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Medicare and Cash Practices

Best Np Student

There has been a lot of discussion on the Facebook group about having a cash practice and seeing Medicare patients. Listen, you are not supposed to charge a Medicare patient cash for a covered service if you are still an enrolled provider with Medicare. It is that simple. There is no debate over this, the regulations are clear.

Most of us have been credentialed with Medicare, Medicaid, and private insurance companies when we first started practice by our employers. I highly doubt there are many nurse practitioners reading this who have not been. Therefore, listen up, this is important.

The administrative pencil pushers and governmental bureaucrats, in all their wisdom, have decided that it is unethical to be charging Medicare patients cash for covered services EVEN if you are operating a 100% cash practice AND the patient is okay with paying for it. Why do they care? It is beyond me; we are saving them money… But to our indebted government, money is unlimited, so it doesn’t matter, I guess… I love working in a highly regulated field…

What could happen if you do bill a Medicare patient cash for a covered service? Well, if a Medicare investigator found out you were charging Medicare patients cash for covered services while you were enrolled with Medicare, they could technically fine you or pursue criminal proceedings. Is this worth their time? I highly doubt that… Why pursue someone who is SAVING them money vs someone who is committing millions of dollars in Medicare fraud? Regardless, elite nurse practitioners do not take dumb risks.

What do you do then if you want to open a niche side practice that accepts cash that provides Medicare covered services?

Well, you have 2 main options:

  1. Elect to remain in Medicare and simply do not see Medicare patients (This is what I do and what I recommend doing. You can still see Medicare patients for non covered services though).
  2. Opt out of Medicare so you can see Medicare patients and not worry about it (You will not be able to bill Medicare again though at your part-time job unless you opt back in. This could pose issues with future employment. If you are going 100% solo and don’t care, then opt out and don’t worry about it. If you want to keep a part-time job as the Elite Nurse Practitioner Model advocates for, then you need to stay opted in).

If you want to start a concierge direct primary care practice, then go to some other resources out there that discuss this model and Medicare patients in more detail. That is generally a full-time practice that I do not advocate having because it does not provide redundancy in your life which provides financial security and stability. Plus, it is too much of a headache compared to other practices you could start.

On the other hand, if you are wanting to start a niche side practice that only accepts cash while maintaining your Medicare enrolled status, what do you need to do?

  1. Don’t accept Medicare patients into your practice.
  2. Accept Medicare patients in your practice ONLY if what you are providing is not a covered service.

Number 1 is the easiest step obviously and what I recommend you do… But, if your target market are older individuals who have Medicare, you need to have some plans in place.

If the service you provide is not covered by Medicare, then you can charge the patient cash. How do you know what is covered and what is not? Check out this link:

https://www.medicare.gov/coverage/concierge-care

So for example, medical cannabis evaluations are not covered by Medicare, therefore, I do not worry about this. Stem cell injections are not covered by Medicare, therefore I do not worry about this.

You need to determine if what you are providing is NEVER covered or CAN BE covered by Medicare. CMS states that if you are charging a Medicare patient cash for a service that Medicare usually covers, then you need to provide the patient an “Advance Beneficiary Notice of Noncoverage” (ABN). This basically is a statement that lists why the service is not covered by Medicare. You MUST provide this to your Medicare patients if what you are providing COULD be covered by Medicare.

For example, I have a 66-year-old man who has a testosterone level of 425 but I feel like he could still benefit from treatment. Medicare will not cover this because the total testosterone level is not <300. Therefore, if I provide him an ABN, then I could technically charge him cash (sounds like a pain in the ass right? I don’t even bother… It is not worth the headache).

If the services you are providing are NEVER covered by Medicare, then you can skip this. CMS states that an ABN is not required for items or services that Medicare NEVER covers. Guess what? Medical cannabis, stem cells, aesthetics, IV infusion therapy, etc. are NEVER covered by Medicare. Yeehaw! Now I don’t have to provide an ABN!

This is what happens when the government has its fingers in everything, it just creates more regulations and speed bumps to those who just want to practice freely. Regardless, these are the rules, and you need to understand them.

