It has been over five years since I started my cash-based practice in Austin and had to figure out the regulations on taking private-payment from Medicare beneficiaries. I originally published the article below about three years ago, and this is an editor’s note/addition (10-5-15) to what has become the most viewed article of this website.
As I have consulted with all types of PT practices through the years, I have had to figure out the Medicare regulations as they apply to any PT practice, and find the answers to a great deal of both common and obscure questions. All this information has eventually turned into a book:
Medicare & Cash-Pay Physical Therapy
– a Guide to the Rules and Regulations on Taking Private Payment from Medicare Beneficiaries –
Though the details of this topic span far beyond what you’ll find below, this article remains a very good overview of the subject and starting point to further exploration of cash-pay opportunities with Medicare beneficiaries.
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August 2012
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 PT 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).
Editor Note: Different components of the information below changed in 2013, so it has been updated to reflect current rules. Due to this, some of the comments for this post (prior to Dec 2013) may not make as much sense if they were based on the information that has changed. (12-3-13)
There are three reasons that Physical Therapy services would not be covered by Medicare:
1) The first is called a “Statutory” reason. The most important example of this is when a service would be considered “prevention,” “wellness,” or “fitness.”
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).
- As of 2013, the Medicare “Therapy Cap” coverage denial was moved into this “medical necessity” category. At the time of this writing, if you are a Participating or Non-Participating provider treating a beneficiary who has met the Cap, but you believe the PT services are still medically necessary, you cannot just begin taking self-payment from the beneficiary. You must submit the claims with a KX modifier (if it is between $1900 and $3700) and make sure your documentation supports the medical necessity. At $3700, there is a manual medical review process. You can only begin taking self-payment if you get to a point at which you believe (or Medicare decides) that the services are not medically necessary. Please note: before these services are provided on a self-pay basis, you must provide the patient an Advanced Beneficiary Notice (ABN). Please see the following document for great info on the use of ABNs in regards to the Therapy Cap: http://cms.hhs.gov/Medicare/Billing/TherapyServices/Downloads/ABN-Noncoverage-FAQ.pdf
Up until early 2013, “maintenance care” also fell into this 3rd category of services that Medicare was not covering (and we could therefore accept private payments from beneficiaries who were receiving our services to maintain a certain level of functioning). The Jimmo vs Sebelius case had an effect on how Medicare views and covers “maintenance” care. It is not the case that Medicare will now cover any and all care that would be considered “maintenance.” It’s a little more complex than that. To summarize the current cash-pay PT and maintenance care topic:
If physical therapy treatment/service is preventing or slowing a patient’s deterioration, and this service could not be provided/reproduced by non-skilled personnel (like a spouse, caregiver, etc.), then those services would be considered “covered services” (unless they fall into other non-covered categories like prevention, fitness, wellness), and you could Not accept self-payment from the beneficiary to provide them.
For more details on this topic, see this article that really goes into the details.
A Loophole?
The 2013 HIPAA rule changes contained some language that some Physical Therapists feel creates a “loophole” to the above limitations on seeing Medicare beneficiaries on a cash-pay basis. Before you get your hopes up, please see this article on the subject. Both ethically and legally, I believe the HIPAA rule changes only allow us to provide covered services on a self-pay basis in a very narrow set of circumstances, and that caution should be exercised if you plan to do so.
Advance 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 going to provide services to a MC beneficiary that may not be considered “medically necessary” then it is mandatory to provide the patient with an ABN before the 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.
If you are a Participating or Non-Participating Provider who has already been treating this patient: once you have determined that the patient will be continuing treatment that is not medically necessary, you need to explain the situation 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 PTs 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.)
When providing services that are never covered by Medicare, it is not mandated you provide beneficiaries with ABNs for these services, but you can certainly create your own written notice to inform them of what they’ll be receiving, what it will cost, and the fact that Medicare will not cover any part of those costs.
ABN Resources
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)
Again, please see the following document for info on the use of ABNs in regards to the Therapy Cap: http://cms.hhs.gov/Medicare/Billing/TherapyServices/Downloads/ABN-Noncoverage-FAQ.pdf
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.
Interested in the cash-based private practice model?
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I didn’t know we couldn’t opt out!
What are you writing on the ABN? “I’m not affiliated with Medicare?”
