Based on the first two articles (which you can read here and here) in this series, we now know there are two key factors that determine when you can accept private payment from a Medicare beneficiary:

  1. Your/your clinic’s provider relationship with Medicare
  2. Whether the service is “covered” by Medicare

We ended the last article with a detailed discussion of medical necessity, which leads us to the final step in determining when a service is covered.

Maintenance Care and Cash-Pay Practitioners

Even in situations where care was medically necessary, up until early 2013, Medicare did not cover “maintenance care.” Thus, physical therapists could accept private payment from beneficiaries who received 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. However, 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.

Based on information from the above-linked fact sheet—and some legal consultation—this is my understanding of it:

For years, Medicare contractors who denied coverage for Medicare beneficiaries if they were no longer showing improvement were actually going against established Medicare policies (at least in the SNF settings):

For example, in the regulations at 42 CFR 409.32(c), the level of care criteria for SNF coverage specify that the “. . . restoration potential of a patient is not the deciding factor in determining whether skilled services are needed. Even if full recovery or medical improvement is not possible, a patient may need skilled services to prevent further deterioration or preserve current capabilities.”

The plaintiffs of Jimmo v. Sebelius finally called them out on this practice and won in court. Way to stick it to The Man!

Here is the most pertinent information from the above-linked fact sheet:

A beneficiary’s lack of restoration potential cannot, in itself, serve as the basis for denying coverage, without regard to an individualized assessment of the beneficiary’s medical condition and the reasonableness and necessity of the treatment, care, or services in question. Conversely, coverage in this context would not be available in a situation where the beneficiary’s care needs can be addressed safely and effectively through the use of unskilled personnel.

Thus, such coverage depends not on the beneficiary’s restoration potential, but on whether skilled care is required, along with the underlying reasonableness and necessity of the services themselves.

I highly recommend you also read the section on “maintenance programs” in the Pub 100-02 Medicare Benefit Policy of the CMS Manual System, which, at the time of this writing, it is in its 179th edition. To find the section I mentioned, click the above link and go to Section D (pg. 86) of 220.2 Reasonable and Necessary Outpatient Rehabilitation Services. 

As you will see, there is still quite a lot of maintenance care that would not be covered by Medicare, and could therefore be provided on a self-pay basis. It really comes down to whether the interventions can be provided by unskilled personnel. 

Here is my interpretation of what this all means to us:

If physical therapy treatment/service is preventing or slowing a patient’s deterioration, and this service cannot be provided or reproduced by non-skilled personnel (like a spouse, caregiver, personal trainer, etc.), then that service is a covered service (unless it falls into other non-covered categories like “prevention, fitness, wellness,”), and a physical therapist cannot accept private-payment from the beneficiary to provide it. 

If the service can be self-administered or provided by unskilled personnel like a personal trainer or caregiver, Medicare is not going to cover it, and physical therapists should be able to provide that maintenance service on a cash-pay basis. In these situations, you may occasionally find a beneficiary who wants the service provided by her physical therapist rather than “unskilled personnel” and understands that she will be required to pay out-of-pocket because Medicare will not cover such a service. 

So, although these changes have decreased the amount of cash-pay services we can provide to Medicare beneficiaries, there are still opportunities for the provision of maintenance-type services on a self-pay basis. In these situations, you should provide a written contract or ABN and get a signature confirming the beneficiary fully understands the situation and his financial responsibilities. 

This three-article series has provided a good overview of the foundational concepts and regulations of the Cash-Pay PT and Medicare topic, but we have just barely scratched the surface. If you really want to implement cash-pay programs into your private practice, you probably have (or should have) questions on topics including regulations on pricing, ABNs and private contracts, Medicare Advantage plans, Medicare as a secondary payer, and “wellness” vs “skilled physical therapy.” All of these topics and so much more are covered in my eBook, which you can find at CashPTMedicare.com.


About the Author

Jarod Carter PT, DPT, MTC is the owner of Carter Physiotherapy in Austin, Texas—a successful 100% cash-based private practice. He also is an author and helpful guide on the cash-based practice model. You can find his most recent book, Medicare and Cash-Pay Physical Therapy, at CashPTMedicare.com.