Two changes in the Federal Laws/Rules have taken effect in 2013, and have important implications for seeing Medicare beneficiaries on a private-pay basis (for “covered” physical therapy services). In this two-part series, we will look at:
- HIPAA Rule changes and whether or not it created a “loophole” that will allow physical therapists to treat Medicare Beneficiaries on a self-pay basis
- The Jimmo v. Sebelius federal case and its effect on our ability to accept self-payment for “maintenance” care with Medicare beneficiaries
This is gonna be interesting …
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2013 HIPAA Rule Changes – Can Physical Therapists Treat Medicare Patients on a Cash-Pay Basis Now?
There was a recent stir on Twitter regarding a possible loophole to get around the fact that physical therapists are not included in the legislation allowing us to “Opt Out” of Medicare. When I first read about this topic, it certainly perked my ears up. Could the Final HIPAA Omnibus Rule changes really give us the ability to see Medicare patients for “covered” services but take out-of-pocket payment from them directly? I didn’t want to weigh in on the article, or the Twitter chatter, until I really researched what was going on and even received some legal consultation on the subject. So let’s dive in.
Before getting into my opinion and conclusions about all this, let’s take a close look at the language in HIPAA itself. As part of the Dept. of Health and Human Services’ (HHS) aim to give patients greater control over how their protected health information (PHI) is utilized and shared, they have now given patients the right to restrict certain disclosures of PHI to a health plan when the individual (or any person other than the health plan) pays for the treatment out of pocket in full.
The segment of the new HIPAA rules we are analyzing is the second half of page 5628 of the Federal Register, Vol. 78, No. 17 (page 64 of this PDF: http://www.gpo.gov/fdsys/pkg/FR-2013-01-25/pdf/2013-01073.pdf) I would suggest reading it carefully a few times. Specific to our topic, the new HIPAA rules state:
“With respect to Medicare, it is our understanding that when a physician or supplier furnishes a service that is covered by Medicare, then it is subject to the mandatory claim submission provisions of section 1848(g)(4) of the Social Security Act (the Act), which requires that if a physician or supplier charges or attempts to charge a beneficiary any remuneration for a service that is covered by Medicare, then the physician or supplier must submit a claim to Medicare. However, there is an exception to this rule where a beneficiary (or the beneficiary’s legal representative) refuses, of his/her own free will, to authorize the submission of a bill to Medicare. In such cases, a Medicare provider is not required to submit a claim to Medicare for the covered service and may accept an out of pocket payment for the service from the beneficiary. The limits on what the provider may collect from the beneficiary continue to apply to charges for the covered service, notwithstanding the absence of a claim to Medicare. See the Medicare Benefit Policy Manual, Internet only Manual pub. 100–2, ch.15, sect. 40, available at http://www.cms.gov/manuals/Downloads/bp102c15.pdf. Thus, if a Medicare beneficiary requests a restriction on the disclosure of protected health information to Medicare for a covered service and pays out of pocket for the service (i.e., refuses to authorize the submission of a bill to Medicare for the service), the provider must restrict the disclosure of protected health information regarding the service to Medicare in accordance with § 164.522(a)(1)(vi).”
At first glance, this looked like it could be legal way for PTs to provide “covered” services to Medicare beneficiaries and accept out-of-pocket payment for those services; and in some cases, I believe it is. However (and this is a big “however”), there is a key segment of the language that should not go ignored, and upon consultation with a certain professional organization that will go unnamed here, they too confirmed it is important to consider the meaning of the words, “of his/her own free will.”
I think that even without this “free will” wording, we would all still have an interesting ethical decision to make about how routinely we would use this clause to collect self-payments from Medicare Beneficiaries. But ethics aside, and looking at the wording through a legal lens, the language makes it pretty clear that it would be problematic if CMS or HHS perceived that patients are being influenced or pressured to “refuse to submit claims” in order to obtain treatment. It is my opinion that physical therapists could be putting themselves at risk if their standard policy with Medicare beneficiaries is to present them all with paperwork stating that they refuse to allow the physical therapist to submit claims to Medicare.
With that said, it is not uncommon that I get a calls from Medicare beneficiaries seeking my treatment, who state (before I mention the fact that I’m not a Participating Provider with Medicare), “I know you don’t take Medicare or insurance, but I want to get treatment from you anyhow and just pay you out-of-pocket.” In these specific situations, it is pretty clear that the patient is making that decision “of his/her own free will,” and I would then explain that in order to receive treatment at my clinic, they would need to sign something expressing what they just said and that they do not want claims submitted to Medicare.
So my personal conclusion is as follows: I, as a cash-based practitioner, will only be utilizing this HIPAA rule change to see Medicare beneficiaries for covered PT services in the narrow instances where the prospective patient preemptively states that they do not want to bill Medicare for their treatments.