So remember, if you want to open a cash practice you only have a few options when dealing with Medicare patients:

  1. Don’t see Medicare patients and don’t worry about it (highly recommended).
  2. Opt out of Medicare (if you want to maintain employment, this is a no-go).
  3. See Medicare patients but ensure the service is not covered (if it COULD be covered, you need to provide an ABN. If it is NEVER covered, then you don’t need to worry about it).

What about Medicaid and private insurance? As long as the LLC you are functioning under for your cash practice is not credentialed with these entities, you do not need to worry about it. Check out this article for more information about Medicaid as it is a “greyish” area, but from my understanding, you shouldn’t worry about it like you need to with Medicare.

As always, seek legal counsel when creating a practice where there are grey or questionable areas.

41 Responses

  1. Want to clear this up. .. I am Medicare certified through my current job in Georgia. I will be providing telemedicine in florida. I will set up an LLC .. so I can see Medicare patients in florida for cash clinic ?. Am I right?

    1. Medicare is federal, so it doesn’t matter what state you are in. As long as you are providing NON-COVERED services, then you can see Medicare patients. You cannot charge them cash for a COVERED service.

  2. Great information! I’m so glad I came across this site! Thank you.
    I may be joining a physician in his northern VA concierge practice. He has opted out of Medicare, but we’re unsure if I have to do so. Do you happen to know if I do not practice using my NP NPI, but rather the group’s NPI, should I have to opt-out? I’d rather not as it seems like a giant hassle, particularly if I later move on. Thank you

    1. Being credentialed with Medicare is an individual thing, so it doesn’t matter whos NPI you are functioning under… If they are cash only, you cannot see patients with Medicare for covered services.

      1. Hi Justin, Can a FNP work at both a private pay clinic and a clinic that does take medicare? She does not own either one of them. She is an employee?

  3. If you are a cash business for say a mobil COVID testing for cash only is there different rules? Or as long as I provide them with an ABN then I am OK? I plan to continue with my primary job in family practice so I need to remain opted in. Another question, if I am offering TRT for cash only can they get their labs drawn somewhere else so their insurance pays for it?

    1. Yes, just provide them an ABN if they have Medicare.

      Yep, they can use their insurance for labs. Discussed in the course.

  4. I am a NP in TN. Currently i have a 1099 practice in 2 different OBGYN clinics 2 days a week. I service their patients for pelvic floor therapy and I also have a1099 job where I complete virtual health risk assessments. At the OBGYN clinics, I complete a superbill for the services I complete and the office uses the super bill to submit for reimbursement. I see Medicare and Commercial patients at these locations, (I am not credentialed here) I am paid an hourly rate and do not handle any “billing” myself. With job #2 the employer does the billing also. I only complete a virtual exam ( I went through the credentialing process with them)
    Once I open my cash based clinic for pelvic floor how do I proceed ? I do not prescribe , only provide E stim treatment and biofeedback. Can I see all patients cash ? I plan to continue servicing OBGYN clinics at their location and also my clinic and possible home visits, and discontinue Job #2 once the clinic is open.

    1. Yes, you can continue to see patients cash, you would just avoid Medicare patients if this is a covered service for them.

  5. Finally!! A website that is relevant to what I have been trying to get answers for.
    I’m a psychiatrist who works at a hospital. I see patients and the hospital bills insurance, medicaid and medicare. Obviously hospital keeps the collections and I get a salary. If I want to start a cash only practice (separate LLC), it looks like I can do so with patients who have insurance and medicaid (not planning to bill those payors) and should NOT take Medicare patients. Correct?

    Does a cash practice need its own NPI?
    Thanks again.

      1. So just to make sure I understand I can start an LLC and accept cash but not see Medicare patients as a side business while I work full time at my employer. All I need is an EMR and liability insurance after I start my LLC ?

        1. Yes you can do that. It is a little more complicated than just getting an EMR and insurance, but starting a practice is relatively straight forward. Just follow the steps in the courses.