Since I have no relationship with Medicare, the ABN I use is not the CMS R‐131 that Medicare Par and Non-Par providers must currently use. My ABN explains that I am not a Participating Provider with Medicare and that Medicare will not cover services rendered at Carter Physiotherapy. Some ABNs say “may or may not” depending on the clinic and their association with MC, but since I’m not allowed to see MC beneficiaries for any type of normally covered services, mine says “will not.”
thanks for the information, jarod. since you have no relationship with medicare, and you don’t use form CMS R-131, what ABN form do you use?
thanks again,
tricia
If you don’t have a relationship with Medicare, then you need to create your own ABN somewhat fashioned after the CMS R-131. I can’t really post what mine says here, because it’s really something you should have checked by a healthcare attorney who is well-versed in Medicare Law … I wouldn’t want to be responsible for people just copying mine and ever running into problems in the future.
thank you, jarod. i appreciate the reply.
you write “if you do not participate with Medicare in any way (#1 above), this also is not the same thing as “Opting out” of Medicare.” Can you explain this please? All info I find for physician/practitioner never enrolled in Medicare MUST Opt-out, but then PTs cannot Opt out. I find nothing on CMS sites discussing the ability for a never enrolled PT to bill for statutory excluded services. -Thank You
Hi Lynn,
I only mention the “opt out” topic because many people think that PTs are able to do so. You obviously already know this isn’t possible. I think a key thing to consider is that just because PTs are not included on the list of practitioners who can “opt out” of Medicare, that does Not mean that Physical Therapists are all required to participate with MC. We can be associated with MC in two different ways (“Participating” and “Non-Participating”), or we can choose to not be associated with MC at all. If you are not enrolled as either a participating or non-participating MC provider, then you are not allowed to provide normally covered services to MC beneficiaries. Finding this information in the plethora of confusing online CMS information is quite difficult. Please let me know if this doesn’t answer your questions.
To beat a dead horse. If I have a patient who comes to me and says of his own free will ” I want to see you, I will pay cash, I don’t care to use my Medicare”
it is for bicipital tendonitis, a covered service. Is it illegal for us to treat him?
Thank you
Danielle
I can’t give legal advice but you may want to reach out to my Medicare attorney, Gwen Simons, who can. With the way you describe it, these are the ONLY types of Medicare patients we ever accept as patients … those who are adamant they don’t want MC involved and simply want to see us (and are happy to pay out of pocket for it
I am a cash based practice and non-participating status with Medicare. I have had Medicare clients that want to pay cash and do not care for reimbursement via Medicare nor want claims submitted on their behalf. They simply want to pay for services. In this scenario is there a specific ABN or “waiver” you have used in the past to maintain in the patient record.
Great post, Jarod.
You are a very clear writer and I appreciate the logical development of your presentation.
Also, you we’re able to present this subject without resorting to the standard “legalese” language we find in the Coverage manuals.
More of us need to be familiar and comfortable with the Medicare regulations because, otherwise, we cede this domain to predatory Medicare Auditors who make their living off of physical therapists.
Thank you,
Tim
I appreciate the kind words, Tim!
Thanks, Jarod! As you and I have discussed, this is a very tricky issue! I’m glad to see that the information I have managed to pull together matches what you have shared here. Thank you for providing a nice, concise summary.
Ann
You’re most welcome, Ann. It took a while but I finally feel that all my (and my readers’) questions were answered, and I could confidently create a more comprehensive overview … but with this topic, it probably won’t be long before the rules change and it’ll be back to the drawing board!
Hi Jarod,
Thanks for the great post on this confusing issue. It looks like the non-participating sounds like the best of both worlds if you wanted to go that route. Other than having to deal with the usual Medicare hassles, what other downsides do you see as being a non-participating provider?
It obviously would be great to not have to deal with it at all, but if someone is starting a new practice would you find it more difficult to get this pt. population to pay cash without having your credibility established yet and/or word of mouth referrals? Could consider dropping it as you build your practice.
Thanks for the comments and questions, Christine.
As for the downsides of being a Non-Par provider, you already nailed it … you still have to send claims to Medicare and deal with the myriad of hassles and costs associated with it; and you can only bill 15% more than the fee schedule. So I think the question is: “Is that extra 15%, and the ability to see Medicare beneficiaries for covered services, worth the hassles and costs of dealing with Medicare.” I’m guessing that most practice owners billing Medicare (Par or Non-Par) are paying someone to do so. If they’re not, they are likely spending way too much of their own time on dealing with Medicare rather than strengthening their clinical practice. That 15% is probably gone in a heart beat, so it probably comes down to your location and whether or not you can thrive without treating Medicare beneficiaries (if you’re viewing it solely from a business/financial perspective). For some PTs, they simply don’t want to turn away this population even if it means more work and less income to do so. I can completely understand and respect this perspective as well. It’s a multifaceted dilemma that each of us must answer based on our individual circumstances, needs, and desires.
