Even if you feel comfortable with all things Medicare, chances are there’s a new rule in the works (oh, looky here) that could trip you up. Yes, the rules are always changing—and even the ones that have been in place for a while could get you stuck in a pickle (mmm, pickles). That’s especially true with the rules around providing treatment on a cash-pay basis, because your restrictions and obligations vary based on your relationship with Medicare—if you have one at all. Why, you ask? Let’s dive in.

Covered, Cash-Based Services

CMS has strict rules governing the manner in which providers can—and cannot—collect payment from Medicare beneficiaries. Those rules are especially tricky for therapists looking to provide services on a cash-pay basis—and they can change based on your relationship with Medicare. To that end, there are three types of relationships PTs can have with Medicare:

  1. Participating providers cannot accept payment directly from a beneficiary for any Medicare-covered services (beyond the standard deductible and 20% coinsurance, that is).
  2. Non-participating providers can accept payment from the beneficiary at the time of service. However, you must still submit a claim to Medicare for covered services so that Medicare can reimburse the patient directly.
  3. Providers who have no relationship with Medicare cannot provide covered services to a Medicare beneficiary on a private-pay basis—unless the patient (or his or her legal representative) of his or her own free will requests that you do not send claims or protected health information to Medicare.

Non-Covered Services

Now, Medicare doesn’t always cover all rehab therapy services—and therapists may accept cash from Medicare beneficiaries (beyond their deductibles, coinsurances, and copayments) for those services that Medicare doesn’t cover. In other words, you can accept cash if your services fall into one of these two categories:

  1. The Statutory Scenario: A service falls into this category if it’s considered preventive or wellness- or fitness-related. Now, under the Affordable Care Act, Medicare will cover some wellness and prevention services. But, it’s important to understand that for these services to be covered, they must be delivered during once-annual visits to the patient’s primary physician. So, unless you’re working as a member of a physician’s established wellness program, it’s unlikely that your wellness services will overlap with what Medicare covers.
  2. The Medical Necessity Scenario: A service falls into this category if it’s not considered “reasonable and (medically) necessary.” For more information on medical necessity, check out Section 220.2 of the Medicare Benefit Policy Manual, or take a look at this blog post.

Determining whether—and when—you can offer cash-based services to Medicare beneficiaries comes down to your relationship with Medicare and the medical necessity of the services you’re providing. In some cases, those factors could prevent you from telling your patients to show you the money. Also, keep in mind that before you’re able to provide services to a Medicare patient on a self-pay basis, you must issue what’s called an Advance Beneficiary Notice of Noncoverage (ABN). Stumped on how ABNs fit into the cash-pay model? Swing by the WebPT Blog tomorrow as we dive deeper into this topic and crack another Medicare misconception.

Looking to decode another Medicare regulation that’s got you stumped? Check out our latest webinar to learn about the nine most common Medicare misconceptions impacting PTs, OTs, and SLPs.


What questions do you still have about Medicare’s rules around cash-pay? Has your practice ever thought about changing its relationship with Medicare? Tell us in the comment section below.