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Medicare Updates

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  • Clarification of Payment Policy Changes for Negative Pressure Wound Therapy (NPWT) Using a Disposable Device and the Outlier Payment Methodology for Home Health Services

    24 Feb 2017 11:33 AM | Zachary Edgar (Administrator)

    Effective Date: 3/27/2017

    In the CY 2017 HH PPS Final Rule, CMS finalized clarifications and revisions to policies related to payment for furnishing of NPWT using a disposable device, as well as change to the methodology used to calculate outlier payments to HHAs.

    Negative Pressure Wound Therapy Using a Disposable Device

    The Consolidated Appropriations Act of 2016 (Pub. L. 114-113) requires a separate payment to a HHA for an applicable disposable device when furnished on or after January 1, 2017, to an individual who receives Home Health Services for which payment is made under the Medicare home health benefit. The legislation defines an applicable device as a disposable NPWT device that is an integrated system comprised of a non-manual vacuum pump, a receptacle for collecting exudate, and dressings for the purposes of wound therapy used in lieu of a conventional NPWT DME system. The separate payment amount for a disposable NPWT device is to be set equal to the amount of the payment that would be made under the Medicare Hospital Outpatient Prospective Payment System (OPPS) using the Level I HCPCS code, otherwise referred to as Current Procedural Terminology (CPT® 4) codes, for which the description for a professional service includes the furnishing of such a device.

    Payment for HH visits related to wound care, but not requiring the furnishing of an entirely new disposable NPWT device, will be covered by the HH PPS episode payment and must be billed using the HH claim. Where a HH visit is exclusively for the purpose of furnishing NPWT using a disposable device, the HHA will submit only a type of claim that will be paid for separately outside the HH PPS (Type of Bill (TOB) 34x). Where, however, the home health visit includes the provision of other home health services in addition to, and separate from, furnishing NPWT using a disposable device, the HHA will submit both a home health claim and a TOB 34x—the home health claim covering the other home health services, and the TOB 34x capturing the furnishing of NPWT using a disposable device.

    EXAMPLE: A patient requires NPWT for the treatment of a wound. On Monday, a nurse assesses a patient’s wound, applies a new disposable NPWT device, and provides wound care education to the patient and family. The nurse returns on Thursday for wound assessment and replaces the fluid management system (or dressing) for the existing disposable NPWT, but does not replace the entire device. The nurse returns the following Monday, assesses the patient’s condition and the wound, and replaces the device that had been applied on the previous Monday with a new disposable NPWT device. In this scenario, the billing procedures are as follows:

    For both Monday visits, all the services provided by the nurse were associated with furnishing NPWT using a disposable device. The nurse did not provide any services that were not associated with furnishing NPWT using a disposable device. Therefore, all the nursing services for both Monday visits should be reported on TOB 34x with CPT code 97607 or 97608. None of the services should be reported on the HH claim.

    For the Thursday visit, the nurse checked the wound, but did not apply a new disposable NPWT device. Thus, even though the nurse provided care related to the wound, those services would not be considered furnishing NPWT using a disposable device.

    Therefore, the services should be reported on TOB 32x and no services should be reported on TOB 34x.

    Outlier Payments

    The Centers for Medicare & Medicaid Services (CMS) finalized the proposal to change the methodology used to calculate outlier payments, moving from a cost-per-visit approach to a cost-per-unit approach (1 unit = 15 minutes). This approach more accurately reflects the cost of an outlier episode of care and thus better aligns outlier payments with episode costs than the cost-per-visit approach.

    Reference

    MLN Matters Number: MM9898


  • Updated Editing of Professional Therapy Services

    27 Jan 2017 11:20 AM | Zachary Edgar (Administrator)

    Effective Date: 7/3/2017

    CR9933 implements the following payment policies related to professional claims for therapy services for the new CPT codes for PT and OT evaluative procedures – claims without the required information will be returned/rejected:

    Therapy Modifiers

    The new PT and OT codes are added to the current list of evaluative procedures that require a specific therapy modifier to identify the plan of care under which the services are delivered to be on the claim for therapy services. Therapy modifiers GP, GO, or GN are required to report the type of therapy plan of care – PT, OT, or speech-language pathology, respectively. This payment policy requires that each new PT evaluative procedure code – 97161, 97162, 97163 or 97164 – to be accompanied by the GP modifier; and, (b) each new code for an OT evaluative procedure – 97165, 97166, 97167 or 97168 – be reported with the GO modifier.