As I often say, I am not an attorney so this is simply my opinion. In no way am I making suggestions about how everyone else should interpret and use (or not use) these changes in the law. You and your attorney may come to very different legal (and ethical) conclusions than I have.
So now I would really like to hear what everyone else out there thinks about this. This is a hugely important topic and one that obviously has some room for different interpretations. Please share yours in the comments below and share this post with your colleagues so they can join the conversation.
Thanks for reaching out Jarod. I’m happy to provide my two cents as helpful or ‘unhelpful’ as they may be to some.
I think your interpretation of the rule is a sound one. At SPARK we often hear folks say almost those exact words; “I know you won’t bill Medicare or insurance companies but…” and in this case, adding the simple legal jargon to your boilerplate intake/registration/history documents would be a simple solution that could save you and your staff from ethical or legal recourse.
Note, I am not claiming to have any expertise on this rule change nor the rule as it stood in the past but another “loophole” that is created when cash practitioners offer ancillary services in their clinics is one that we have taken advantage of for some time: That is the ability to see a client as a strength and conditioning professional, a trainer, a nutritionist, or other related subset of the highly skilled care we deliver that has no such Medicare or other insurance related regulation that would prohibit a well informed and motivated client from receiving services that would improve their quality of life.
In a recent conversation with a physical therapist that was curious about some of the perils of starting her own cash PT practice, I mentioned some of these ancillary and complementary services as excellent additional revenue and client streams. She had never thought of such a synergy between what we are capable of and what the health seeking public is looking for. I believe if we remain creative and continue to act as resources to each other, just as you did with this post, we will continue to be empowered to deliver the care and VALUE that we strive for.
Best,
Carlos
Thanks so much for your input, Carlos. I really appreciate your consistent focus on “Value.”
One question about your comment:
Regarding the professionals in your practice who are seeing patients for “personal training,” “nutritional counseling,” etc … Are they personal trainers, registered dieticians, etc. or are they physical therapists utilizing their knowledge in those areas, but claiming/documenting the services as non-PT services?
In our setting all PTs are also certified trainers and/or certified strength and conditioning pros. While performing these services we always adhere to the highest standards of practice and professionalism. Frankly because of our skills and the depth of our knowledge as therapists I’m confident in saying that there are few pros that can provide these services at a higher level than our clients experience.
Yes, if it’s purely “fitness” or “wellness,” as far as I understand it, we are able to provide these “uncovered” services to MC beneficiaries on a self-pay basis. But definitely be careful that there is no overlap of what is provided (on a cash-pay basis) that would be considered “skilled physical therapy” … you could run into issues there.
Thanks again for your input and great ideas!
Do you use the standard ABN form for patient to state they do not want claims sent to Medicare or do you have a separate form or do you have them document and sign their own letter? Thank you. I have patients who ask for exercise and massage that is not for medically necessary skilled PT. I want to accept their cash. I am a Medicare participating provider. Thank you
Jarod, Great post and your reasoning seems sound. As you may know, my goal is to be cash based in 1-2 years, and my first step was to stop seeing medicare patients. However, I was only seeing 3-4 a year, most of them who fell into that demographic had some sort of private insurance medicare plan. The local HMOs do not follow the same rules and all cover us with direct access in my area. I can only state again that your reasoning is sound, but I’m sure some CMS muckety muck will state something like this only applies to MDs… etc and PTs were not even considered in this ruling.
Thanks Erson! Seems like if you call CMS 10 times to ask the same question, you’ll get 7-8 different answers 🙂
I really feel like CMS is trying to fix a loophole here not create one. Here’s what I mean: from a monitary stand point Medicare should not care if covered services are paid for out of pocket. Medicare does want to protect the consumer by not allowing them to be charged out of pocket for services that they have already paid for by being eligible for Medicare. Many Medicare consumers are educated enough to understand that they should be able to choose to pay out of pocket for what they feel would be better care and not be forced to receive less quality care from a covered provider. The key is that they must choose to pay out of pocket and I think this can be accomplished with a well written document for for ALL Medicare patients. My question would be if the companies that contract out Medicare claims review/management would allow PT’s to accept out of pocket payments since it would essentially take money out of their pockets as managers of Medicare insurance in each State.
Hi Corey,
Thanks so much for your input. I wanted to respond to a couple of your points with a little clarification/feedback, based on the legal consultation I received on this topic…
You stated “Many Medicare consumers are educated enough to understand that they should be able to choose to pay out of pocket for what they feel would be better care and not be forced to receive less quality care from a covered provider.” Yes, they absolutely Should be able to make this choice, but I just want to reiterate that before this HIPAA Rule change, they could NOT choose to see a PT for covered services on an out-of-pocket self-pay basis. They could request to do so (of their “own free will”), but the PT would have been breaking the law if they agreed to. This law change is the first thing that has actually given them this choice, and given physical therapists the right to accept their requests to pay out of pocket for normally “covered services.”