I hope I’m understanding your second question correctly, but I wouldn’t suggest anyone start a new practice without already having some sort of reputation and word of mouth referrals available from former PT positions (regardless of business model and Medicare relationship). As for starting a new practice and becoming a Non-Par provider … I tend to think of the Non-Par status as a good stepping stone for an established PT practice to move from being a Participating Provider and wanting to pull away from 3rd party reimbursement. Since you’ll still have to set up and pay for billing, deal with audits, etc. I don’t see a huge advantage for a new practice owner going Non-Par vs Par; especially if you plan to drop provider status altogether. If you plan to build up a patient base that includes Medicare beneficiaries, it will be difficult in the future to have to tell them “I can no longer treat you for normally covered services.” It’s not quite the same as dropping and insurance provider and then telling those insureds “I can still treat you, but I’m now out of network and it will cost you more out-of-pocket.” I hope that makes sense. Let me know if I didn’t answer your question as you meant it.
Jarod was just reading another one of your articles and this question came up for me. I As I am building my private patient caseload under under my own business, I still work for a private OP clinic for extra money and I am considered a participating provider of Medicare at that clinic although I have not established that status for my personal business. Being that I am a provider for this company does that automatically make me an automatic provider for my company even though all of the information that Medicare has regarding me is under the private OP clinic’s name that I work for. Thanks again for all of your research and time.
Dana, When I applied for my Medicare Provider number, I had to be very specific about whether I was with a group, incorporated, sole proprietor etc… So, now that you are on your own, you will likely need to file your own Medicare Provider app so that you are able to get in the system as your own entity. I’ve work many places where I was also a Medicare Provider but that “number” does not follow me to my own private practice. Hope that helps.
Great question, Dana. And great answer Marcia! I actually wouldn’t have known how to answer that one before she responded. As with anything related to Medicare, I would double and then triple check with CMS … you’ll often get different answers every time you call.
Dr. Jarod… I have also found this link helpful https://www.cahabagba.com/part-b/enrollment-2/applications/provider-enrollment/
Marcia
Thanks again Marcia!
I understand that Medicare has now extended the caps on PT + ST services to include hospital outpatient clinics, not just for profit clinics. Apparently most patients choose to stop their services after they have exhausted their annual limit of approximately $1800 limit for reimbursed fees. They are allowed to continue with an appeal, but if denied, they are responsible for the full bill of about $300 per hour! However even with a successful appeal, they can only receive about total of $3500 for reimbursement of PT + ST fees annually.
This really makes me want to step in to offer a lower cost alternative for them to come to me when they have exhausted their annual benefit, to allow them to not have to stop for fear of HUGE bills for needed services.
It is hard right now for me to contemplate, however, charging the per hour rate you have stated in your book. I have been an hourly employee PT for 22 years. Any suggestions for the transition? I don’t want my fear of rejection of the rate by Medicare covered individuals who need / want to continue their therapy despite the cap to cause me to either cave and charge much much less than the market or to not make the leap because of fear that I won’t have enough business to sustain me if I charge that rate.
Thank you recommend being debt free, starting small and growing it organically. It is good to remember that I don’t have to start out in a clinic like I have grown accustomed to working in / supporting their choice for large facilities.
Thanks so much for the questions and for purchasing my eBook. My first suggestion would be to re-read the “Mindset” chapter a few times. Secondly, if you truly believe your services are worth $xxx/hour, then you should charge that even if you think prospective patients will balk at the price. If you want to provide services at a more affordable rate for beneficiaries who have exhausted their benefits, $100-$150/hour is still WAY lower than the $300 they may be paying elsewhere. If you still think you’d have a hard time getting that amount, you may consider other services that would still be beneficial and could bolster the bottom line with more volume … ex: group classes for Tai Chi, water aerobics (local indoor pools may not be expensive to rent per hour), etc.
The idea of marketing directly to Medicare beneficiaries who have hit the therapy cap is a very interesting one, and I think it could work (side note: if you will charging them less than the MC Fee Schedule you should probably do so in the form of a “same day payment discount” from the fee schedule rates). You can start slowly with a space you only pay for per session used (as described in the eBook) while still working elsewhere, and “test the waters” without risking too much money. Be careful about conflict of interest and make sure everything you’re doing is okay with your current employer. Legal issues get expensive fast … even if you didn’t do anything wrong.