    Functional Reporting

    In addition to other Functional Reporting requirements, Medicare payment policy requires Functional Reporting, using G-codes and severity modifiers, when an evaluative procedure is furnished and billed. This notification adds the eight new codes for PT and OT evaluations and re-evaluations – 97161, 97162, 97163, 97164, 97165, 97166, 97167, and 97168 – to the procedure code list of evaluative procedures that necessitate Functional Reporting. A severity modifier (CH – CN) is required to accompany each functional G-code (G8978-G8999, G9158-9176, and G9186) on the same line of service.

    For each evaluative procedure code, Functional Reporting requires either two or three functional G-codes and related severity modifiers be on the same claim. Two G-codes are typically reported on specified claims throughout the therapy episode. However, when an evaluative service is furnished that represents a one-time therapy visit, the therapy clinician reports all three G-codes in the functional limitation set – G-codes for Current Status, Goal Status and Discharge Status.

    CMS coding requirements for Functional Reporting applied through CR9933 ensure that at least two G-codes in a functional set and their corresponding severity modifiers are present on the same claim with any one of the codes on this evaluative procedure code list. The required reporting of G-codes includes: (a) G-codes for Current Status and Goal Status; or, (b) G-codes for Discharge Status and Goal Status.

    For the documentation requirements related to Functional Reporting, please refer to the “Medicare Benefits Policy Manual,” Chapter 15, Section 220.4, which is available at https://www.cms.gov/Regulations-andGuidance/Guidance/Manuals/downloads/bp102c15.pdf.

    Claims Coding Requirements

    Therapy Modifiers. Your MAC will return/reject professional claims when:

    • Reporting codes 97161, 97162, 97163, or 97164 without the GP modifier.
    • Reporting codes 97165, 97166, 97167, or 97168 without the GO modifier.
    • Reporting an “always therapy” code without a therapy modifier

    For these returned/rejected claims, your MAC will supply the following messages:

    • Group code CO
    • CARC – 4: The procedure code is inconsistent with the modifier used or a required modifier is missing.

    Functional Reporting. Your MAC will return/reject claims when:

    • The professional claims you submit for the new therapy evaluative procedures, codes 97161- 97168, without including one of the following pairs of G-codes/severity modifiers required for Functional Reporting: (a) A Current Status G-code/severity modifier paired with a Goal Status G-code/severity modifier; or, (b) A Goal Status G-code/severity modifier paired with a Discharge Status G-code/severity modifier.

    Your MAC will provide the following remittance messages when returning such submissions:

    • Group code of CO (contractual obligation)
    • Claim Adjustment Reason Code (CARC) – 16: Claim/service lacks information or has submission/billing error(s) which is needed for adjudication.
    • Remittance Advice Remarks Code (RARC) – N572: This procedure is not payable unless non-payable reporting codes and appropriate modifiers are submitted.

    Reference

    MLN Matters Number: MM9933

  • Update to Editing of Therapy Services to Reflect Coding Changes

    1 Dec 2016 1:43 PM | Zachary Edgar (Administrator)

    December 1, 2016

    This change request instructs contractors to add new Common Procedure Terminology (CPT) codes to report physical and occupational therapy evaluations.

    A. Background: Original Medicare claims processing systems contain edits to ensure claims for the evaluative procedures furnished by rehabilitative therapy clinicians – including physical therapists, occupational therapists and speech-language pathologists – are coded correctly. These edits ensure that when the codes for evaluative services are submitted, the therapy modifier (GP, GO or GN) that reports the type of therapy plan of care is consistent with the discipline described by the evaluation or re-evaluation code. The edits also ensure that Functional Reporting occurs, i.e., that functional G-codes, along with severity modifiers, always accompany codes for therapy evaluative services.

    For calendar year (CY) 2017, eight new CPT codes (97161-97168) were created to replace existing codes (97001-97004) to report physical therapy (PT) and occupational therapy (OT) evaluations and reevaluations. The new CPT code descriptors include specific components that are required for reporting as well as the typical face-to-face times. In another recent issuance, Change Request (CR) 9782, we described the new PT and OT code sets, each comprised of three new codes for evaluation – stratified by low, moderate, and high complexity – and one code for re-evaluation. CR 9782 designated all eight new codes as “always therapy” (always require a therapy modifier) and added them to the 2017 therapy code list located on the Centers for Medicare & Medicaid Services (CMS) website at http://www.cms.gov/Medicare/Billing/TherapyServices/index.html. For a complete listing of the new codes, their CPT long descriptors, and related policies, please refer to CR 9782.