You also stated, “The key is that they must choose to pay out of pocket and I think this can be accomplished with a well written document for for ALL Medicare patients.” Unfortunately, this is exactly what I was told could get you into trouble. I’m not saying that you can’t write such a document, explaining the options to all your Medicare patients; but the danger here is that CMS could view such a document as an attempt to influence beneficiaries to make the choice to refuse submission of bills directly to Medicare. I guess it would really come down to how it was worded and presented to the patients, but in general, I would be very careful about giving every Medicare patient paperwork like this. They could easily claim that if you are presenting the option to them before they ask for it themselves, it is not “of his/her own free will.” It’s tricky semantics, but I’m just trying to pass on what I learned in my research of this topic.
Just my two cents … though I tend to be a lot more conservative and cautious with this stuff than many of our colleagues. In the end, it is each individual’s decision on how he/she wants to interpret and use (or not use) these rule changes.
Jarod,
I’m surprised you’re comfortable with a Medicare patient preempting you verbally about understanding you have no relationship w/ Medicare and wanting to pay cash for your services, but you’re not comfortable with them signing anything out of fear it will come off as pressuring them to pay you cash for services. That means you’d be providing them w/ covered services and there’s no documentation to support this “free will.” How are you protecting yourself in the event of a Medicare audit?
Hi Kristin,
I DO have him sign something in my office, but it’s not a document I feel comfortable sharing here, because everyone’s situation is different and people may use it differently (which can have a lot to do with how things play out legally). Since the subject touchy legal area, I have to be extra careful.
Jarod,
Why not just use the exact wording in CMS’s “clairification”? I don’t see how you could get into trouble if your “form” only contained information provided by Medicare in “their” own words. Yes this is semantics but technically there is no such thing as free-will as all of our choices are based on the multitude of information we process and can be influenced both by information we have or information that is withheld.
On a side note…I would like to see more cash based posts on pro-bono work as when I read the comments of PT’s in fee for service models they always boast of the “new” client who is motivated to get better. Not only are these patients paying for services but they can afford to pay. I understand that these clients are not all “rich” but I feel the market of cashed base clinicians would do themselves a huge favor by balancing “concierge” medicine with equal parts of providing the same high quality service for the poor and less fortunate. Sorry for the rant.
Which CMS “clarification” wording are you referring too? I can’t really respond unless I can read what you are referencing.
On the pro bono side of things… I occasionally do pro bono sessions. There is certainly nothing wrong with doing so or keeping any PTs from providing them, cash-based or not.
Jarod,
Great post! Very deep.
This is a very murky, grey and mottled topic with no clear path and one in which we each need to choose based on our own ethical standards and interpretation of the information available to us. I personally have had different answers from the same national level Medicare advisor. I’ve basically been told that I can’t even breathe on or look at a Medicare beneficiary by a state level advisor. I’ve had a therapist tell me that I shouldn’t worry about treating Medicare beneficiaries for any issue at all because my practice is so small. I’ve heard therapists state that their physical therapy license trumps any other license they have in regards to treating Medicare patients and I’ve heard everything in between.
I also saw the EIM post and the Twitter discussion and too have been hesitant to weigh in on this issue due to the amount of research needed to make a fully informed and educated statement, much less a recommendation to other therapists on which course to take. It is also easier to make a statement and determination about a course of action when one does not currently own a practice that is affected by these rules, however it sometimes takes this type of person to help break new ground and see a new way forward.
Anyway, now I’m not a lawyer either nor have I had a lawyer give me a determination on these rules, but I do feel that if a patient chooses a cash based practice and they are not fully informed until they arrive for their initial evaluation, they still have the choice “of their own free will and accord” to choose a provider that is a Medicare provider and where their treatment may be covered as long as they are fully informed prior to commencing with any service.
In my practice, I too have many patients state when they call that they want to be treated by me no matter what, even if they have to pay out of pocket. It can be a very difficult conversation to have with someone to explain that they can not been seen in our practice. I make sure any Medicare beneficiary seen in my office is aware that they have the option to be treated for their condition in another practice where their treatment may be covered by their Medicare or secondary insurance benefits. I try my best to screen potential patients over the phone when they call, without being discriminatory, to determine who the best provider for their condition will be and refer them appropriately if necessary.
Each and everyone of us has to choose where we are in this mottled grey area when deciding on how best to proceed with Medicare beneficiaries and it’s up to us to go to bat for our patients no matter where we decide we land on this issue and be responsible for any potential consequences, good or bad.
I agree that it might not be “look good,” be legal or ethical if standard policy was to treat all Medicare beneficiaries for all services and require each of them to sign a document that states they “refuse to allow the physical therapist to submit claims to Medicare.” Especially if they have not been informed of their option of being seen by a Medicare provider for the covered services which they qualify for.