Thanks Jarod-
Makes it easy to understand. Will def use it as a reference.
Jess
So glad I can help, Jess.
Let me start with stating that our practice does participate with Medicare. We have a liscensed massage therapist in our office, however she does not work under the supervision of a Physical Therapist, therefor I understand it that Medicare will not cover massage therapy in office? We have many Medicare patients whom are interested in persuing massage therapy as self pay, however I beleive this would be against Medicares guidelines? Is there anyway of getting around this, or can we simply not offer this service to a Medicare patient?
You would first need to find out if “massage therapy” is a “covered service” under Medicare. If it is not a covered service, then you should be able to offer it on a self-pay basis.
I have quick question as I was reading through. I am also stepping out on my own and have had many conversations with close physicians who understand and support my cash based model. However thy also ask how this applied to their patients who have medicare. I previously participated with medicare under my OP clinic but when I search for my own provider number cannot find myself listed. Does this mean that I have not applied and can then accept cash payments from Medicare? Also do you have the website URL for when to check for providers? Maybe I have the wrong site? Thank you for your book and really helping make this process so much easier!
Hi David, my best suggestion is to call CMS and ask them where you can find out if you’re currently a Participating Provider (based on your previous employment) … I don’t know of the specific url to check online but I’m sure they can point you in the right direction.
I am a physical therapist 20+ years, and soon to be personal trainer. I would appreciate any advice or resources on beginning a cash based business. The business would be based in the clients homes, not a typical clinic.
This site is full of advice on exactly that topic. You might also consider my eBook which explains exactly how I did it. The fact that you’ll be doing home-based visits doesn’t actually change much in terms of how you would market and grow your business. Make sure you check with your State Board for any possible rules or restrictions regarding your business/treatment plans.
Hi. I appreciate you helping figure this out. A patient at our clinic seems to be having reduced pain through mechanical traction. He receives that service along with other treatment three days per week. The patient requests more traction but we said that traction is not medically necessary over three days per week. He wants to pay privately for the other two days per week while receiving traction on the other days. Does this qualify as a service for which we can accept private payment?
If I were you, I would double check this with CMS, but as far as I understand it: yes, if you know that treatment beyond three times a week would not be considered medically necessary, and therefore denied coverage by MC, then you can accept private payment from the individual for those services. You would need to ask CMS how they want you to go about documentation/billing of those visits, since you’ll still be billing them for three treatments per week (I’m not sure if this would fall into the realm of utilizing GA modifiers for those extra treatments each week; and once you find out, please let us know how they have you go about it.) Thanks!
I understand that once a patient has maxed out their benefits @ mine or another facility that continued PT sessions are no longer reimbursed by medicare & as a PT we are now allowed to collect self pay from this patient. Correct? Is the rate we collect from this patient up to us (the one providing continued care) & no longer dictated by the Medicare fee schedule even if it is still skilled care? Is it mandatory to file for an extension or can we move right into billing patient directly once $1800 is reached?
Hey Lori,
I’m doing a big expansion of my Medicare and Cash PT e-book, and just realized I never answered your question. I’m so sorry this one slipped past me.
As of 2013, the Medicare “Therapy Cap” coverage denial was moved into the “medical necessity” category. At the time of this writing, if you are a Participating or Non-Participating provider treating a beneficiary who has met the Cap, but you believe the PT services are still medically necessary, you cannot just begin taking self-payment from the beneficiary once they’ve hit the initial cap. You must submit the claims with a KX modifier (if it is between $1900 and $3700) and make sure your documentation supports the medical necessity. At $3700, there is a manual medical review process. You can only begin taking self-payment if you get to a point at which you believe (or Medicare decides) that the services are not medically necessary.
Note: before these services are provided on a self-pay basis, you must provide the patient an Advanced Beneficiary Notice (ABN). Please see the following document for great info on the use of ABNs in regards to the Therapy Cap: http://cms.hhs.gov/Medicare/Billing/TherapyServices/Downloads/ABN-Noncoverage-FAQ.pdf
I can’t say that filing for an extension/exception (once the initial Cap is reached) is mandated, but I can say that the above is the legal advice I received.
As for the rates you charge the self-pay patient, I DO believe that you are still limited by the MC fee schedule allowable amounts (for skilled PT ‘covered’ services). If you are providing non-covered services like fitness or wellness, you can price them at whatever the free market will support.
Hi Jarod!
First off I love this site! It has helped dramatically shape my practice as a sole practitioner accepting only cash for services. I do have a question regarding what I was told when I called CMS.