    This notification applies the coding requirements for certain evaluative procedures that are currently outlined in Pub. 100-04, Medicare Claims Processing Manual (MCPM), Chapter 5 to the new codes for PT and OT evaluations and re-evaluations. These coding requirements include the payment policies for evaluative procedures that (a) require the application of discipline-specific therapy modifiers and (b) necessitate Functional Reporting using G-codes and severity modifiers. The new codes are also added to the list of evaluation codes that CMS will except from the caps after the therapy caps are reached when an evaluation is necessary, e.g., to determine if the current status of the beneficiary requires therapy services.

    In addition, this Change Request (CR) updates and clarifies information in MCPM, Pub. 100-04, Chapter 5.

    B. Policy: This notification implements the following payment policies related to claims for therapy services for the new codes for PT and OT evaluative procedures – claims without the required information will be returned as unprocessable:

    Therapy modifiers. The new PT and OT codes are added to the current list of evaluative procedures that require a specific therapy modifier to identify the plan of care under which the services are delivered to be on the claim for therapy services. Therapy modifiers GP, GO or GN are required to report the type of therapy plan of care – PT, OT, or speech language pathology (SLP), respectively. This payment policy requires that each new PT evaluative procedure code – 97161, 97162, 97163 or 97164 – to be accompanied by the GP modifier; and, (b) each new code for an OT evaluative procedure – 97165, 97166, 97167 or 97168 – be reported with the GO modifier.

    Functional Reporting (FR). In addition to other Functional Reporting requirements, current payment policy requires Functional Reporting, using G-codes and severity modifiers, when an evaluative procedure is furnished and billed. This notification adds the eight new codes for PT and OT evaluations and reevaluations – 97161, 97162, 97163, 97164, 97165, 97166, 97167, and 97168 – to the procedure code list of evaluative procedures that necessitate Functional Reporting. A severity modifier (CH – CN) is required to accompany each functional G-code (G8978-G8999, G9158-9176, and G9186) on the same line of service.

    For each evaluative procedure code, Functional Reporting requires either two or three functional G-codes and related severity modifiers be on the same claim. Two G-codes are typically reported on specified claims throughout the therapy episode. However, when an evaluative service is furnished that represents a one-time therapy visit, the therapy clinician reports all three G-codes in the functional limitation set – G-codes for Current Status, Goal Status and Discharge Status. For the documentation requirements related to Functional Reporting, please refer to Pub. 100-02, Medicare Benefits Policy Manual, chapter 15, section 220.4.

    CMS coding requirements for Functional Reporting applied through this notification ensure that at least two G-codes in a functional set and their corresponding severity modifiers are present on the same claim with any one of the codes on this evaluative procedure code list. The required reporting of G-codes includes: (a) G-codes for Current Status and Goal Status; or, (b) G-codes for Discharge Status and Goal Status.

    Reference

    Medicare Transmittal # R3670CP

    December 1, 2016


  • 2017 Annual Update to the Therapy Code List

    10 Nov 2016 1:45 PM | Zachary Edgar (Administrator)

    November 10, 2016

    SUMMARY OF CHANGES: This Change Request updates the list of codes that sometimes or always describe therapy services. The additions, changes, and deletions to the therapy code list reflect those made in the CY 2017 Healthcare Common Procedure Coding System and Current Procedural Terminology, Fourth Edition (HCPCS/CPT-4). The attached Recurring Update Notification applies to Chapter 5, Section 10.6

    A. Background: Section 1834(k)(5) of the Act requires that all claims for outpatient rehabilitation therapy services and all comprehensive outpatient rehabilitation facility services be reported using a uniform coding system. The CY 2017 Healthcare Common Procedure Coding System and Current Procedural Terminology, Fourth Edition (HCPCS/CPT-4) is the coding system used for the reporting of these services.

    This change request (CR) updates the list of codes that sometimes or always describe therapy services. The additions, changes, and deletions to the therapy code list reflect those made in the CY 2017 HCPCS/CPT-4. The therapy code listing can be found on the Centers for Medicare & Medicaid Services (CMS) Web site at http://www.cms.gov/Medicare/Billing/TherapyServices/index.html.

    B. Policy:The policies implemented in this notification were discussed in CY 2017 Medicare Physician Fee Schedule (MPFS) rulemaking. This CR updates the therapy code list and associated policies for CY 2017, as follows:

    For CY 2017, the Current Procedural Terminology (CPT) Editorial Panel created eight new codes (97161- 97168) to replace the 4-code set (97001-97004) for physical therapy (PT) and occupational therapy (OT) evaluative procedures. The new CPT code descriptors for PT and OT evaluative procedures include specific components that are required for reporting as well as the corresponding typical face-to-face times for each service. Refer to Tables 1 and 2 in the Attachment for a complete listing of the new CPT codes for PT and OT evaluative procedures and their long descriptors.