In this regard are you (or the lawyer who advised you is) saying that; if the therapist or practice presents the option to the patient that they can “refuse to allow the practice to submit claims to Medicare” prior to the patient initiating the conversation, that this puts the practice a position to be seen as coercing the patient?
I do think, this new rule or law could be an additional protection and way to clear the waters regarding patients who have conditions that may or may not be eligible for “covered services”, some of who require a physical therapy evaluation to make that determination. It also can help clear up the treatments not clearly defined as “covered services,”provided to Medicare beneficiaries in a cash based practice, yet anyone utilizing this new law now is still operating in new territory with undetermined risk.
I also agree with what Carlos wrote, in that many of us can legally provide other services, that are not physical therapy, to this population. This is a mindset change in ourselves where we see that we have something other to offer to our patients besides rehabilitation.
Thanks for the detailed comment, Aaron.
To address your question: “In this regard are you (or the lawyer who advised you is) saying that; if the therapist or practice presents the option to the patient that they can “refuse to allow the practice to submit claims to Medicare” prior to the patient initiating the conversation, that this puts the practice a position to be seen as coercing the patient?”
Yes, that is what I have been informed and what I tried to convey in the post above. Thank you for asking for that clarification.
You’re welcome, thanks for clarifying.
Jarod
I think the fact that all of your patients pay cash justifies collecting cash from Medicare patients. You don’t collect from some insurance programs and not others, all patients are equal. If a clinic is up front that it is a cash based facility there should be no problems. The question I have is can you charge that Medicare patient your standard rate, or does the rate need to be in line with Medicare reimbursements?
I wish you were right, Curt, but you would be in violation of the law if you simply took self-payments from all MC patients based on your reasoning above.
As far as your question about cash-pay rates for MC beneficiaries (if you were seeing them in line with the information in this post and the new HIPAA rules)… the HIPAA rules state:
The limits on what the provider may collect from the beneficiary continue to apply to charges for the covered service, notwithstanding the absence of a claim to Medicare. See the Medicare Benefit Policy Manual, Internet only Manual pub. 100–2, ch. 15, sect. 40, available at http:// http://www.cms.gov/manuals/Downloads/ bp102c15.pdf
So, for MC Participating Providers, your charges must still be in line with the Medicare Fee Schedule.
Jarod,
As usual thanks for the the thorough information. I really appreciate the fact that you spent the time to do the research before weighing in on this. I too saw the twitter chat, and read through everything and reached the same conclusion.
I do, however, have an interesting wrinkle to add. I very often get current or former patients who ask me to treat their parents (always on medicare). In the past when I explained the situation to them they always asked the same question, “What if I payed for them?” I have had the request more and more frequently, most want to pay per session for their parent, but some ask about buying “gift cards” for “x” number of sessions.
I’m curious as to whether you or any of your readers run into similar situations?
Great Question, Justin. As far as I understand it, it doesn’t matter who is actually paying you for the MC beneficiary’s portion of what is owed to the clinic (whether it’s a copay or the full amount). I’m pretty sure that the rules do not change when a beneficiary’s child offers to pay you, but you may want to double check that with the APTA.
What about Direct Access Rule where the patient can refuse to have the PT inform their physician of their treatment? If the physician does not sign, then Medicare WILL not pay and then the patient can sign an ABN stating that the services would be non covered. I’m just investigating all this in preparation for setting up a cash based clinic.
We have that rule in TN, I am just wondering if that might be another loophole? Thanks!
Clarification, I think you would have to be a “nonparticipating provider” and still bill Medicare with a ABN code attached to the claim, to get a denial? Correct?
I think you are mixing up different possibilities here… Only when it has been determined that physical therapy is not medically necessary, would you provide an ABN and send them a claim with the appropriate modifier. I don’t know if there is such a thing as a modifier to say that the Physician signature is missing (based on a state-based direct access rule that the patient can refuse to have a Physician informed of the care). Again, check all this with a good attorney, and please let us know what you find.
For great info on the use of ABNs see: http://cms.hhs.gov/Medicare/Billing/TherapyServices/Downloads/ABN-Noncoverage-FAQ.pdf
I’m not personally familiar with that direct access rule, but I think this is a question best asked of your attorney… It’s true that Medicare will deny claims if the physician POC signature is missing, but I’m not sure if you can combine these two rules in order to provide covered services to a beneficiary on a self-pay basis.
Best of luck with your cash practice… that’s very exciting to hear!
What if you have a massage therapists can they see Medicare without any problems? In particular JFB MFR treatment. Thanks!
If the beneficiary is only seeing the massage therapist, only receiving massage, and has not undergone a PT evaluation or is under the care of a physical therapist in any way, this situation should be fine. However, the massage therapist’s intake paperwork (which the client will sign) needs to clearly describe the fact that massage is not covered by Medicare and that the beneficiary will be responsible for paying in full at time of service.
