Over the past year, I have continued to gather information on Medicare and cash-based PT, and have been compiling a full overview of the subject. I didn’t want to simply revise my former post addressing this question, because it would no longer match with some of the reader comments. I also felt that the posts could stand alone and refer to one another, with the former one focusing solely on clinics who have no relationship with Medicare, and this one including all three possible relationships that a Physical Therapist can have with Medicare.
I’ll start by defining those relationships because the answer to this important question completely depends on which of those relationships you are in.
- You have No relationship with Medicare (you have not enrolled as a “Participating Provider” nor as a “Non-Participating Provider”).
- You are a “Participating Provider” with Medicare.
- You are a “Non-Participating Provider” with Medicare. (When you apply to enroll in Medicare, you can elect to be either a Participating or a Non-Participating Provider. I have also heard that there is a period at the end of each year in which you can apply to change your status from one to the other.)
I’d like to clarify something at this point: being a Non-Participating Provider is not the same thing as “Opting out” of Medicare. Similarly, if you do not participate with Medicare in any way (#1 above), this also is not the same thing as “Opting out” of Medicare.
When you hear about health care practitioners “Opting out” of Medicare, please know that this is an entirely different scenario than those described above and does not currently apply to Physical Therapists. At the time of this writing, Physical Therapists are not included in the list of practitioners who can “opt out” of Medicare (outlined in the Balance Budget Act of 1997 and Medicare Prescription Drug Improvement and Modernization Act of 2003).
So now that we’ve defined the different relationships that Physical Therapists can have with Medicare, let’s address the question at hand based on each of those relationships.
1) You have no relationship with Medicare:
In this situation, it is only okay to accept self-payments from a Medicare Beneficiary if it is for a service that would not be covered by Medicare. I’ll give details on non-covered services in a moment. This is the relationship I have with Medicare, and when I originally wrote the popular post addressing this question, I was only addressing this particular scenario. Please see this post for more details and especially for a number of great comments from readers.
2) You are a Participating Provider with Medicare:
Similar to above, if the service would normally be covered by Medicare, you cannot accept self-payment. You must bill Medicare directly for covered services provided to Medicare beneficiaries.
3) You are a Non-Participating Provider with Medicare:
You can accept self-payment from the beneficiary at the time of service, but you still must send in the claim to Medicare. Medicare will then send any reimbursement directly to the patient.
Note: As a Non-Participating Medicare Provider, you can bill the patient up to 115% of the Medicare Fee Schedule.
Three reasons that services are not covered by Medicare
So now we need to define which services are covered and which are not covered (and the scenarios in which covered services become non-covered).
There are three reasons that Physical Therapy services would not be covered by Medicare:
1) The first is called a “Statutory” reason. Two important examples of this are:
- When a service would be considered “prevention,” “wellness,” or “fitness.”
- When the Medicare Therapy Cap has been reached, and the patient does not qualify for an exception.
2) The next reason a service would not be covered is due to a “technicality.” An example of this would be a missing Physician signature on the Plan of Care. (Of course it goes without saying that you shouldn’t use this as a tactic to be able to collect self-payments from Medicare beneficiaries).
3) The third reason is that the services are not considered “reasonable and (medically) necessary.” Some examples:
- When a Medicare contractor will not cover certain commonly used treatments or modalities (like iontophoresis).
- When the service is considered “Maintenance” care. Let’s say a Medicare Provider has been seeing a patient for skilled therapy and the patient is no longer progressing. Medicare would then consider the services “maintenance” and would no longer cover them. You could then accept out-of-pocket payment from the beneficiary.
Advanced Beneficiary Notice
If you are going to collect self-payments from Medicare Beneficiaries, there is important information about Advanced Beneficiary Notices (ABN) that you need to know…
If you are a Medicare Participating or Non-Participating Provider and are going to provide services to a MC beneficiary that are not considered “Medically Necessary” (like the maintenance example above) or go beyond the therapy cap, then it is mandatory to provide the patient with an ABN before further treatment is provided.
The patient should also be informed of what the services will cost. On the ABN they sign, the estimate of the cost should be included on the form, and what they actually pay needs to be within $100 or 25% of the estimate.
Let’s explore an example based on the “Maintenance” scenario above. Once you have determined that the patient will be continuing treatment on a maintenance basis, you need to explain and have them sign the ABN. After the next visit with the (now cash-paying) patient, you will submit a claim to Medicare with a GA Modifier. The GA Modifier tells Medicare that you have an ABN on file for the patient, and also prompts them to automatically deny the claim. After doing this once, you do not need to continue submitting claims for that patient’s non-covered services. (Please note that this paragraph is directed at those practices who have a relationship with Medicare. If you are not enrolled in Medicare with a Provider number, you cannot submit in any bill … even one with a GA Modifier to get a denial.)
With all that said, whether you do or do not have a relationship with Medicare, it is best practice to always use a signed ABN with any Medicare beneficiary who will be paying out-of-pocket for your services (regardless of if the services are maintenance, fitness, post-therapy-cap, etc).
http://www.cms.gov/Medicare/Medicare-General-Information/BNI/ABN.html Gives you the current and detailed instruction manuals as well as the most up-to-date ABN forms accepted by CMS (at the time of this writing, CMS will only accept a particular ABN form: CMS R‐131)
http://www.advancebeneficiarynotice.net/ is a great site that gives a detailed overview of ABNs (in a slightly more understandable way) and also has the currently accepted ABN forms available for download.
Pricing for Self-Pay Medicare Beneficiaries
Now let’s briefly look at the pricing of our cash-based services in two different scenarios…
1) For the non-covered services of Prevention/Wellness/Fitness, you can price these services at whatever level the market will support.
2) When continuing care on a “maintenance” basis, you should not drop the pricing too far below the Medicare fee schedule. If you do price your maintenance services below the fee schedule, it is probably best if these discounts are given as “same-day payment discounts.”
I hope this post saves a lot of Physical Therapists a lot of time. With that said, I feel compelled to state again that I am not a lawyer and that any decisions based on this information should first be checked with an attorney. Medicare rules and regulations change frequently so it is quite possible that parts of this post could become out-dated and incorrect in the future. I will do my best to stay on top of changes, but I do not accept responsibility or liability for the accuracy of this information; and you should double check everything before acting on it.
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