Understanding Medicare Enrollment: Participating Versus Non-participating, Part 1

To treat Medicare beneficiaries, you must be enrolled in Medicare.

The Social Security Act mandates that Physical Therapists, Occupational Therapists, and Speech and Language Pathologists enroll in the Medicare program, submit claims for covered services, and bill the appropriate amounts as defined by Medicare.  

According to the American Physical Therapy Association, these requirements have no regulatory exceptions. If you are considering how you may be able to opt out of the Medicare program and whether to provide cash treatment to Medicare beneficiaries, you should seek legal advice. Medicare laws regarding billing claims and limiting charges apply to both patients enrolled in Medicare and those who are not enrolled. This means that rehab therapists cannot avoid penalties for noncompliance by choosing not to enroll in the Medicare program. Any therapist providing Medicare-covered services and billing beneficiaries directly is violating the law.

However, Medicare-enrolled therapists can choose either participating (PAR) or non-participating (Non-PAR) status. So what does participating (PAR) in Medicare mean?

• Therapists agree to accept assignment and Medicare's approved amount as payment in full for services.
• Therapists cannot charge patients more than the Medicare deductible and Medicare-determined coinsurance.
• Therapists receive 100% of the Medicare Physician Fee Schedule allowed amount.
• Medicare forwards claim information to Medigap insurance (commercial payer Medicare supplement plans and Medicaid plans).
  

What does non-participation (Non-PAR) in Medicare mean?

• Therapists do not agree to universally accept assignment but can choose to on a case-by-case basis—which means they do not have to accept Medicare’s coinsurance determination.
• Therapists receive 95% of the Medicare Physician Fee Schedule allowed amount;
• Therapists may bill the patient up to 115% of the allowed amount (this is the Medicare Limiting Charge);
• Therapists who do not accept assignment may bill the patient for the treatment cost at the time of service. They must bill Medicare for their services, and the patient receives reimbursement for their portion directly from Medicare; and
• Non-participating therapists who accept a patient’s assignment are paid 95% of the allowed amount and must agree to Medicare’s coinsurance determination.
  

Changing Your Participation Status 

Private practice therapists determine whether to participate or not after enrolling in the Medicare program. Providers like hospitals and Outpatient Rehabilitation Agencies (rehab agencies) cannot elect non-participation. 

Therapists can change their status during the Annual Medicare Participation Open Enrollment Period, which usually runs from mid-November to December 31. Your MAC will send you a postcard reminding you about this opportunity. 

If you are not currently participating in Medicare and want to participate next year, complete the Medicare Participating Physician or Supplier Agreement (CMS-460). By signing this agreement, you agree to accept assignment for all covered services that you provide to Medicare patients in CY 2025. Mail a copy to your MAC. If you are a newly enrolling Medicare provider, you can submit the agreement electronically with your enrollment application.   

If you do not want to participate in Medicare next year and are currently participating, notify your MAC that you do not wish to participate, effective January 1 of the upcoming year. This written notice must be postmarked before December 31 of the previous year. For some MACs, you may need to submit a specific form like the CMS-460 to change your participation status. Check your MAC’s website for their preferred procedure.

In our next article, we’ll start to look at the nitty-gritty of implementing non-PAR status. In the meantime, here are some resources for you to read up on Medicare participation and accepting assignment. 

CMS:

Annual Medicare Participation agreement 

Does your provider accept Medicare as full payment? 

WebPT: 

Everything PTs Need to Know About Accepting Medicare Assignment

APTA (membership required):

Cash-Based Payment and Medicare Services: No Exceptions to the Rules