If you’re a rehab therapist who works with Medicare beneficiaries, chances are you’ll find yourself performing a service that isn’t covered by their insurance. When that happens, you could find yourself in a billing predicament—if you don’t take the proper steps, that is. What are those proper steps? Read on to find out.
Which services does Medicare not cover?
To start, it’s important to identify which services Medicare won’t cover. Typically, Medicare denies coverage for one of four reasons (and the same is often true for commercial payers as well). Here are the categories of noncoverage:
1. Medically Unreasonable or Unnecessary Services
Medicare does not cover services that fail to meet CMS’s definition of medical necessity. To be considered medically necessary, the services must meet specific criteria defined by national coverage determinations (NCDs) and local coverage determinations (LCDs). As we explain here, “in most cases, the medical necessity of services is determined based on:
- Whether the cost of treatment is reasonable considering the patient’s chances of reaching a desired level of relief or functional improvement.
- Whether the treatment will mitigate the patient’s risk of suffering an even worse outcome if the current condition is left untreated.”
2. Non-Covered Services
Generally speaking, Medicare does not cover the following services:
- Custodial care
- Services provided outside of the United States
- Services required as a result of war
- Services and items for personal comfort
- Routine checkups
- Cosmetic surgery
- Services furnished by the beneficiary's household member or immediate family member
- Dental services
- Services furnished in a SNF setting not delivered directly under the arrangement of the provider
- Certain services and devices for foot care
- Investigational services
- Services related to or required as a result of a non-covered service
3. Bundled Services
Per CMS, “Medicare does not pay [for] services and supplies denied as bundled or included in the basic allowance of another service, such as:
- Fragmented services included in the basic allowance of the initial service
- Indirect prolonged care
- Physician standby services
- Case management services, such as beneficiary telephone calls
- Supplies included in the basic allowance of a procedure.”
4. Services Reimbursable by Other Organizations
Furthermore, Medicare will not pay for services:
- that are reimbursable under the Medicare Secondary Payer Program;
- paid for by a government entity;
- the beneficiary, another individual, or an organization has no legal obligation to pay for;
- defective items covered under warranty.
Pro tip: While these four categories describe non-covered services, there are exceptions to each one. For this reason, you should always review any applicable exceptions before billing a patient for what you presume to be a non-covered service.
How can you collect payment for non-covered services?
Here’s the short answer: unless the patient has a secondary insurance, he or she will likely end up footing the bill. But before you can collect, you must make sure you’re dotting your i’s and crossing your t’s. And that means issuing an Advance Beneficiary Notice of Noncoverage (ABN).
Have the patient sign an ABN.
As we explain in this blog post, “An ABN is a form practitioners use to notify a Medicare patient that Medicare might not cover the therapy services he or she is about to receive,” and providers must issue an ABN before rendering services that are usually covered by Medicare, but are not expected to be paid in a specific instance. The purpose of an ABN is to ensure that a patient makes an informed decision about whether he or she should receive the service, thus accepting financial responsibility should Medicare not pay. That’s why it’s crucial to issue the ABN prior to rendering the service. (But resist the urge to issue a blanket ABN!) Furthermore, if the provider fails to issue the ABN in advance, the patient will not be financially responsible for the service. Once the provider has obtained a signed ABN, he or she must provide the patient with a copy and retain a second copy with the patient’s medical record.
Ship the claim to Medicare.
Once you’ve obtained a signed ABN—and the patient has accepted financial responsibility for a service—add the service onto the claim with the correct CPT code, required service modifiers (e.g., GP for physical therapy, GO for occupational therapy, and GN for speech-language pathology), the GA modifier (which indicates a signed ABN is on file).
Pro tip: If the service is statutorily excluded or is not covered by Medicare benefits, you would affix the GY modifier instead of the GA.
Collect the patient’s payment.
Next, your Medicare contractor will process the claim and send you an Explanation of Benefits (EOB), which will indicate the non-covered charges are the patient’s responsibility. From there, you can charge the patient for this service or send the charges to the patient’s secondary insurance (if applicable).
And finally, remember never to bill statutorily non-covered services under a payable code, as this is considered fraudulent.
Pro tip: Per this CMS resource, for services that are never covered by Medicare, you do not need to submit a claim to your Medicare contractor unless the patient has a secondary insurance that might cover the service. In that case, you would need the Medicare denial in order to submit the claim to the secondary payer.
So, there you have it: your guide to getting paid for services not covered by Medicare. Got any questions for us? Drop them in the comment section below!