They told me that I have no individual participation with Medicare. They also stated that it was mandatory for me to fill out the necessary application forms and “declare” myself as participating or non-participating provider. I asked 2 times for clarification regarding my provider status and she continued to state I had to select either/or and could no remain as I am currently as “NO relationship”. Is this something others or yourself have encountered as well? Any help would be greatly appreciated!
Sincerely,
David Martin
Thanks so much for the kind words. I’m excited to hear this site has been so helpful for you and your practice.
If you call CMS 10 times with any given question, you’ll likely get at least 4-5 different answers 🙂
They cannot (at least at the time of this writing) force any of us to create a relationship with Medicare. As I describe above, you can have no relationship or you can choose to be either “participating or non-participating” (both of which are a type of relationship with MC).
If I have no relationship with Medicare, can I provide PT care to a Medicare patient for free?
Great Question, Jeff. I actually need to defer you to the attorneys at the APTA on this one. I would guess the answer is yes, but it would be a guess. Let us know what you find out.
If I am already a participating provider and want to change to “no relationship” with Medicare, how do I go about that? All I can seem to find is the “opt-out” form that will not do me any good as a PT anyway. Thanks
Updating my original reply:
Check out: https://pecos.cms.hhs.gov/pecos/login.do
Scroll down to “Enrollment Tutorials” and find the bullet point that says, “Deactivated.” There you can download a video tutorial explaining how to deactivate a current enrollment. You can also terminate your enrollment via this form:
http://www.cms.gov/Medicare/CMS-Forms/CMS-Forms/downloads/CMS855B.pdf (See Page 5)
I believe you can also change your status with Medicare during the open enrollment period… I.e. change from participating to non-participating, but this of course would not be a full deactivation/termination of the relationship. Go to the same link above to find guidance on how to do so.
… and congrats on your decision!
Thank you very much for all your research and website. I am in the process of starting a cash-based practice and have learned allot from you! I’m certain to have questions & will not hesitate to make contact. Thank you again!
You are most welcome! Thanks for commenting
Jarod,
Your website is very helpful. I am currently looking in to starting my own cash based PT clinic, but I’m still a little confused about Medicare. If I decide to have “no relationship” with Medicare, can I only “treat” Medicare patients for wellness and maintenance? (Therefore no manual therapy etc)? Can you expand on what type of treatments you can do with these patients if you have “no relationship”?
Also, I am still currently working for another private practice, and as such, I have a NPI with Medicare. Is this something I can easily change once I start my own? And, along those lines, will I need provider numbers for any other insurance companies since I will be cash based (in order for the patient to try to submit reimbursement)?
Thanks!
Yes, I have the same question as Mary and Rick in this part of the post, Jarod. If you have no relationship with Medicare, it sounds like you are seeing these patients still, so why the modified ABN, and what do you do with them that justifies services that I assume would not normally be covered as “physical therapy” by Medicare?
Hi Beth,
Thank you for pointing out Mary and Rick’s questions above… I didn’t see them come through so they were sitting there unanswered. Please let me know if my answers above do not fully answer all of your questions. Thanks again.
Hi Mary,
I’m afraid your comment slipped past me (approved by my assistant) and I just now saw it here… so sorry for the delayed reply. you should be buying to provide Medicare beneficiaries with services that would be defined as prevention, fitness, and wellness. “Maintenance” care unfortunately (for cash-based practitioners) is now a covered service in most cases: https://drjarodcarter.com/self-pay-maintenance-care/
I rarely see Medicare beneficiaries at my clinic due to the limitations we have on what can be provided on a cash pay basis. The only times I provide services that would not be defined as those described above, are the times in which I am able to utilize the changes in the HIPAA laws: https://drjarodcarter.com/cash-based-medicare-hipaa-loophole/
In order for patients to submit your your receipts for self claims, you will need an NPI number on the receipts, but this is a different thing than a Medicare provider number. If you currently have a Medicare provider number, I believe you can un-enroll from Medicare here:
check out: https://pecos.cms.hhs.gov/pecos/login.do
There’s a link by “deactivated” that gives a video tutorial explaining how to deactivate a current enrollment. You can also terminate your enrollment via this form:
http://www.cms.gov/Medicare/CMS-Forms/CMS-Forms/downloads/CMS855B.pdf
I believe you can also change your status with Medicare during the open enrollment period… I.e. change from participating to non-participating, but this of course would NOT be a full deactivation/termination of the relationship.
Hope this helps!
