CMS Is Weighing Automatic Medicare Advantage Enrollment. Here Is What PT/OT/SLP Practices Need to Understand.
CMS is actively exploring a policy that would flip the Medicare enrollment default, moving new beneficiaries out of traditional fee-for-service Medicare and into Medicare Advantage plans automatically, unless they opt out.
Chris Klomp, CMS director of Medicare and deputy administrator, confirmed to STAT News that his team is evaluating models for automatic enrollment into either an MA plan or an accountable care organization under the Medicare Shared Savings Program. Klomp, who also serves as senior advisor to HHS Secretary Robert F. Kennedy Jr., said either arrangement would be preferable to the current default of traditional fee-for-service Medicare.
This aligns directly with the Project 2025 policy blueprint, which calls explicitly for making Medicare Advantage the default enrollment option. Other Project 2025 MA recommendations include replacing the current formula-based payment model with competitive bidding, restructuring risk adjustment, and removing what it characterizes as micromanagement of MA plan operations.
Nothing is law yet. But for PT, OT, and SLP practices, especially those running at scale, this is worth tracking carefully. Here is why.
Medicare Advantage Already Dominates. Automatic Enrollment Would Accelerate the Trend.
More than half of all Medicare beneficiaries are currently enrolled in a Medicare Advantage plan. That number has been climbing steadily for years, and it has already reshaped the billing environment for outpatient therapy practices in ways that traditional Medicare never did.
A default enrollment policy would not create a new dynamic. It would accelerate an existing one. Practices that have been managing MA as a secondary payer class, or treating it as a smaller slice of their Medicare volume, would see that calculus change quickly.
If your PT practice currently sees a meaningful volume of traditional Medicare patients, those patients are your most predictable Medicare payers from a billing standpoint. A published fee schedule, relatively consistent adjudication rules, and a defined documentation standard for 97110, 97140, 97112, and the evaluation codes. Appeals have a known path. Denials are more predictable.
Medicare Advantage plans are a fundamentally different operating environment, and there are as many environments as there are plans.
What Medicare Advantage Billing Actually Looks Like for PT/OT/SLP Practices
Every Medicare Advantage plan is a private contract. Aetna Medicare Advantage, UHC Medicare Advantage, and BCBS Medicare Advantage are not interchangeable. Each plan sets its own reimbursement rates, its own prior authorization requirements, its own claim submission rules, and its own appeal procedures.
For a multi-location PT or OT practice already managing commercial payer contracts, Medicaid, and traditional Medicare, Medicare Advantage volume growth means more payer-specific rule sets to maintain, more authorization touchpoints, and more denial vectors, for a population that is typically among your highest visit-frequency segments.
The denial patterns in Medicare Advantage PT billing are specific and worth naming:
- CO-4 denials (inconsistent modifier use) appear more frequently in MA than in traditional Medicare because MA plans often apply modifier logic that diverges from standard CMS rules. A claim for 97140 with GP and a 59 modifier does not always adjudicate identically across MA carriers.
- CO-97 denials (bundled or included in another service) are more aggressive in MA than in traditional Medicare. NCCI-equivalent bundling edits are applied inconsistently across plans.
- CO-50 denials (not medically necessary) reflect the fact that MA plans maintain their own medical necessity criteria for PT visit frequency and episode length, criteria that can deviate materially from Medicare LCD standards.
At current Medicare Advantage volume, these denial types are manageable for practices with a mature revenue cycle. At significantly higher MA volume, which default enrollment would drive, denial management capacity becomes a material constraint on PT practice revenue.
What Your PT Practice Billing Operation Should Be Doing Now
Here is the detail buried in the current policy conversation that PT practice operators should pay close attention to. MA insurers have been struggling over the past year with higher-than-expected medical utilization and the financial pressure that comes with it.
Medicare Advantage plans operate on a value-based, capitated model. Pay is not tied to service volume. When utilization runs higher than actuarial projections, which it has, MA plans absorb the financial hit. The response, historically, has been tightening prior authorization criteria, increasing claim scrutiny, and reducing Medicare Advantage reimbursement rates at contract renewal.
PT is a high-utilization discipline by its clinical nature. A post-surgical knee patient may require 20 to 30 visits. A neurological rehab patient more. When MA plans are under financial pressure, therapy services are a line item they have demonstrated a willingness to manage aggressively.
A policy that dramatically increases Medicare Advantage enrollment at the same moment MA insurers are recalibrating to control utilization costs is not a neutral development for PT and OT revenue cycles.
The Utilization Problem Works Against PT/OT/SLP Practices
This proposal has a long road from policy discussion to CMS rulemaking to implementation. But the underlying trend, Medicare Advantage market share growth, does not need this proposal to continue. It is already happening.
There are two things a well-run PT or OT practice should be doing regardless of what CMS ultimately decides.
Audit your current Medicare Advantage exposure with specificity. What percentage of your Medicare revenue runs through MA versus traditional Part B today? Break it down by carrier. What is your denial rate for each MA plan versus traditional Medicare? What is your net collection rate? What is your average days in AR by payer class? If you do not have clean answers to those questions, you do not have the baseline you need to manage what is already in front of you.
Stress-test your billing workflows against Medicare Advantage volume growth. If your MA Medicare volume doubled in the next 18 months, where does your revenue cycle break? Eligibility verification accuracy, knowing which plan a Medicare-age patient is actually enrolled in at the point of scheduling, becomes more critical as MA enrollment grows. Payer-specific rule configuration in your EMR, whether you are running Raintree, WebPT, or Prompt, needs to be accurate and current for each MA carrier you contract with. Appeal capacity and denial tracking need to scale with volume.
The practices that absorb payer mix shifts well are the ones that have already built payer-specific billing discipline into their operations. The ones that get hurt are the ones running a one-size-fits-all Medicare workflow against a payer landscape that has not been one-size-fits-all for years.
What Your PT Practice Billing Operation Should Be Doing Now
CMS has not acted yet. The proposal may move slowly, get modified, or stall in rulemaking. But the direction of travel is clear. Medicare Advantage enrollment is growing, MA is increasingly where your Medicare patients land, and the billing complexity that comes with MA is not getting simpler.
A policy change that makes MA the explicit default would accelerate a shift that is already structurally underway. Treating it as a future problem is the wrong frame. The operational work of building Medicare Advantage billing competency is a present-tense revenue cycle priority for PT, OT, and SLP practices.
