Medicare Par or non par cash based physical therapy cropped

Medicare Enrollment – PAR or NON-PAR?

This is # 2 of a 3 part series on Medicare. Check out Part 1: Medicare: My Story

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As if all things Medicare were not confusing enough, the very act of enrolling in Medicare has confusing terminology.   When you enroll in Medicare you have a choice to become a “participating provider” or a “non-participating provider”.  All together that seems counterintuitive, doesn’t it?  Let’s start again with some terminology that will make it helpful for this discussion and provide some descriptive context to Medicare’s terminology:

Participating provider really means “I am enrolled in Medicare and participate by accepting Medicare assignment”.

Non-participating provider really means that “I am enrolled in Medicare and I am non-participating because I don’t accept assignment.”

Medicare Enrollment – PAR or NON-PAR?

So now you know: both participating and non-participating providers are enrolled in Medicare.  Let’s look at the definitions of each, now that we know that both participating and non-participating providers are enrolled in the Medicare program and examine the differences:

Participating Provider (PAR):  A provider agrees to accept assignment of claims for all services furnished to Medicare beneficiaries.   In doing so, the provider agrees to always accept the Medicare allowed amounts as payment in full and also agrees not to collect more than the Medicare deductible and coinsurance or copayment from the Medicare beneficiary. Participating providers receive higher reimbursement rates that non-participating providers and reimbursement is sent directly to the provider.

Non-Participating Provider (NON-PAR): A non-participating provider can elect participation on a claim-by-claim basis, but receive a lower reimbursement amount of 95% of the allowed amount, regardless of whether the claim is assigned or not assigned.  NON-PAR providers can bill beneficiaries for more than the Medicare allowable for unassigned claims, up to the limiting charge – which is 115% of the fee schedule amount. Reimbursement is sent to the beneficiary on unassigned claims, which means the provider must seek payment from the beneficiary. On assigned claims the payment is sent directly to the provider.

Running the Numbers

According to the Medicare Physician Fee Schedule and various rules in play for 2014, including multiple procedure payment reduction (MPPR), and the 2% payment cuts on Medicare payable portion due to the federal government’s sequestration, showing an example becomes complicated, so for the sake of simplicity we will assume that Medicare reimbursement is $100:

PAR-NON-PAR medicare cash based physical therapy fee schedule

 

 

The chart represents the end game, but interim calculations indicate that of the $95 limiting charge the 20% normally paid by a supplemental would be $19, with Medicare paying 80% or $76.  If the provider charges 115% of the limiting charge at $109.25, and the provider is adept at collecting this amount, this represents $14.25 over the $95 limiting charge.  While you are calculating that in your head, let’s talk about enrolling in Medicare.

Enrolling in Medicare

When a physical therapist (or occupational therapist or speech language pathologist) makes a decision to enroll in Medicare as either a solo practitioner and/or a group practice an application is made on the CMS 855i form (or online via PECOS).  If you are going to join a physical and occupational therapy group practice the enrollee also completes the CMS 855r (or via PECOS) to reassign benefits to the group practice.[i]  As your application makes its way through the approval process[ii] you will be able to treat Medicare patients from the date of your application, but may not bill Medicare until your approval is finalized and Medicare number assigned.[iii]

Electing to Participate or Not to Participate

As part of the application process a therapist can elect to enroll as PAR by submitting the Medicare Participating Physician or Supplier Agreement   CMS 460 form.  This is the same form that is used annually during the CMS open enrollment period.  Participation in Medicare is on an annual calendar year basis, with open enrollment dates generally beginning on November 15th of each year. (Dates are published annually in the fee schedule final rule).  Most providers that intent to be PAR submit the CMS 460 form at the time of enrollment, although you have up to 90 day to do so (but your assignment will not being until your submitted form is accepted.

Violating the Assignment Agreements – Beware of Penalties

If you accept assignment, you agree to accept Medicare’s reasonable charge as the full charge for the service. You violate the assignment agreement if you collect or attempt to collect from the beneficiary or other person any amount other than coinsurance, non-covered charges or unmet deductible. If you violate your assignment agreement, you could face one of the following penalties:

  • Any person who accepts assignment and who “”knowingly, willfully, and repeatedly” violates the assignment agreement shall be guilty of a misdemeanor and subject to a fine of not more than $2,000 or imprisonment of not more than six months or both.
  • CMS may exclude the provider from program participation and from any State health care programs.
  • The statute provides for civil monetary penalties (CMPs) of up to $2,000 per item or service claimed against any person who violates the assignment agreement.

