Billing Medicare: What’s Covered & What’s Not
Or, put another way—what services can be cash pay because they aren’t billable to Medicare?
Since occupational therapists can’t opt out of Medicare, any covered services must be billed to Medicare. However, Medicare doesn’t cover everything, which means certain services can be offered as cash pay instead.
If your primary client base is older adults, you might want to explore a hybrid practice model—where you bill Medicare for covered services but also offer non-covered services for private pay.
Non-Billable Situations & Services
Here are some specific scenarios where billing Medicare is not allowed—and where cash-pay may be an option instead.
1. Non-Skilled Services
Medicare only covers services that are considered skilled and medically necessary. If a service doesn’t require the expertise of a therapist, it’s not billable—even if you or another licensed therapist provide it.
🚫 Examples of non-skilled services:
- General wellness or education programs (e.g., a falls prevention workshop)
- Coaching services (since coaching is typically about guiding vs. direct treatment)
- Home safety assessments that don’t require skilled therapy
- Any service that doesn’t meet Medicare’s “reasonable and necessary” criteria
💡 Cash-Pay Opportunity: These types of services can be offered on a private-pay basis!
2. Services Provided Without Proper Supervision
In private practice settings, occupational therapy assistants (OTAs) must be directly supervised by an OT when providing Medicare-covered services. If an OTA provides services without this supervision, the services cannot be billed to Medicare.
3. Services Performed by Non-Qualified Personnel
Medicare only pays for therapy provided by a licensed OT, PT, or SLP. Services performed by other professionals—even if they are healthcare providers—are not billable under OT services.
🚫 Examples of non-qualified personnel for Medicare billing:
- Athletic trainers
- Massage therapists
- Recreational therapists
- Kinesiotherapists
- Low vision specialists (if not an OT)
💡 What this means: If you collaborate with any of these professionals, their portion of the service cannot be billed under OT. Instead, you may need alternative payment arrangements (e.g., direct client payment or subcontracting).
4. Services Provided Without an Advanced Beneficiary Notice (ABN)
If a service might be covered by Medicare but is likely to be denied, you must obtain a signed ABN before providing the service if you want to bill the client privately.
✅ Example:
- A client wants a replacement orthotic, but Medicare only covers a new one every 5 years. Since this is a covered service outside the standard timeframe, it will likely be denied—but with an ABN, you can bill the client privately.
🚨 Without an ABN, you cannot bill the client if Medicare denies the claim!
5. Services That Are Bundled Under Another Payment Model
Some services are already included in a bundled Medicare payment to another provider, meaning you can’t bill them separately.
✅ Example:
Under the GUIDE model for dementia care, caregiver training is included in a bundled payment to a primary provider. If you provide caregiver training under this model, you would need to:
- Work with the primary provider to be compensated for your services
- Not bill Medicare separately for the training
💡 Tip: Always check if a service is part of a Medicare bundled payment program before billing!
6. Services That Violate Medicare Laws
Certain referral relationships and billing practices are illegal under Medicare rules—even if the services themselves are medically necessary.
🚫 What’s not allowed?
- Violating the Stark Law (e.g., a physician referring patients to a clinic where a family member works)
- Breaking the Anti-Kickback Statute (e.g., giving financial incentives for referrals)
💡 What to do instead? Always ensure your referral and billing relationships follow federal and state laws to avoid compliance issues.
Want to Learn More?
Navigating Medicare billing can be tricky, but you don’t have to do it alone! If you’re an AOTA member, they have fantastic resources on billing as a private practitioner here.