Jarod,
Since you are not enrolled in Medicare and can’t treat Medicare patients for covered services, why have you created your own ABN? You can only see Medicare beneficiaries for services that are statutorily non-covered by Medicare. Are you just doing it to inform the patient on a voluntary basis?
Hi Rick,
Like Mary’s comment above, I’m afraid your comment slipped past me (approved by my assistant) and I just now saw it here… so sorry for the delayed reply.
Yes, I voluntarily provide them with a form that explains my status (or lack thereof) with Medicare. I think it’s important for them to know the situation very clearly and what they will be responsible for paying, but you can’t use the CMS R-131 form if you are not a participating provider.
2 burning questions:
1) Has the government ever prosecuted a PT for providing covered services for cash for a Medicare beneficiary?
2) If a PT is a Non-Participating provider with Medicare, he/she can bill the patient directly for 115% of the MC fee schedule. Does said PT have to also submit the G codes and PQRS codes in this scenario?
1) I’m not sure
2) This should be outlined in the info received when enrolling/changing status to a Non-Par Provider … since you are still required to submit the claims directly to MC as a Non-Par Provider, I imagine you still have to submit in the same way Participating providers do. However, I’m not totally sure on this one because I’ve never been a Non-Par Provider.
1. Whether or not the government ever prosecuted a case isn’t the point. If a Medicare beneficiary requires physical therapy services, the physical therapist must be an enrolled Medicare provider.
2. Since you are submitting claims to Medicare and the Medicare program is paying 80% of the 95% of the allowed amount, G-codes and PQRS reporting is still required.
One very good PT in a local clinic is not seeing medicare patients at all after reading the ebook. My question is: what if a patient is only signed up for Medicare part A and does not have part B or C? Why does that constitute a problem for her if the maintenance patient is paying cash &/or has a private insurance plan. Part A, as I understand it, is aimed solely at inpatient, hospice and home health only. Is there a problem for her in this case? Does she even need to deal with medicare at all? Thanks!
I’m still waiting to hear back from my legal resources on this one but it’s taking forever. What are the instances in which people only sign up for part A but Not part B? Is this common?
If they have no Part B benefits, then they do not have Medicare coverage for outpatient therapy services.
Hi Dr Carter, I am planning on opening up my own company that will specialize in providing Constraint Induced Movement Therapy only. I was planning on being strictly private pay and not signing up to be a Medicare Provider, as at this time Medicare does not cover the cost for CIMT. I think I am a bit confused with the 2 options of being a provider or having the relationship but opting out. Do I need to do this, or can I open doors without this relationship with Medicare. I live in Colorado. Heather
If you are sure that the services you are providing would not be considered “skilled physical therapy” (and they very well could be simply because you are a licensed physical therapist providing “movement therapy”), then you should be fine to simply have no relationship at all with Medicare. If you are not already set up to bill Medicare, being a non-par provider is often a lot more hassle than it is worth because you still have to bill Medicare directly and deal with all of their paperwork, audit risk, etc.
Just to clarify, a physical therapist can’t opt out of the Medicare program. You must enroll in the Medicare program. When enrolling, you have the option of choosing to be a participating provider or a non-participating provider. The amount you are paid by the Medicare program is different depending which option you select and if a non-participating provider, the Medicare beneficiary would have a greater cost share to pay.
I don’t think it was meant in this way, but just wanted to clarify so that no one reading this gets confused or perceives it incorrectly. The statement, “You must enroll in the Medicare program” is not correct by itself. I think what you meant to say is that you must enroll in the Medicare program if you are going to provide covered services to a beneficiary. Right? At the time of this writing, no one is forced to join the Medicare program. We can still choose to have no relationship at all with Medicare.
Hi Dr. Carter,
Thank you for all of the thorough information you provide and the time you take to answer questions. I feel empowered knowing others are pursuing the same path of a cash based practice!
I have just started my practice with a niche of treating urinary incontinence. My clients are of the age demographic where it is necessary for me to deal with Medicare, but be out of network/cash for all other patients. My question is regarding non-par status with MC. My understanding is that the patient will pay the entire fee up front and that I am allowed to charge 115% of the physician’s fee schedule. I then submit the claim to MC and they reimburse the patient after knocking the bill down by 5% (they pay 95%) If they deny part or all of the claim submitted, will I have to refund the amount denied to the patient? Also, if they deny part or all of the claim, am I allowed to appeal as a non-par provider? I am trying to decide if par or non-par status is best for me for my MC patients.
Thanks!
