Resolution 504, titled "Allowing Partial Medicare Opt-Out by Practice Setting," asks the American Academy of Family Physicians to advocate for federal legislation or regulatory changes that would let physicians opt out of Medicare in one setting while still billing Medicare in other settings. Examples of those other settings include private practice, hospice and inpatient hospital care. The AAFP would pursue this in collaboration with the American Medical Association, the American College of Physicians and other organizations.
Who introduced Resolution 504 and when? The New Mexico Chapter of the AAFP introduced Resolution 504. The AAFP received it on August 19, 2026, and it is before the AAFP Congress of Delegates in October 2026.
What does a partial Medicare opt-out mean? A partial Medicare opt-out would let a physician opt out of Medicare for one part of their work, such as a Direct Primary Care practice, while staying enrolled in Medicare for other roles, such as hospitalist, hospice or skilled nursing facility work. This option does not exist under current Medicare law.
Can a Direct Primary Care doctor opt out of Medicare for some patients and not others? No. The Centers for Medicare and Medicaid Services (CMS) states that Medicare opt-out is not selective. A physician who opts out cannot remain participating for some Medicare beneficiaries. With the exception of emergency and urgent care services, an opted-out physician cannot furnish Medicare-covered services to any Medicare beneficiary, including patients who are not in a DPC contract.
Why does Medicare opt-out apply to every setting a doctor works in? Current Medicare law sets opt-out status at the individual physician level, not by practice site or employment setting, and Medicare billing is tied to the physician's National Provider Identifier (NPI). As a result, one opt-out decision applies to every role the physician holds.
Can a DPC doctor who opted out of Medicare still work as a hospitalist? Usually not. A hospital that admits Medicare patients needs its physicians to bill Medicare, so an opted-out DPC doctor generally cannot be hired for hospitalist work. The same barrier applies to hospice, skilled nursing facility and locum tenens roles. Many DPC doctors end up leaving those roles to practice Direct Primary Care.
What Medicare services can an opted-out physician still provide? An opted-out physician can still provide emergency and urgent care services to Medicare beneficiaries under the existing exceptions. Outside of those exceptions, they cannot furnish Medicare-covered services to any Medicare beneficiary.
How does the all-or-nothing Medicare opt-out rule affect patient access? The all-or-nothing rule can leave gaps in care in rural areas, hospice, skilled nursing facilities and small practices, where part-time or moonlighting physicians could otherwise help. When DPC doctors have to step away from hospital, hospice or SNF roles, Medicare patients in those communities lose access to physicians who want to keep serving them. Resolution 504 names these shortages as a reason for change.
Would Resolution 504 change Medicare law right away? No. If Resolution 504 passes, it becomes the basis for AAFP policy and advocacy, not law. The AAFP's background on the resolution notes that the change would likely require federal legislation, including amendments to the Social Security Act and corresponding updates to CMS regulations.
What happens after a resolution passes at the AAFP Congress of Delegates? A passed resolution usually goes to an AAFP commission, which recommends how to implement it and drafts policy language. The AAFP Board then accepts the language, sends it back for more work or routes it to another commission. Once adopted, the policy is added to the AAFP policy compendium, which lets the AAFP commit staff and resources to advocating on the issue, including on Capitol Hill.
What is the fiscal note and political risk for Resolution 504? The AAFP lists a fiscal note of $27,000 for Resolution 504 and a political risk assessment of Low.
Has the AAFP advocated on DPC and Medicare opt-out before? The AAFP says it has not undertaken robust advocacy on this issue in the past but began addressing it in 2026. In July 2026, the AAFP submitted a letter for the record for a congressional hearing on direct contracting. The letter urged lawmakers to explore amending the requirement that DPC physicians opt out of Medicare entirely, and to expand exceptions so opted-out physicians can care for Medicare beneficiaries who are not in a DPC contract.
Why does the phrase "one employment setting" matter to DPC doctors? The resolved clause of Resolution 504 refers to opting out of Medicare in "one employment setting." Most Direct Primary Care doctors own their practices rather than being employed by them. Dr. Maryal Concepcion made public comment asking for that wording to be amended so the policy clearly covers physician-owned DPC practices. Dr. Shannon Connolly described it as a friendly amendment that does not change the substance of the resolution.
How many AAFP members practice Direct Primary Care? According to Dr. Shannon Connolly, DPC doctors have grown from roughly 2 to 3 percent of AAFP membership a few years ago to more than 11 percent, making DPC the fastest growing sector of AAFP membership.
How can DPC doctors comment on Resolution 504 if they are not AAFP members? Physicians who are not AAFP members can leave a voicemail at mydpcstory.com/contact. Dr. Maryal Concepcion, chair of the AAFP Direct Primary Care Member Interest Group, will bring those comments to the AAFP. DPC doctors can also get involved through the DPC Coalition and their state chapters.
Do I need to be a health policy expert to advocate for DPC? No. Dr. Shannon Connolly explains that professional societies need practicing physicians to share three things: the rule, what happens in the real world because of it, and the barrier it creates for patients. Society policy staff can then turn that into a resolution, a regulatory comment or a legislative proposal.
Who is Dr. Shannon Connolly? Dr. Shannon Connolly is a family physician and co-owner of Open Arms Direct Primary Care in Southern California. She is a past president of the California Academy of Family Physicians (CAFP) and serves as a CAFP delegate to the AAFP Congress of Delegates.
Where can I listen to the episode about Resolution 504? The episode "Medicare Opt-Out for DPC Doctors: AAFP Resolution 504 Explained with Dr. Shannon Connolly" is on the My DPC Story podcast, hosted by Dr. Maryal Concepcion. You can find it at mydpcstory.com and on major podcast platforms.
Is this My DPC Story episode sponsored by the AAFP? No. The AAFP does not sponsor or financially support My DPC Story, and neither the episode nor this article is AAFP-sponsored content.
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