Over the years, we’ve written quite a few blog posts about Medicare—covering everything from Medicare and direct access to Medicare supervision requirements—and I don’t foresee that stopping any time soon. After all, there are so many intricacies and nuances to navigating Medicare that we have fodder to write until, well, either the end of time or the end of Medicare—whichever comes first. Today, let’s review one of the most fundamental Medicare concepts: the notion of accepting assignment. Here, we’ll help clarify what that means for physical therapists—and the pros and cons of doing so.

What does it mean to accept Medicare assignment?

In short, accepting Medicare assignment means signing a contract to accept whatever Medicare pays for a covered service as full payment. 

Participating Providers

Providers who accept Medicare assignment for all covered services are considered participating providers under Medicare and may not charge patients above and beyond what Medicare agrees to pay. These providers may, however, collect patient deductibles and coinsurances—although, as explained here, these providers typically ask Medicare to pay its share before collecting anything from the patient. Per the same resource, these providers are required to submit claims directly to Medicare for reimbursement and cannot charge patients for the claim submission. As Dr. Jarod Carter, PT, DPT, MTC, writes here, “This is the most common and best-understood relationship that physical therapists have with Medicare.” 

The Pros

Because Medicare beneficiaries often pay less out of pocket when receiving care from a provider who accepts assignment, patients may be more willing to work with these providers. Thus, if you accept assignment, you may have access to not only more Medicare patients, but also more potential referral partners who only work with assignment-accepting providers. 

The Cons

You must accept whatever Medicare deems appropriate compensation, and as we know, that’s below market value more often than not. Given the recently announced cuts to assistant-provided services and the 8% cut to all physical therapy services, accepting assignment may be increasingly less appealing to physical therapists. That said, if you serve a large Medicare population, the volume of patients you see may make it financially beneficial for you to continue playing by Medicare’s rules.

If you don’t want to accept Medicare assignment, what are your other options?

Non-Participating Providers

As Meredith Castin explains here, Medicare also allows physical therapists to be non-participating providers (a.k.a. non-enrolled providers), which simply means that, while they are still in a contractual relationship with Medicare (and thus, are eligible to provide covered services to Medicare beneficiaries), they have not agreed to accept assignment across the board. As such, these providers may charge more than what Medicare pays for a particular service up to a limit that Medicare calls “the limiting charge.” Non-participating providers may choose to accept assignment for some services, but not others—or no services at all. For services that are not under assignment, the provider may collect payment directly from the patient; however, he or she must still bill Medicare, so that Medicare may reimburse the patient. 

The Pros

Non-participating providers are still eligible to serve Medicare beneficiaries, but they maintain some degree of freedom when it comes to pricing their services. In other words, if you are a non-participating provider, you are less beholden to what Medicare deems as appropriate payment than you are as a participating provider.

The Cons

That said, you do still have to charge within Medicare’s limit, which means your freedom is far from total. Additionally, because patients may have to pay more out of pocket for your services and/or pay and wait for reimbursement from Medicare, you may have to work harder to convince them that you’re worth the financial investment. With the right data and marketing, it’s definitely doable; it may just require a little more effort.

No Relationship with Medicare

Physicians are eligible to “opt out” of Medicare, which means that even if they are neither participating nor nonparticipating providers, they can still see Medicare beneficiaries on a cash-pay basis. Physical therapists do not enjoy the same privilege. So, if you decide not to be a Medicare participating provider or non-participating provider, then you effectively have no relationship with Medicare. Thus, you are not able to provide Medicare-covered services to Medicare beneficiaries. 

That said, all physical therapists, regardless of their relationship with Medicare, may provide never-covered services to Medicare beneficiaries, including wellness services. According to Castin, though, providers who go down that route, “need to be very clear about Medicare’s definition of ‘wellness services’ versus ‘physical therapy services.’” According to cash-pay PT Jarod Carter, it’s imperative for your documentation to clearly support that the services were indeed wellness as opposed to therapy. 

The Pros

As a provider with no relationship with Medicare, you’re not required to play by Medicare’s rules when it comes to reporting requirements or (low-ball) payments. You’re also not at all affected by Medicare’s most recent cuts, which, quite frankly, is a big bonus.

The Cons

However, as of 2007, 15% of the US population was enrolled in Medicare; that’s 44 million people—most of whom could benefit from seeing a physical therapist to improve function and mobility and decrease pain. And that number is projected to grow to 79 million people by 2030. As such, choosing not to play ball with Medicare means you’re walking away from a very large market of patients who need your services. 

Deciding whether or not to accept Medicare assignment—and what type of relationship you’d like to have with Medicare—is not an easy decision to make, and there are a lot of factors to take into consideration before getting involved or breaking it off with this substantial federal payer. That said, it is important to know that you have options. Have more questions about what it means to accept assignment as a PT? Ask them below, and we’ll do our best to find you an answer.