  6. Can a business that performs independent annual physical exams (Since Medicare does not cover yearly physical exams- they only cover an annual wellness visit) charge a Medicare patient for this service?

  7. What if a patient tells me they are not covered by Medicare and want to cash pay, but they actually are covered and don’t know it? Is there a database to check to be sure a patient truly isn’t covered?

    1. Then I believe them. It is not my job to verify what kind of insurance every single patient has. If they tell me they don’t have Medicare or Medicaid, I document it, and then I don’t worry about it.

  8. If provider A is licensed to practice in the US and in another country and is also credentialed through medicare, and the medicare patient comes to visit them in a different country where they practice under the other country’s license, and bills them privately, surely this would be legal as medicare does not cover out of country services — right? If this provider A then provided a prescription and the patient took the prescription out of the non-US country and attempted to fill in the state where this medicare covered person resided, this could be problematic — or not? Medicare would not regulate providers and billing practices when the providers are practicing out of the country, right?

    1. Yes, that would be legal.

      Nah, I wouldn’t think that would be problematic.

      And correct.

      I wouldn’t worry about this scenario above personally…

      1. Is it possible (legal) to have a mostly cash practice, accept cash payment from Medicare patients on day is service and give Medicare patients my super bill to be reimbursed from Medicare directly? Would another option be for me to submit bill for Medicare patients only?

        1. No, if you are providing a covered service you can’t bill them at all. You must bill Medicare. I just don’t see Medicare patients… and the good news is that most Medicare patients don’t utilize cash based niche services.

  9. I work as a full time NP with a large hospital system and am credentialed with all commercial insurances, Medicare and Medicaid. One of the docs left to open a private practice and wants me to come on board part time as a 1099 employee. He doesn’t accept Medicare or Medicaid. If I do a side gig with him, i don’t want to be only cash pay, and want to accept some insurances to keep patients coming in. I would like to accept only commercial insurance and not Medicare or Medicaid.

    Can I work with the hospital system and accept all insurance (including Medicare and Medicaid), while working a side gig and accept only commercial insurance without Medicare or Medicaid?

        1. You have to opt out if you want to see them without resitrction. This is the thing though with cash practices – you won’t be seeing many of these patients anyways, so don’t stress out about it. Most of the niche services are not covered by Medicare, so you can bill the patients cash. Or you simply just don’t see these patients. That is what we have been doing at our men’s health clinic. We just don’t see people over the age of 65 with Medicare. Problem fixed.

  10. I am credentialed with a company and do wound care as NP in Illinois however, they pay me as 1099 and they do the billing. I have an offer from a group home to see their patients regularly but invoice them through my own LLC. I will not be doing any billing and will not be credentialed with them. When I invoice them they will pay my LLC directly. Is this ok? FYI…the individuals that live in their group home do have Medicare and Medicaid.

  11. Can I see a medicare/medicaid patient who is a friend, provide them care at no-charge including write a prescription for antibiotics?

  12. I am located in Florida. I work full time in a clinic but recently opened my own clinic on the side. LLC. I accept only cash payments. Just to clarify, I cannot take Medicare patients correct? Would this also apply for Medicaid or tri-care patients as well? I also have people who sponsor patients, so most of my patients visits are paid by someone else, can I accept these type payments for the above patients? Thank you for your time.

    1. It typically only applies to Medicare in most states, not sure about FL in terms of Medicaid. You can still see them for non covered services. I don’t see why you couldnt take those payments.

  13. So how does this apply if you have never been credentialed with insurance, medicaid or medicare? I’m a new NP and only take cash as I do weight loss, TRT, vitamins, stem cells and PI claims. Do I need to opt out somehow or does it not matter since I’ve never signed up with anyone?

  14. So, I’m not credentialled with Medicare with no opt-out on file, but all the other providers in the office were previously credentialed and have opt-outs on file. They have private contracts with medicare pts when they come in to be able to treat them, but my concern is do I also need an opt-out on file to see those patients for services typically covered by Medicare?

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