Remember that once you file a claim assigned, Medicare will treat that claim as assigned even if the assignment was billed in error.

(Source: Cahaba Government Benefit Administrators, J10 Medicare Administrative Contractor)

The Beneficiary, the Therapist and the Ca$h

A beneficiary considering selection of a physical therapist can determine PAR or NON-PAR status by checking at the Medicare website. Why would a beneficiary want to check this status?  Well there are a number of reasons, first of all – is this physical therapist enrolled in Medicare?  The second reason is “will my care be covered, or will I have to pay for “excess” charges? “

Are you still thinking about the $14.25 extra per $100 of Medicare limiting charge in our example above?  For the therapist the compelling reason for being NON-PAR may be the limiting charge of 115%. Remember the 115% is computed of the 95% of the fee schedule amount, so in effect that potential revenue increase is only 9.25%.  Fair warning from our friends at the Cahaba J10 MAC: “Even if you did not take assignment on any Medicare claims, you would need to collect 91.5% of your charges for the non-assigned claims to break even with a participating provider who filed the exact same claims and charges.”

Most beneficiaries select a Medicare supplemental policy, that is designed to assist with payment of the 20% that Medicare does not pay (co-payment) and may in some instances assist with the deductible.  Supplemental plan designs must conform to CMS requirements and not all plans are offered in each state.  An option that the beneficiary has in selecting supplemental coverage is for “excess coverage”  which covers the difference between what a provider charges and the amount Medicare will pay up to Medicare’s limiting amount.  Since this requires a higher premium, this is not universally selected as a supplemental option.

Are you considering being a NON-PAR provider?  Will beneficiaries pony up the extra money that you can charge with the 9.25% premium?  Is their value for a beneficiary in coming to your practice if you are NON-PAR?

Endnotes:

[i] There are variations on the enrollment form for private practices to provide in home therapy services, as well as a private practitioner able to operate as a corporate entity if they are the solo owner.  These variations are not addressed in this article.

[ii] Physical therapists in private practice have been identified as being a moderate risk to the Medicare program – consequently there are additional enrollment processes that are not present for OT and SLPs

[iii] Prior to enrolling in Medicare be sure to obtain your NPI number.

Next up: 3 Things You Probably Didn’t Know About Medicare & Cash Pay Physical Therapy

 

About The Author

Nancy Beckley

Nancy J. Beckley MS, MBA, CHC: President-Nancy Beckley & Associates LLC. Compliance outsourcing, risk assessment, compliance plans, compliance training, auditing, due diligence, investigation support for therapy providers.

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15 Comments

  • Cindy Schmidt

    Reply Reply August 13, 2014

    Hi Nancy,
    Thank you for an informative article on a confusing subject. I have a few clarifying questions.

    I was told as a Therapist who signs up as a non-par provider, I can collect up to what medicare would pay for such service and then it is the patient’s responsibility to get reimbursement. My main task would be to find out from the beneficiary’s particular plan what the charge for each service would be. Is that correct? Would I have other responsibilities for documentation of payment, ABN, etc.?

    I was also told that if it is a service Medicare does not cover, such as Dry Needling, I can charge the client my usual fee and not have to deal with medicare. Is that correct?

    I also do PRN work for a local company as a contract therapist and through them I am signed up as a participating provider for medicare. I was told in my private practice, which is cash-based, I could sign up as non-participating and there would not be a conflict. Is this correct and how do I make sure to keep the two separate?

    Thank you!
    Cindy

  • Nancy Beckley

    Reply Reply August 18, 2014

    Hi Cindy – and thank you for your comments and questions. I will address them one by one to provide clarity as well as information.
    1) If you sign up as a NON-PAR provider with Medicare you can charge the beneficiary up to 115% of the Medicare Physician Fee Schedule (MPFS) amount. In order to determine that amount you would need to access the MPFS for your locality (can download from CMS, or alternatively utilize the fee schedule calculator in the member section of the APTA website.) This is the only fee schedule that you will have to check, unless a particular managed care plan allows for PAR and NON-PAR participation.

    2) As a NON-PAR provider you are obligated to submit the claim to the Medicare contractor on the patient’s behalf. Medicare will reimburse the patient, and you collect the fees as noted in the table above.