    PT and OT evaluation codes. The CPT Editorial Panel created three new codes to replace each existing PT and OT evaluation code, 97001 and 97003, respectively. These new evaluation codes are based on patient complexity and the level of clinical decision-making – low, moderate and high complexity: for PT, codes 97161, 97162 and 97163; and for OT, codes 97165, 97166 and 97167.

    PT and OT re-evaluation codes. One new PT code, 97164, and one new OT code, 97168, were created to replace the existing codes – 97002 and 97004, respectively. The re-evaluation codes are reported for an established patient’s when a revised plan of care is indicated.

    Just as their predecessor codes were, the new codes are “always therapy” and must be reported with the appropriate therapy modifier, GP or GO, to indicate that the services are furnished under a PT or OT plan of care, respectively.

    The therapy code list is updated with eight new “always therapy” codes, using their CPT short descriptors, as follows:

    The new codes for PT Evaluative procedures (97161-97164):

    • The three new PT evaluation codes 97161, 97162, and 97163 replace code 97001
    • Add: 97161 - PT EVAL LOW COMPLEX 20 MIN
    • Add: 97162 - PT EVAL MOD COMPLEX 30 MIN
    • Add: 97163 - PT EVAL HIGH COMPLEX 45 MIN
    • Delete: 97001 - PT EVALUATION
    • The new PT re-evaluation code 97164 replaces code 97002
    • Add: 97164 - PT RE-EVAL EST PLAN CARE
    • Delete: 97002 - PT RE-EVALUATION

    The new codes for OT Evaluative procedures (97165-97168):

    • The three new OT evaluation codes 97165, 97166, and 97167 replace code 97003
    • Add: 97165 - OT EVAL LOW COMPLEX 30 MIN
    • Add: 97166 - OT EVAL MOD COMPLEX 45 MIN
    • Add: 97167 - OT EVAL HIGH COMPLEX 60 MIN
    • Delete: 97003 – OT EVALUATION
    •  The new OT re-evaluation code 97168 replaces 97004
    • Add: 97168 - OT RE-EVAL EST PLAN CARE
    • Delete: 97004 – OT RE-EVALUATION

    For CY 2017 - New CPT Codes and Long Descriptors for PT Evaluative Procedures

    97161 - Physical therapy evaluation: low complexity, requiring these components:

    • A history with no personal factors and/or comorbidities that impact the plan of care;
    • An examination of body system(s) using standardized tests and measures addressing 1-2 elements from any of the following: body structures and functions, activity limitations, and/or participation restrictions;
    • A clinical presentation with stable and/or uncomplicated characteristics; and
    • Clinical decision making of low complexity using standardized patient assessment instrument and/or measurable assessment of functional outcome.

    Typically, 20 minutes are spent face-to-face with the patient and/or family.

    97162 - Physical therapy evaluation: moderate complexity, requiring these components:

    • A history of present problem with 1-2 personal factors and/or comorbidities that impact the plan of care;
    • An examination of body systems using standardized tests and measures in addressing a total of 3 or more elements from any of the following: body structures and functions, activity limitations, and/or participation restrictions;
    • An evolving clinical presentation with changing characteristics; and
    • Clinical decision making of moderate complexity using standardized patient assessment instrument and/or measurable assessment of functional outcome.

    Typically, 30 minutes are spent face-to-face with the patient and/or family.

    97163 - Physical therapy evaluation: high complexity, requiring these components:

    • A history of present problem with 3 or more personal factors and/or comorbidities that impact the plan of care;
    • An examination of body systems using standardized tests and measures addressing a total of 4 or more elements from any of the following: body structures and functions, activity limitations, and/or participation restrictions;
    • A clinical presentation with unstable and unpredictable characteristics; and
    • Clinical decision making of high complexity using standardized patient assessment instrument and/or measurable assessment of functional outcome.

    Typically, 45 minutes are spent face-to-face with the patient and/or family.

    97164 - Re-evaluation of physical therapy established plan of care, requiring these components:

    • An examination including a review of history and use of standardized tests and measures is required; and
    • Revised plan of care using a standardized patient assessment instrument and/or measurable assessment of functional outcome.

    Typically, 20 minutes are spent face-to-face with the patient and/or family.

    For CY 2017: New CPT Codes and Long Descriptors for OT Evaluative Procedures

    97165 - Occupational therapy evaluation, low complexity, requiring these components:

    • An occupational profile and medical and therapy history, which includes a brief history including review of medical and/or therapy records relating to the presenting problem;
    • An assessment(s) that identifies 1-3 performance deficits (i.e., relating to physical, cognitive, or psychosocial skills) that result in activity limitations and/or participation restrictions; and
    • Clinical decision making of low complexity, which includes an analysis of the occupational profile, analysis of data from problem-focused assessment(s), and consideration of a limited number of treatment options. Patient presents with no comorbidities that affect occupational performance. Modification of tasks or assistance (e.g., physical or verbal) with assessment(s) is not necessary to enable completion of evaluation component.