We are lucky to know that there is someone like you who are helping to lift up the practice of physical therapist like me. Thank you.
Thanks so much for that, Lance. You are most welcome.
Jarod, Thank you for broaching this topic. In all my investigations of this issue with Medicare and the APTA, the opinions seems to be that PTs are still not allowed to see Medicare beneficiaries for a service for which Medicare would normally pay. Although this is a gray area, the answers I get always seem to be do not do it. I personally do not see any Medicare patients for this reason and stop seeing my current patients when they turn 65 and begin Medicare. That truly stinks, but I am not willing to take the chance. I have been told by APTA that a congressman is planning to introduce a bill that would allow PTs to “opt-out” and see Medicare patients like other providers have been allowed to do as the result of the Balanced Budget Amendment of 1997 that allowed private contracting. I have been told that several other Congressional committees are considering things as well, but the prevailing opinion was we were not allowed to do this yet. While an attorney might have a different opinion, and may be correct, I do not think APTA currently supports that view.
Yes, it does “stink” to have to stop treating an established patient when they turn 65 and enroll in Medicare… absolutely ridiculous that they don’t really have a choice in how their healthcare dollars are spent when it comes to Physical Therapy.
The legislation you were referring to is the “Medicare Patient Empowerment Act of 2013” (H.R. 1310) http://www.govtrack.us/congress/bills/113/hr1310
It basically went nowhere this time around.
I forgot to say, the only time I have seen a Medicare beneficiary is when they have reached their reimbursement cap for the year and are no longer eligible for Medicare reimbursement for that year. Once the cap is reached, and I have confirmed that with Medicare, I have them sign an ABN that explains that the reason they can be seen by me is because they have used up all of their PT benefits under Medicare.
Jarod,
Thanks for such an informative post and thread. I am in the works of starting up my own clinic and still determining cash-based vs traditional payment methods. If my company is not yet a provider for medicare does all of this still apply? Or are non-MC providers exempt from this concern.? It sounds like you are not a participating MC provider but still cannot ethically/legally treat MC beneficiaries at your practice. Thanks for the great information so far!
Mike Scott PT, DPT
I have a potential client who is 70 years old, works full time and uses his employer’s insurance as his primary insurance. He has Medicare Part A for hospitalization, home health etc. Am I allowed to treat this man on a cash basis? I am assuming yes but the more I read up the less common sense I find in many of these rules.
Even if Medicare is not their primary insurance, if they are enrolled in Medicare in any way, all the same rues apply so you would NOT be able to provide this patient with covered services (unless they preemptively [“of their own free will”] requested that you do not submit any of their PHI to any 3rd Party Payor)
Jarod,
Thanks for all this information. I just started seeing patients at their homes and accepting cash only. I just ordered your ebook and I am anxious to get started! Presently I have a prospective patient who is a MC beneficiary and would like to be treated even though they knows I can not submit bill to medicare. The patient wants to make the choice to pay out of pocket. What kind of paperwork should I draft up? Should the patient draft something on their own instead? What link can I direct her to clarify situation? The perspective patient is a lawyer. Thanks
Whether it is your patient (the lawyer) or another lawyer, the safest thing for you to do is have an attorney review the current HIPAA laws and draft up the paperwork for any Medicare beneficiaries who, “of his or her own free will” requested that you do not send any of their information to Medicare or any third-party payers.
Thanks for coordinating this forum. If you have never enrolled in Medicare, I don’t see how you need to adhere to it’s policies. From my understanding, there is nothing in my practice act or license that requires me to adhere to Medicare if I am not contractually obligated. I understand that you can not opt-out, but this means you have a contractual agreement. This issue of not being able to opt-out is the main reason I never signed up with MC in the first place. Has anyone heard of anything contrary to this specifically for those with no contractual obligation in the first place. I understand this is a different situation for those who are MC providers. Thanks for any added information.
Thanks for the comment Neil. I mean absolutely no offense when I say this, but to make a point, your statements above are somewhat like saying, “I never enrolled with the IRS, so I don’t see why I need to adhere to its policies and mandates that I pay taxes.” As physical therapists we are bound by federal law regardless of whether or not we are contractually enrolled with Medicare.
No offense taken. However, I don’t quite see paying taxes as an apples-to-apples comparison. Anyone who receives a SSN is essentially contracted with the Social Security Administration. These forms are commonly signed by parents in conjunction with the birth certificate. This, as well as US code 26, make paying taxes a law.
I am trying to do the right thing, and I genuinely want the information that will help me to make important and legal practice decisions. Here are 2 questions I would like to have answered by whomever can lend me hand:
1. What federal law forces me to abide by MC policies if I did not sign on? Can someone please provide the section(s) of the federal code that require me to follow MC rules even if I am not a contracted provider.