    3) There are specific rules of the use of the ABN for non-covered services as well as services that are not medically necessary. Since 1/1/2013 statutory liability was transferred from the beneficiary to the provider. I have written several detailed blog posts on my website at http://nancybeckley.com/blog (put ABN in search box) that describe the legal requirements and well as coding and modifier use that is required in order to obtain beneficiary liability.

    4) If Medicare does not cover a service you will not need an ABN, however if the beneficiary would like the claim to cross over to their secondary insurance CMS advises the use of the ABN with the GA modifier. Yes, you can charge your usual fee. (Do you have an established fee schedule?)

    5) For dry needling I recommend that you check out the APTA position on this posted at their website. There is lots of folklore in the therapy “web space” about this, but from a compliance perspective it is important to anchor Medicare billing and coding decisions based upon the compliance hierarchy: written laws, statutes, regulations and policy – and given the absence of that reply on the professional guidance of the APTA.

    5) If you are already a PAR provider – congratulations – you will not need to re-enroll in Medicare for your private practice. However, you can not “split” your participation: you cannot be PAR with one group and NON-PAR with another. During the end of the year open enrollment period, you can make a choice to be a NON-PAR provider, however, your contract with the other therapy company may oblige you to be PAR. If the therapy company with which you contract allows you to be NON-PAR, they can “elect” PAR for any claim – however keep in mind that reimbursement will be at 95% (chart above). I suspect they might not want the complications that this would bring – but you should verify.

    Best of luck in your practice, and by asking clarifying questions, you are one step ahead on the path to compliance!

  • Carol

    Reply Reply January 15, 2015

    Hi Nancy, Thank you for your post.
    I am currently neither PAR or NON-PAR and have a small cash based practice. Am I allowed to treat a person over 65 who has another primary private insurance plan which is the one they will be submitting their receipts to for reimbursement to? Does it matter if they are signed up with Part A or Part B.
    Also, am I allowed to use an ABN, or is this just something you can use if you are enrolled with Medicare?

  • Nancy Beckley

    Reply Reply January 27, 2015

    Hi Carol, and thanks for your comment. I will take your last question first – a Medicare approved ABN (in outpatient therapy) is for the purpose of providing notice to Medicare beneficiaries that a service is not a benefit is not medically necessary. To transfer liability to the beneficiary it must be signed and dated and coded on a claim line. So a Medicare ABN cannot be used by a provider that is not enrolled and Medicare (as they can’t submit a claim). However, you can use any type of form to communicate with a patient, prior to rendering services, that the services may not be covered, and the patient understands their obligation to pay.
    As for your second question, if Medicare is secondary payor, it does not matter if they beneficiary as Part A or Part B. There is a whole world of compliance related to MSP (Medicare Secondary Payor).
    Now to your first question, which I hesitate to answer, because of the inherent complications of not knowing all the facts. Take for example, you treat the beneficiary and provide a claim from for them to submit to their primary insurance. The primary insurance reimburses the patient but may review their obligations as primary payor vs. secondary payor. Additionally the patient may have certain out of network benefits etc. I am going to do a bit of research on Medicare as Secondary.

  • Andrew

    Reply Reply April 11, 2015

    Nancy, if you were enrolled for MC by a previous employment, and have a MC provider number, and open your own practice, do you have to see Medicare patients? Can you say at this time you are not seeing them? Is there any wording you should stay clear of in communications regarding this?

    Thanks!

  • Nancy Beckley

    Reply Reply April 14, 2015

    Hi Andrew. Thank you for your question. Have you determined if your Medicare credentialing is still active? Do you have a PECOS account where you can check, or a copy of the letter from CMS indicating the effective date of enrollment and your PTAN?

    If you are enrolled in Medicare with your previous employer, you likely reassigned your benefits to that group practice (assuming private practice). When you left their employment did anyone send notice (855/PECOS) to the Medicare Administrative Contractor that you were ceasing the reassignment of benefits to that practice? Additionally in your new practice, you can, if you wish, enroll in Medicare 2 different ways: 1) as a Group Practice enrollment – wherein you would reassign your “existing enrollment” benefits to the group; or 2) the option (if you qualify) to have your group practice and your enrollment be one and the same.

    Before you move forward on adding, deleting and/or changing your Medicare enrollment you should seek the assistance of an expert in the area familiar with the complexity of Medicare regulations.