    Typically, 30 minutes are spent face-to-face with the patient and/or family.

    97166 - Occupational therapy evaluation, moderate complexity, requiring these components:

    • An occupational profile and medical and therapy history, which includes an expanded review of medical and/or therapy records and additional review of physical, cognitive, or psychosocial history related to current functional performance;
    • An assessment(s) that identifies 3-5 performance deficits (i.e., relating to physical, cognitive, or psychosocial skills) that result in activity limitations and/or participation restrictions; and
    • Clinical decision making of moderate analytic complexity, which includes an analysis of the occupational profile, analysis of data from detailed assessment(s), and consideration of several treatment options. Patient may present with comorbidities that affect occupational performance. Minimal to moderate modification of tasks or assistance (e.g., physical or verbal) with assessment(s) is necessary to enable patient to complete evaluation component.

    Typically, 45 minutes are spent face-to-face with the patient and/or family.

    97167 - Occupational therapy evaluation, high complexity, requiring these components:

    • An occupational profile and medical and therapy history, which includes review of medical and/or therapy records and extensive additional review of physical, cognitive, or psychosocial history related to current functional performance;
    • An assessment(s) that identifies 5 or more performance deficits (i.e., relating to physical, cognitive, or psychosocial skills) that result in activity limitations and/or participation restrictions; and
    • Clinical decision making of high analytic complexity, which includes an analysis of the patient profile, analysis of data from comprehensive assessment(s), and consideration of multiple treatment options. Patient presents with comorbidities that affect occupational performance. Significant modification of tasks or assistance (e.g., physical or verbal) with assessment(s) is necessary to enable patient to complete evaluation component.

    Typically, 60 minutes are spent face-to-face with the patient and/or family.

    97168 - Re-evaluation of occupational therapy established plan of care, requiring these components:

    • An assessment of changes in patient functional or medical status with revised plan of care;
    • An update to the initial occupational profile to reflect changes in condition or environment that affect future interventions and/or goals; and
    • A revised plan of care. A formal reevaluation is performed when there is a documented change in functional status or a significant change to the plan of care is required.

    Typically, 30 minutes are spent face-to-face with the patient and/or family.

    Reference

    Medicare Transmittal # R3654CP

    November 10, 2016

  • Therapy Cap Values for Calendar Year (CY) 2017

    4 Nov 2016 1:55 PM | Zachary Edgar (Administrator)

    November 4, 2016

    Effective Date: January 1, 2017

    Background: The Balanced Budget Act of 1997, P.L. 105-33, Section 4541(c) applies, per beneficiary, annual financial limitations on expenses considered incurred for outpatient therapy services under Medicare Part B, commonly referred to as “therapy caps.” The therapy caps are updated each year based on the Medicare Economic Index. An exceptions process to the therapy caps for reasonable and medically necessary services was required by section 5107 of the Deficit Reduction Act of 2005. The exceptions process for the therapy caps has been continuously extended several times through subsequent legislation. Most recently, section 202 of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) extended the therapy caps exceptions process through December 31, 2017.

    Policy: Contractors shall update the allowed dollar amount for CY 2017 outpatient therapy limits to $1,980 for physical therapy and speech-language pathology combined and $1,980 for occupational therapy

    Reference

    Medicare Transmittal # R3644CP

    November 4, 2016


  • Correction to Applying Therapy Caps to Maryland Hospitals and Billing Requirement for Rehabilitation Agencies and Comprehensive Outpatient Rehabilitation Facilities (CORFs)

    4 Feb 2016 1:56 PM | Zachary Edgar (Administrator)

    February 4, 2016

    This Change Request (CR) modifies the requirements of CR 9223 to ensure therapy caps are applied correctly to claims from certain Maryland hospitals.

    Background:Change Request (CR) 9223 applied the therapy caps and related policies to Maryland outpatient hospital claims (Types of Bill 012x and 013x submitted with CMS Certification Numbers (CCNs) beginning with 21). The CR applied cap amounts based on the submitted charge amount on covered outpatient therapy service lines, before applying coinsurance or deductible. This is the correct application of the cap amounts for the majority of Maryland hospitals.

