One of the most common, and important, questions I am asked is some variation of: “Can I accept out-of-pocket payments from a Medicare patient?” The very short answer to this is: “it depends.”


Working with Medicare patients on a Private-pay Basis

Some Physical Therapists may assume “If I’m solely a fee-for-service practitioner and a Medicare beneficiary wants to see me and is happy to pay me out-of-pocket, that’s their choice and I should be able to take that payment.” But everyone knows what happens when you assume …

[Please Note: The information in this post is specific to 100% Private Pay Physical Therapy practices which do absolutely no billing to Medicare.

A full overview of this topic that includes Medicare Participating and Non-Participating providers can be downloaded for free here.

With that said, this post has a number of ideas and great comments/questions below that you should make sure to read if you are interested in Cash Based PT]

I received most of this information from an organization which prefers its staff not be referenced or quoted. Just to be safe, in case my interpretations are not perfect, I am refraining from identifying the organization at all, though I imagine you can guess which one it is.

It took quite a while to get clear answers about all the components of this topic. To be honest, some answers could use further clarification—but I sensed I had thoroughly annoyed the ‘answer people’ and could tell I’d be burning bridges if I continued the barrage of emails. Even so, I gathered quite a bit of info, and it should serve as a decent guide for us.


Basic Medicare guidelines for a cash-pay practice

If a non-enrolled Physical Therapist provides services to a Medicare beneficiary that would normally be covered by Medicare, he/she is required to bill Medicare directly and is not allowed to accept self-payment for these services. The Social Security Act has a mandatory claims submission requirement, so a Physical Therapist cannot choose to not enroll in the Medicare program And collect cash from  a Medicare beneficiary.

If the service is “non-covered” (e.g. “prevention, wellness, fitness”), then a Physical Therapist can collect out of pocket payment from the beneficiary; but only in those circumstances.

When you hear about health care practitioners “opting out” of Medicare, please know that this is a actually a different scenario than that described above. Physical Therapists are not included in the list of practitioners who can “opt out” (outlined in the Balance Budget Act of 1997 and Medicare Prescription Drug Improvement, and Modernization Act of 2003).

However, this does not mean we are required to accept Medicare beneficiaries as patients. It is always our choice as to who we accept as a patient; but if that patient is a Medicare beneficiary then we can only accept self-payment from them if the services are considered “non-covered” by Medicare.

With this information, I then investigated these “non-covered” services with the labels “prevention,” “wellness,” or “fitness.” More specifically, how do we know for sure when we can say we are providing this type of service?

Based on the answers I received to this question, it sounds like it is largely left up to our professional judgment. Of course that judgment should be very specifically backed up with solid documentation. If you can document that the patient is not at your clinic due to a specific pain/injury/dysfunction, but rather to maintain a certain level of wellness/strength/fitness or prevent issues such as falls or health decline, then you should be able accept out-of-pocket payments from them.

What if the patient has reached/exceeded their therapy cap? Can I then accept cash payment from them even if it is for services normally covered by Medicare? I was told that if there is not an exceptions process in effect, you can accept self-payment in these instances.

If a cap exception process has not been attempted, you should obviously inform them of this possibility.

To get the whole, and most up-to-date, story on this topic PLEASE also read:


The Cash PT & Medicare Quick Start eBook. It’s completely FREE and gives a full overview of this entire topic


Also see some other Medicare-related articles:

Update on Cash-Based Physical Therapy and Medicare – Part 1 – A HIPAA Loophole


So what does all this mean for a cash based PT practice (that is Neither a Participating Nor a Non-Participating Medicare provider)? It means that although you cannot take self-payment for therapy that would normally be covered by Medicare, there is a whole world of cash-pay services you can legally provide to this patient population.

Over time, I will expand on some specific ideas for such services and programs.

This is an article in which I feel compelled to repeat the disclaimer on this site: You need to verify anything stated on this site with your own professionals and do your own due diligence when making decisions. Plenty of what I said above could easily be misinterpreted and misused, so I assume zero responsibility in your use of this information.

I’m not trying to downplay the validity of what I’ve written … it took a lot of time and research to compile this info and I feel confident in my understanding of this topic. I’m just making sure to cover my legal bases, and ask that you always double check everything before acting on it.

With that said, if you appreciated this article and all the questions it answered, please share it with your colleagues below.

If you want every last detail on medicare and Cash-pay physical therapy, check out the full length guide book here.


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