Hi LeAnne,
So sorry for the delayed reply. I wish I had clear answers to this question, but since I’ve never been a non-par provider I really have to defer you to an attorney, or the attorneys at the APTA. I already have a number of questions in to them for which I am awaiting answers, and I fear I may be cut off if I send much more before I hear back from them 🙂
Once you get some answers, please leave a follow-up comment to let us all know what you find out. Thanks so much for your question, and I’m so sorry I’m not able to give you a clear answer at this time.
Hi! I have a cash based practice as well and have no relationship w Medicare. I have a referral for a patient who is receiving PT 2x/ week and wants an additional session with me in their home for myofascial stretches. This third session w me would not be considered medically necessary. However he does have chronic impairment in gait. Should I wait until be has reached his cap? Or see him for fall prevention / myofascial wellness on a cash basis? Thanks!!
Hi Dena,
I apologize for the delayed reply. To me it sounds like his decision to request your cash-pay services was of his own free will, so this may be a scenario in which you could discuss with your attorney whether or not the HIPAA law changes might allow you to see him and provide skilled services.
If the services are truly not medically necessary, and could be classified as wellness, fitness, or prevention, you should be fine to provide him with those services.
When it comes to MEDICARE ADVANTAGE plans, do you know or anyone else know if patients are able to send in their own claims for reimbursement? Has anyone had experience with a patient doing this, and if so, what were the results?
It totally depends on the Advantage plan … some allow it and some do not. Before providing covered services to any of these patients, you need to confirm that you are okay with providing covered services on a cash-pay basis.
I have a question about USPSTF recommendations and reimbursement. If a service/ intervention receives an A or B recommendation, insurance companies are to pay for these service according to the Affordable Care Act. I believe since both the ACA and Medicare are sponsored by the government, we should be able to get reimbursed for providing services based on USPSTF recommendations. Is this correct??? Thanks for your help and thanks for your site!
Carl Greenwood, PTA
Thanks for the question, Carl, but I have no idea if this changes any of the above information or affects the rules regarding covered services, etc. I visited the USPSTF website but couldn’t find any information that would quickly help me give you answer. The best thing to do would probably be to reach out to them directly with your question.
This is all very good information for PTs starting a cash pay business. I’m an OT however, and am seeking the same information about Medicare patients and self-pay. My specialties are equine assisted therapy/Hippotherapy and myofascial release – I do think I can fall under the wellness prevention category for sure with this, but want to make sure the same applies for OT as well as PT. Do you have any information on this? Everything I have found so far is for PT. Thanks in advance for any assistance/advice!!
I wish I could say this applies to OT as well, but I have no idea … getting all this straight just for PT has been a huge and ongoing undertaking in and of itself. One thing I can say is this: if no one else has created a cash-based OT and Medicare guidelines ebook/document, you should do it and sell it. It is useful and needed information for your colleagues and they will be happy to pay for it in order to not have to do the leg work themselves.
Thanks for this great info! What about those with ASAP medicare, humana medicare, etc? Would this still apply to them or not? What about other government insurances such as Tricare and medicaid? Thanks!
….AARP medicare, not asap.
Does anyone know what the penalty is if a physical therapist does care a Medicare beneficiary without informing Medicare? Parient will sign “my” ABN stating I have no relationship with Medicare. This is very confusing but I don’t understand why Medicare cares if I charge a Medicare patient and don’t ask them for money. seems like a win/win.
Please help! I even paid a healthcare attorney 300 d to clear things up for me and he can’t answer my question.
Well, I’m a little late to the party but I’ve been researching Medicare as it relates to small, cash-based PT practices (I’m a second-year student, currently taking an administrative issues class, and I hope to open my own practice someday). I wonder about another potential loophole: What if PTs who have no relationship with Medicare were to bill cash for skilled PT that is, by design, outside of the parameters in which Medicare would cover the service? For example, providing therapeutic exercise or manual therapy for a patient’s medically-necessary impairment but doing so as part of a home visit (for a patient who does not meet the Medicare criteria for home health). Or, another example, taking a direct access patient and not having a physician sign off on a plan of care. Do you think this would meet the letter of the law and allow a PT to accept cash payment for skilled therapy from a Medicare beneficiary? Is this another creative “opt out”?
I like the creative thinking but unfortunately neither of those would be legally okay…
I believe that in the past, a patient had to be considered “homebound” in order to receive covered home health services. However, that no longer appears to be the case. When this question was asked of legal authorities on the subject, the response was something along the lines of:
“If a patient is not ‘homebound’ but that patient needs skilled therapy, a private practice physical therapist can provide services to that patient in their home and Medicare would still consider them ‘covered services’. When billing Medicare, the site of service would be the ‘patient’s home.'”