    However, certain specialty hospitals in Maryland are not paid under the Maryland All-Payer Model. These hospitals are paid for therapy services using the Medicare Physician Fee Schedule (MPFS) amounts. The therapy cap amounts for these claims should be the MPFS amount, before applying coinsurance or deductible, not the submitted charge. Since these hospitals also have CCNs beginning with 21, the implementation of CR 9223 caused Medicare systems to begin using the submitted charge amount instead.

    As a result of this error, the therapy cap and threshold totals for beneficiaries served by these specialty hospitals is incorrect. In many cases the totals may be overstated. The requirements below correct the error in Medicare systems and instruct the Medicare Administrative Contractors to adjust claims to correct the therapy cap totals for affected beneficiaries.

    Additionally, this CR adds instructions to the Medicare Claims Processing Manual to add a new billing requirement for rehabilitation agencies and CORFs when these providers operate multiple sites in differing payment localities as determined by the MPFS. These MPFS payment localities are determined by the 9- digit ZIP code where services are provided. .

    Policy:For MD hospitals, this CR contains no new policy. It corrects the implementation of the policy established in CR 9223.

    This CR adds a new billing requirement policy for rehabilitation agencies and CORFs. When rehabilitation agencies and CORFs furnish a service in an off-site location that is in a different 9-digit ZIP code from that of the primary or parent location, the off-site location ZIP code must be reported on the claim. Since these providers are paid subject to the MPFS, the new billing requirement ensures that payments are adjusted based on the applicable payment locality. Until now, rehabilitation agencies and CORFs did not have a mechanism to accurately report the 9-digit ZIP code for the services they provide in off-site locations with differing payment localities. Where a rehabilitation agency or CORF has only one service location, the ZIP code of the primary site of record is used as the MPFS payment locality.

    Reference

    Medicare Transmittal # R3454CP

    February 4, 2016


  • Therapy Cap Values for Calendar Year (CY) 2016

    25 Nov 2015 12:30 PM | Zachary Edgar (Administrator)

    November 25, 2015

    Background: The Balanced Budget Act of 1997, P.L. 105-33, Section 4541(c) applies, per beneficiary, annual financial limitations on expenses considered incurred for outpatient therapy services under Medicare Part B, commonly referred to as “ therapy caps”. The therapy caps are updated each year based on the Medicare Economic Index. An exceptions process to the therapy caps for reasonable and medically necessary services was required by section 5107 of the Deficit Reduction Act of 2005. The exceptions process for the therapy caps has been continuously extended several times through subsequent legislation. Most recently, section 202 of the Medicare Access and CHIP Reauthorization Act of 2015 extended the therapy caps exceptions process through December 31, 2017.

    Policy: Therapy caps for CY 2016 will be $1,960.

    Contractors shall update the allowed dollar amount for CY 2016 outpatient therapy limits to $1,960 for physical therapy and speech-language pathology combined and $1,960 for occupational therapy.

    Reference

    Medicare Transmittal # R3417CP

    November 25, 2015


  • Revisions to State Operations Manual (SOM), Chapter 2, Clarification of Requirements for Off-Premises Activities and Approval of Extension Locations for Providers of Outpatient Physical Therapy and Speech-Language Pathology Services

    30 Oct 2015 12:32 PM | Zachary Edgar (Administrator)

    2292B – Rehabilitation Agency, Clinic and Public Health Agency (Rev. 150, Issued: 10-30-15, Effective: 10-30-15, Implementation: 10-30-15)

    Two person duty requirement: Organizations must always have at least two persons (either of its own personnel or its contracted personnel) on duty on the premises anytime rehabilitation treatment is being provided to a patient. The two person requirement does not specify which staff must be on duty (in other words, professional staff or a combination of professional staff and support staff), but the organizations must consider the supervision required of support staff.

    This duty requirement can be verified by requesting staff or personnel time cards. The staff time cards can be compared against patient sign-in sheets if there are concerns regarding the two person duty requirement.

    Services provided in a patient’s residence are exempt from the two person duty requirement. Additionally, services provided in a patient’s room within an assisted living facility (ALF) or independent living facility (ILF) may be considered to be a patient’s residence and therefore also exempt from the two person on duty requirement. A common or general use area of the facility, such as a hallway, may be considered to be an extension of the patient’s room and residence and also exempt from the two person on duty requirement.

    This requirement is for the safety of the patients. It is not a new requirement, but is sometimes overlooked, particularly at a rehabilitation agency’s extension location(s). Refer to Interpretive Guidance Tag I-118 in Appendix E of the SOM.

    Supervision: A physical therapist may not supervise an occupational therapy assistant, nor, may an occupational therapist supervise a physical therapist assistant. Nonprofessional personnel (generally physical and occupational therapy aides) cannot be supervised by anyone other than the qualified physical or occupational therapist while performing patient care activities.