    Keep in mind: all medically necessary services (that meet the Statutory definition of medical necessity) must be provided by a provider/supplier that is enrolled in Medicare, and the services must be billed to Medicare. There are some complexities with interpretation of a beneficiary presenting and asking (“own free will”) to be treated and to pay cash – which I won’t comingle in this conversation.

    Now as to your question – I would first determine your “status” of your Medicare credential, seek an expert opinion on your future status, and then craft a communication plan for Medicare beneficiaries that seek your services.

    As those that know me, know I will say – tinkering with Medicare in the absence of a thorough understanding is likely inviting trouble.

  • Aaron LeBauer

    Reply Reply April 23, 2015

    Nancy,
    Thank you so very much for your thoughtful and detailed response! Your knowledge and expertise in invaluable to our community!

  • Chris Zang

    Reply Reply April 28, 2015

    Hi Nancy,
    I have a single office practice that is neither PAR or NON PAR. If a 65 y/o patient enrolled in Medicare A and B as there primary were to request to see any of our therapists, are we allowed to see them if they agree to pay cash? This would be for a non specialized but medically necessary treatment (ie post TKR) that a PAR practice down the street could also perform but the patient would prefer our clinic. If yes would it be wise to have them sign a form stating that they understand their choice to pay cash and that Medicare would not be billed? Would they be allowed to bill Medicare as we are neither PAR or NON PAR and can not use an ABN.

    Thanks for you comments on this more frequently occurring request.

    Chris

    • Aaron LeBauer

      Reply Reply May 21, 2015

      Chris,
      Thanks for your question. If this if for a “medically necessary” treatment and a “covered service”, then according to Medicare guidelines you must be a Medicare provider. If you did have the patient file a self-claim to Medicare or their Secondary insurance it would get kicked out and you could be liable for paying the patient back and possibly a fine.
      I know it is completely unreasonable for a person not to be able to choose their provider, and it would save CMS/Medicare money, but that is currently the law.
      The ABN if for clinics that are medicare providers treating patients when they choose a non-covered service or they reach their therapy cap.
      If you treat a patient in your practice for health/wellness advice, exercise instruction or personal training, then yes you should have them sign a form stating they understand you are not providing a covered service and that you are not a medicare provider and that they have the right to choose a different physical therapy practice that is a Medicare provider, but this is not an ABN.
      My previous post on Medicare may shed some more light on this subject for you http://lebauerconsulting.com/medicare-cash-based-physical-therapy-my-story/
      Good luck,
      Aaron

  • Alma

    Reply Reply April 30, 2015

    Hi Nancy,
    I have been trying to find a definitive answer and reference for the question of, can a completely cash based physical therapy clinic treat patients with Medicare who want to pay out of pocket?

    Thanks for your help!

    • Aaron LeBauer

      Reply Reply May 21, 2015

      Hi Alma,
      Thanks for your question. You/your practice must be Medicare PAR or Non-PAR providers to provide a “covered service” to a Medicare beneficiary. If you are not a Medicare provider you can only treat medicare beneficiaries for “non-covered” services and if their reason for being treated is not a “medical necessity.”
      Maybe one of my other posts will bring clarity to your situation http://lebauerconsulting.com/medicare-cash-based-physical-therapy-my-story/
      Good luck,
      Aaron

  • Suzi

    Reply Reply May 3, 2017

    Am I missing something?
    If I am PAR, I am forced to send all claims into Medicare assigned.
    If I am NONPAR, I can send in claims assigned or non assigned on a claim by claim basis.
    Why would I benefit being PAR???????
    Suzi

    • Aaron LeBauer

      Reply Reply May 8, 2017

      Hi Suzi,
      Thanks for your comment.
      I see it like this, if you are PAR (an enrolled and participating provider with Medicare), you are not really “forced” to send all claims to Medicare, that’s the agreement you enter into. Many people choose to be NON-PAR because it means they can accept a same day payment from the patient.
      A practice benefits by being PAR because that is the path to least resistance for the patient. It means patients don’t have to spend any money out of pocket to see you, at least not until they reach their cap. PAR may be less work for you
      It all depends on how you want to serve your patients and what you want for yourself.

  • Nancy Beckley

    Reply Reply May 16, 2017

    Aaron – your comment on the cap may likely be misleading. All medically necessary beyond the cap must be provided to the Medicare beneficiary and so indicated by a -KX modifier on the claim lines at/over the therapy cap ($1980 in 2017).

  • Ralph simpson

    Reply Reply May 17, 2017

    Thank you Nancy.

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