So if the services would be considered skilled therapy and medically necessary by Medicare, you would not be able to provide them on a cash-pay basis, even in the situation you describe in your question.
In your second example, purposely not getting the POC signed so that the services aren’t ‘covered’ is not a legal option.
Too bad! Thanks for the reply.
Thank you for the information, it was a great help to me when I was setting my own cash based practice. Does the same rules pertain to patients with Medicaid?
The rules on Medicaid change from state to state so that’s not a question I can answer
I have a question. My dad has been going to physical therapy but as of this past week the therapists wife has been seeing him. She is a tai chi teacher. He enters through a different door in the building and never sees the therapist but they are still billing Medicare. Is that legal?
Thanks for taking the time to leave a question, Carol, but unfortunately I would need to know for more details to be able to answer your question; and it’s likely you would not know most of those details if you were not working at that clinic.
I’m confused as to what happens at $3700 now bc their does not seem to be manual medical review going on… Something about the RAC auditors and their contracts so they are auditing only hospitals at the moment? The issue is that I need Medicare to deny my claims at 3700 so patients can pay privately (they’ve signed an abn) but the denials aren’t coming and mcr continues to pay. I have 1 pt who has medical necessity, the other is maintenance. Any thoughts?
If the patient has requested of their own free will to go private pay, and signed ABN/private contract, you may be fine to continue on a cash-pay basis (but this needs to be confirmed with your attorney)
I’m not sure what’s currently going on with the Manual Review process and RAC auditors.. this stuff changes all the time and speaking directly with Medicare is (unfortunately) the best way to get an answer to that question
Sorry about the poor grammar
Great stuff about Cash Based Physical Therapy. I like it very much. This post is very helpful for every physical therapist. Thanks for sharing.
Patient has exhausted Medicare benefit for this episode of care. Patient would like to pay privately by check. I will give an invoice monthly. What do I call this type of program so that it is not reflective of physical therapy? Fitness Exercise Program? Or Welness Exercise Program?
I bill for a Physical Therapist that strictly a NM Medicaid home based provider for mostly developmentally delayed children and adults. We were informed by Medicaid that one of our patients was put on Medicare (dependent coverage) almost a year ago. (I do not know if the family even knew until lately). Medicaid has recouped their payments and is insisting we bill Medicare for all the services over the past 11 months and then bill them for the services after we receive a Medicare denial. We do not have a relationship with Medicare. My question is how should we bill this to Medicare or should we even try? I suggested to the Physical Therapist to stop seeing the patient and refer him to a Medicare provider. She really wants to continue to see this patient but will not become a Medicare provider. She seems to think we can just bill to Medicare, get denial and bill to Medicaid for reimbursement. In most cases, Medicaid will not pay if the denial is something other then “patient has no PT benefits with Medicare”. I cannot even figure out how to bill Medicare to assure it is processed properly. After hours of reading and searches I still cannot get any answers. We are not a CORF, just a group of therapists that do home based services for the DD community on Medicaid. What would you suggest we do….. Thank you in advance!
Hi Jarod,
I am a physical therapist with 20 years experience. I am also a Pilates instructor. I am reading these discussions and trying to do some research because I do want to move into a practice of rehab Pilates with expertise of a physical therapist. I do not want a primary physical therapy practice but some of my clients may require the expertise, consultation and services that a physical therapist might provide. I want to use Pilates as my vehicle for rehab. I have several questions. First, I would like my practice will be self-pay without insurance reimbursement offered or expected. In this scenario, would I have to worry about anything that Medicare or other insurance requires? I am asking this because although I will not be primarily offering physical therapy services, I will have an active physical therapy license.
Second, per my status at past jobs, clinics and hospitals, I am a Medicare provider and I have an NPI number. I would definitely want to make sure I change my status and have no relationship with Medicare. How would I go about doing this?
Lastly, as a provider of fee for service rehab Pilates, I am wondering what kind of documentation is required, if any?
Thank you for your input and expertise to my research. I look forward to reading your comments.
Lots of questions that would need follow up information and questioning to make sure I’m providing correct info.. if you’d like to set up some consultation, send me message via my contact page: https://drjarodcarter.com/contact/
I am a PT previously enrolled as a MC provider but because of a conviction for a non-health care related home owners insurance issue, my MC billing privileges have been revoked and I am blocked from MC re-enrollment. So I am no longer a MC provider and I am blocked from MC payments. Do you have any insight about me providing cash based PT to MC patients?