    Clinical records: The regulations at § 485.721 require clinical records be maintained on all patients served by the organization. A copy of the patient’s current clinical record should be kept at the practice location and readily accessible for prompt retrieval. Electronic records are acceptable but should be password or other method protected to maintain security and patient privacy.

    Administrator: The administrator (§ 485.709) is given internal control of the clinic or rehabilitation agency by the governing body. The administrator must assume overall administrative responsibility for the entirety of the organization’s operation including extension locations and/or off-premises activities. Furthermore, the administrator must serve as a full time administrator, meaning he can only be responsible for a single Medicare certified organization. It is important to determine whether the administrator can efficiently and effectively serve as administrator if the agency has several extension locations. Also, a competent individual must be available at each extension location to manage the day to day operations of that location on the days when the administrator is not onsite. That individual is responsible for reporting to the administrator.

    Governing body: The governing body (§ 485.709) (or designated person so functioning) has the legal responsibility for the overall clinic or rehabilitation agency operations (including conduct and compliance of the clinic or rehabilitation agency) and may be legally responsible for more than one clinic or rehabilitation agency. The governing body’s legal responsibility for the overall conduct of the clinic or rehabilitation agency cannot be delegated to any other entity (for example, a parent corporation). The number of individuals who serve on the governing body is determined by the organization/individuals who own the clinic or rehabilitation agency. The name of the owner(s) or corporate officer(s) (for a corporate entity) is fully disclosed to the State Agency. The governing body is expected to meet periodically, consistent with its by-laws.

    Contracts: An organization may provide services with direct hire employees (i.e., salaried personnel) and with those employees under arrangement (or contract) (§ 485.719). The employees hired under contract may provide services wherever the organization provides therapy services.

    Rehabilitation agencies may contract to provide outpatient therapy services at assisted living facilities (ALFs). In this instance, the rehabilitation agency has the administrative responsibility and supervisory oversight for the delivery of services in these facilities. In addition, the rehabilitation agency is responsible for maintaining clinical records for therapy services provided to the ALF patients.

    In situations when the OPT is seeing patients in an ALF or ILF, where there is no ongoing or permanent presence of the OPT, common areas do not need to be closed off when an individual therapy session extends beyond the patient’s room. However, OPTs must afford patients the opportunity for privacy at the patient’s request or when clinical situations warrant privacy.

    Any space leased, rented, or dedicated for the provision of OPT services, including space within an ALF or ILF that is designated for therapy service, must meet the two person on duty requirement and become a separately certified OPT or become approved as an extension location of a currently certified OPT. Leased or rented space that is dedicated to therapy services must be closed to non-therapy participants when services are being provided. See Section 3100 for additional guidance for situations and when a location must be approved as an extension site or separately certified.

    2298A - Criteria for Extension Location Approval

    It is the CMS RO (not the SA or AO) that has the final authority for approving the request for an extension location. The following criteria should be reviewed and assessed in a decision regarding the approval or denial of extension locations:

    • The extension location must have equipment and modalities appropriate for the needs of the patients it accepts for service.

    • The administrator and other supervisors at the primary site must be capable of adequate supervision of the staff at all extension locations to include management and overseeing operations of the extension location. The administrator may delegate aspects of administrative operations at extension locations provided the agency has internal policies and procedures ensuring coordinated oversight of all locations. The administrator or his/her designee should be available by telephone, at a minimum, and be able to arrive at the extension location in a reasonable amount of travel time.

    • Primary sites are generally able to meet the requirements for supervision and oversight when the extension location being requested is within 30 miles of the primary site. Requests for approval of extension locations beyond 30 miles must include adequate documentation to support the OPT’s ability to maintain supervision and oversight of these locations and that the services are being provided to a portion of the total geographic area served by the primary site. An example of evidence supporting this would include, but is not limited to, policies and procedures describing a structured program for supervision and oversight of activities at extension locations. This may include items such as scheduled teleconferences, videoconferencing, and site visits to facilitate administrative and personnel management. Additionally, OPTs may provide a written narrative to the CMS RO further describing their supervision and oversight of extension locations. The oversight program must ensure that the extension locations maintain compliance with all applicable aspects of the CoPs, even though they are not required to independently meet all the CoPs as a rehabilitation agency.

    • The extension location must provide the same level of privacy and dignity for its patients as the primary site does.

    • For a rehabilitation agency to establish an extension location across State lines, the affected State Survey Agencies must have a signed reciprocal agreement allowing approval of the extension location.