2. In everyday language, “opting-out” is NOT the same thing as never having been contracted in the first place. However, is the federal code/MC rules treating the “was never there in the first place” therapists the same as “was there but now want to leave” therapists, which I know to be illegal/impossible under current law. Please supply the federal code section(s) stating such.
Thanks for the helpful discussion.
I really don’t have the answers to those questions at the moment, so I’ve forwarded them to the APTA for some help. It often takes quite a while to get an answer, but I will post it when I do.
Thanks for the great questions!!
Hi Neil,
Here is what I have for you:
There is a mandatory claims submission requirement for Medicare patients so a provider cannot choose Not to enroll AND treat Medicare beneficiaries. This is included at section 1848(G)(4) of the social security act. I have included a link below to more information.
https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/downloads/SE0908.pdf
So the federal laws of the social security act apply to you and everyone else regardless of whether or not you are a Medicare Provider. And it is the SS Act that has the legal mandate stating that any covered service provided to a MC beneficiary be submitted as a claim to CMS.
I knows this sucks, but I hope the information helps.
Dear Jarod,
Thank you for all these great discussions. I opened my cash-based practice this past year. Regarding the line, “The limits on what the provider may collect from the beneficiary continue to apply to charges for the covered service, notwithstanding the absence of a claim to Medicare”, if a customer has chosen a cashed-based PT provider (of his/her own free will), can an amount less than the Medicare fee-schedule be collected or does it need to be exactly according to the fee-schedule?
Thanks again!
Hi Denise,
When I researched this question, I was told that “if it is significantly lower than the MC fee schedule, then it should probably be associated with a ‘same day payment discount’ that comes off a fee closer to the MC fee schedule” … Not sure what “significantly” means in this case, but putting a ‘same day payment discount’ on an invoice is easy enough to do.
So if I evaluate a patient with Medicare, and determine they are not appropriate for restorative PT, but the patient wants maintenance PT (this happens in the neurological niche especially years after injury), is the eval considered billable to Medicare (therefore I have to continue with the process of billing) and not the treatments (I can collect cash)?
Patients often find my services for neuro treatment as an option after they are considered ‘maintenance’ by other facilities but they want the structured exercise, etc…I feel I need to do an eval, as they are new to me and I need to determine plan of care/appropriate treatment options and do a systems review. Thoughts?
Are you a Participating or Non-Par Provider with Medicare?
Dr. Jarod,
Regarding the following question and answer: Since Part A Medicare covers only hospital, nursing facility, and home health, treatment at most PT clinics for any clients with only Medicare Part A would NEVER BE COVERED by Medicare. Why then do you believe they would not be eligible to receive treatment on a cash basis?
Thank you for your work on this confusing and confounding issue, KS
“Susan P December 2, 2013 at 5:53 pm
I have a potential client who is 70 years old, works full time and uses his employer’s insurance as his primary insurance. He has Medicare Part A for hospitalization, home health etc. Am I allowed to treat this man on a cash basis? I am assuming yes but the more I read up the less common sense I find in many of these rules.
Reply
. Dr Jarod Carter December 2, 2013 at 6:04 pm
Even if Medicare is not their primary insurance, if they are enrolled in Medicare in any way, all the same rues apply so you would NOT be able to provide this patient with covered services (unless they preemptively [“of their own free will”] requested that you do not submit any of their PHI to any 3rd Party Payor)”
Thanks Kris. I have these exact questions in to the APTA but am still waiting for answers … they too are getting conflicting answers when they ask CMS our questions. Sorry for the wait! I’ll certainly post here and to my email list when I find out, so if you’re not already on it, sign up in the top right sidebar of any part of the site. Thanks again
I just called Medicare and asked about seeing a PT and paying out of pocket. Not telling her that I was a PT myself. She said that the patient can submit their own claim and a letter stating why the provider is unable to submit the claim or stating they are not enrolled as a Medicare provider or that they refuse to enroll with Medicare. She said then Medicare would determine if they would pay or not and the only problem would be they would not pay and it would be an out of pocket expense to the patient. I asked if there are any repercussions to the therapist and she asked me “why would there be any repercussions to the therapist?”
Can anyone tell me what would happen to my practice if I had a patient submit this information and the payment is denied.
Hi Pam,
What you were told goes completely against current law and Medicare regulations, but I’m not at all surprised that someone working at CMS actually told you these things. It is not uncommon to get a slightly different answer from them anytime you call depending on who answers the phone. It’s ridiculous.
I can answer your final question based on what I’ve seen happen to another practice that was not a participating provider with Medicare, but had a Medicare Beneficiary submit their own claims to Medicare …
You will get a letter from Medicare explaining the “mandatory claims submission” laws and essentially telling you to cease-and-desist providing any covered services to Medicare beneficiaries if you are not a participating provider with Medicare.
Jarod,
Such dedicated work you do! -thank you.
Have you (or others) seen fines or penalties imposed on PTs in this matter?
Thank you, Tamara! You are most welcome. I haven’t heard of anyone getting punishment of fines from the use of these new HIPAA rules to see MC patients on a cash-pay basis, but I do know of practices getting into trouble providing covered services to MC beneficiaries when they do not have a relationship with MC.
Thanks Jarod,
I now am in communication with the California APTA to clarify the process for me to continue my practice. Very frustrating!
Pam
I have followed your post and am very thankful for the information.
Based on what I have read up to August 7th, your original comments on being a non-contracting provider for Medicare. If a potential client wants to see me because I have “specialized services” as a physical therapist that are not provided by other PT’s and is referred by her primary physician to see me, (and has also heard of me by a “friend” to see me – so it is her choice, “free will” can I see this client if I explain the situation and she signs a statement as you mention in your article? Or now with the more recent posts it seems the “loophole” is not in place from the segment of the new HIPAA rules we are analyzing is the second half of page 5628 of the Federal Register, Vol. 78, No. 17 (page 64 of this PDF: http://www.gpo.gov/fdsys/pkg/FR-2013-01-25/pdf/2013-01073.pdf) and there is mandatory claims submission that overrules what you speak about.
Thank you so much for the clarification and your wisdom!
Shawn
No, the new HIPAA laws DO override the mandatory claims submission in cases in which the beneficiary, of their own free will, refuses to authorize the submission of a bill to Medicare. This is written very clearly on page 64 of the PDF you and I linked above… Right column. So if the beneficiary that you are asking about has told you, of her own free will, that she does not want you to send a bill to Medicare, then you can treat her and accept a cash payment. In other words, it is now her legal right to make that request and you must honor it. However, you would be treading murky legal waters if you “explain the situation” such that she feels compelled to sign something asking you to Not send a bill to Medicare.
With that said, you may want to call CMS and ask them about this scenario … based on your claim that you provide services that cannot be provided by other PT’s in your area, perhaps they will allow you to provide covered services without billing Medicare or being a participating provider; but I kind of doubt it.
Please let us know what you find out.
Thank you so much. I will let you know! I appreciate your candid and wonderful information. I have enjoyed a private pay business for 3 years now, YEAH!!! and have had others inquire into “how to”. I will be sending some of my colleges your way who are interested in what you and I have done.
Cheers!
You are most welcome.
That’s exciting news! Keep up the great work!
I know I’m late to this discussion but have studied it for some time. My issues:
1. Is it “against the law” to treat Medicare patients if you Send notice to Medicare that you are no longer participating in any way with Medicare. If we were left off a list that says you can opt out, how is this breaking the law? I really think the APTA needs to get another opinion on this legally. I have concerns though that the APTA and other groups who advise and consult with us are not “independent” in this. It is in there best interest that we stay tied to Medicare as much of our benefit is associated with what they do as a group for PTs regarding Medicare.
2. Even if you are not participating or participating, if you have a Medicare patient pay cash for anything, you are supposed to report it with appropriate modifiers (reporting even though you don’t expect to be paid) as they want a record. Of course, this is where the new wording about privacy would be useful. This necessary reporting regardless of participation is my biggest issue, I don’t want the overhead associated with Medicare, period. The reimbursement is so low and expenses continue to rise, it is becoming impossible to treat the patient at all under the rules.
3. My question is, why can’t we remove ourselves from the rules (i.e., we don’t participate in any way with Medicare – notice given) and let the patient decide, full disclosure. I imagine some will say this is illegal or fraud, but honestly, how so..what actual law is broken…isn’t this more of a permissive issue?
Hi Lisa,
I understand your concerns, and you have very good questions. I hope I’m able to clarify …
There is a federal mandate (law) that all healthcare providers directly bill Medicare for any covered services provided to Medicare beneficiaries; and you cannot directly bill Medicare unless you have established some sort of relationship with them (either “Participating” or “Non-Participating”).
There is a mandatory claims submission requirement for Medicare patients so a healthcare provider cannot choose Not to enroll AND provide “covered services” to Medicare beneficiaries. This is included at section 1848(G)(4) of the social security act. See the link below for more information.
https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/downloads/SE0908.pdf
So the federal laws of the Social Security Act apply to you and everyone else regardless of whether or not you have any relationship with Medicare. And it is the Social Security Act that has the legal mandate stating that any covered service provided to a Medicare beneficiary be submitted as a claim to CMS.
Does anyone have a sample template of a document that might suffice to have a patient sign so that I can accept a cash paying Medicare beneficiary that wants to see me “of their own free will?”
I will in the future but not at the moment… want to get it further vetted by an attorney and it will be a little while before I do so.
Hello Jarod,
I have had a lawyer helping me with a “private contract” for Medicare beneficiaries and he noticed in this document Medicare Benefit Policy Manual Chapter 15 – Covered Medical and Other Health Services T
(Rev. 194, 09-03-14) see here :http://www.cms.gov/Regulations-and Guidance/Guidance/Manuals/downloads/bp102c15.pdf under 40.4 – Definition of Physician/Practitioner
(Rev. 62, Issued: 12-22-06, Effective: 11-13-06, Implementation: 04-02-07) it states “The opt out law does not define “physician” to include chiropractors; therefore, they may not opt out of Medicare and provide services under private contract. Physical therapists in independent practice and occupational therapists in independent practice cannot opt out because they are not within the opt out law’s definition of either a “physician” or “practitioner”. The publication revised 09.03.14 so does this nullify your suggestions on providing services as discussed before?
I will say the document does line out what a contract needs to say but it does not seem to apply based on above comment.
Thoughts?
Also your link from above The segment of the new HIPAA rules we are analyzing is the second half of page 5628 of the Federal Register, Vol. 78, No. 17 (page 64 of this PDF: http://www.gpo.gov/fdsys/pkg/FR-2013-01-25/pdf/2013-01073.pdf) is the Part Two section and does not include the reference you have found in Part One. It starts with 5566. Do you have a link to Part One?
Thank you!
Not sure if anyone wrote in on this, but with a MC patient that signs an ABN, gets an official MC denial, then this denial often crosses over their secondary insurance. The secondary insurance (not AARP) may indeed pay for the services. This occurs especially if you are a participating provider with MC and the secondary insurance and also often out of network with the secondary. One who can legally accept self pay from a patient may want to try this. The secondary may pay the 115% of the MC fee schedule and can save the patient money as well. It’s worth it to call to the secondary insurance and see what plan they have.
Thanks so much for the input, Steve!
Jarod, first of all, it must give you pause and a smile to think of how valuable your Medicare threads have been to PTs all over the place (in the US, at least)…even years after first writing them!
I have a situation I would like another opinion on. I am a 100% cash-pay PT provider and am a participating MC provider (ugh!) but do not take on MC patients. Recently, however, a MC pt wants to see me for non-covered fitness/wellness services. If they, of their own free will, elect for me to not submit claims to MC can I then receive out-of-pocket payments from them? I realize that the sticking point may be my status as a Par Provider. Any insight would be welcome.
Best wishes for 2015!
Thanks for the kind words, Bob. yes, it is quite rewarding to hear how helpful the information on this site and in my e-book has been for my colleagues.
To answer your question, if the services you will be providing our fitness/wellness, it does not matter if you are participating with Medicare or not… You can provide the services on a cash pay basis since they are not covered services under any circumstance. It obviously needs to be clearly documented what they are receiving, so that if you are ever audited it is quite clear that they are truly not covered services.
Many thanks for the prompt reply and the insight.
Thank you Jarod for your continued guidance. With Bob’s situation, I have this too with people seeking my services in the Yoga Therapy realm, in the lens of Wellness education. If this is well documented as you say I don’t need to submit a claim to CMS?
I also did some further investigation and Medicare requires you provide a ABN – Advance Beneficiary Notice of Noncoverage to the client prior to providing service. I found the link you can download this notice from Medicare – http://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/downloads/abn_booklet_icn006266.pdf and it states I must still submit a claim with certain modifiers.
Do they really want to know what all people of the age of their “benefit” are doing for their health?
Hey Shawn,
Can you tell me where (what page) it says you must submit a claim even for non-covered services like Medicare?
It is my understanding that it’s not mandated to give ABNs for non-covered services (only mandated for continuing services that are no longer medically necessary), but I do think it’s always best practice to present something to the patient that explains the services they’ll be receiving are not covered by Medicare, and outline exactly what it will cost the patient.
Thank you for your continued guidance on this topic. I was just wondering your take on patients who turn 65 but have not yet enrolled in medicare OR patients who have medicare as a secondary and another insurance as a primary (yes, I have heard this scenario is possible).
Yes I do take patients who are beyond 64 y/o but haven’t enrolled in MC.
You have to be Careful about taking patients with Medicare as a secondary, because the primary insurance company will often forward claims to Medicare automatically and you can find yourself in the same trouble as if Medicare was the primary payor.
I cover this topic in much more detail in my Cash-Pay PT and Medicare e-book
Wondering if you can provide some guidance on offering free screenings/consultations for physical therapy to federally funded patients? Is this acceptable if the screening does not involve any sort of treatment & is not something that would be a billable service to Medicare/Medicaid? Want to be sure there is no violation of any Stark/Anti-Kickback/Inducement regulations. Thanks.
if it’s completely free, I don’t se how there could be any violations of anti-kickback or other regulations