    2300 – Outpatient Physical Therapy and/or Speech-Language Pathology Services at Other Locations such as a Patient’s Private Residence, Assisted Living or Independent Living Facility

    In addition to the primary site and any extension locations, the organization may provide therapy services in the patient’s private residence or in a patient’s room in a SNF/NF, in an assisted living facility, or in an independent living facility. These are services that are provided on an intermittent basis where there is no ongoing or permanent presence of the OPT. Examples of an ongoing or permanent presence may be indicated by a dedicated therapy gym; storing of equipment, supplies, or medical records at the facility; or having OPT staff regularly assigned to work at that facility directing a coordinated and ongoing rehabilitation program at the facility. These situations are examples that would require the OPT to have the other location become separately certified or become approved as an extension location.

    The agency must provide an adequate therapy program whenever and wherever it provides services at locations away from the primary site. The agency must have adequate equipment and modalities available, at any location, to treat the patients accepted for service. If the agency is providing services at more than one location each day, the agency must have infection control policies in place that set forth the techniques the agency employees will use at all locations.

    The agency is responsible for providing any modality that is designated on the plan of care or requested by the physician. It is not acceptable for agencies to ask patients to sign waivers for modalities that are not available. The agency should refer the patient to another agency if needed services are not available at the agency practice location. The surveyor should see evidence of the referral in the patient’s clinical record.

    The current plan of care and progress notes must be accessible to service providers anytime that the patient is receiving care in order to promote continuity of care.

    Periodically, an organization may wish to use a community facility to provide certain therapeutic services. For example, the organization may want to use a community pool to provide aquatic therapy. The SA or AO shall verify that the community pool meets all applicable State laws (i.e., health and safety, infection control requirements, etc.) governing the use of the community facility. Also the SA or AO shall review the organization’s policies and procedures regarding the type of therapy being provided, training for staff, supervision, etc. The pool must be closed to public use during the time the organization is providing therapy to protect the privacy and safety of the patients being treated. The hours of operation and days of the week during which the facility will be used for therapy services, supervision, etc. must be clearly stated in the organization’s policies and procedures as well as the contractual agreement between the community pool and the organization. Verify that the organization has a carefully detailed policy regarding specific arrangements for emergency services in the event of a medical emergency at the community location (i.e., is a telephone in close proximity to the qualified professional providing the service, is there a second organization staff person on site, etc.

    Reference
    Medicare Transmittal # R150SOMA

    October 30, 2015


  • Applying Therapy Caps to Maryland Hospitals and Manual Information for Therapy Caps in all Outpatient Settings

    6 Aug 2015 12:35 PM | Zachary Edgar (Administrator)

    August 6, 2015

    This Change Request (CR) revises Original Medicare systems to ensure therapy services provided in Maryland hospitals are subject to the outpatient therapy per-beneficiary caps.

    Part B Outpatient Rehabilitation and Comprehensive Outpatient Rehabilitation Facility (CORF) Services – General

    (Rev. 3309, Issued: 08-06-2015, Effective: 01-01-2016, Implementation:01-04-2016)

    Language in this section is defined or described in Pub. 100-02, chapter 15, sections 220 and 230.

    Section §1834(k)(5) to the Social Security Act (the Act), requires that all claims for outpatient rehabilitation services and comprehensive outpatient rehabilitation facility (CORF) services, be reported using a uniform coding system. The CMS chose HCPCS (Healthcare Common Procedure Coding System) as the coding system to be used for the reporting of these services. This coding requirement is effective for all claims for outpatient rehabilitation services and CORF services submitted on or after April 1, 1998.

    The Act also requires payment under a prospective payment system for outpatient rehabilitation services including CORF services. Effective for claims with dates of service on or after January 1, 1999, the Medicare Physician Fee Schedule (MPFS) became the method of payment for outpatient therapy services furnished by:

    • •        Comprehensive outpatient rehabilitation facilities (CORFs);
    • •        Outpatient physical therapy providers (OPTs), also known as rehabilitation agencies;
    • •        Hospitals (to outpatients and inpatients who are not in a covered Part A stay);
    • •        Skilled nursing facilities (SNFs) (to residents not in a covered Part A stay and to nonresidents who receive outpatient rehabilitation services from the SNF); and
    • •        Home health agencies (HHAs) (to individuals who are not homebound or otherwise are not receiving services under a home health plan of care (POC)).

    NOTE: No provider or supplier other than the SNF will be paid for therapy services during the time the beneficiary is in a covered SNF Part A stay. For information regarding SNF consolidated billing see chapter 6, section 10 of this manual.

    Similarly, under the HH prospective payment system, HHAs are responsible to provide, either directly or under arrangements, all outpatient rehabilitation therapy services to beneficiaries receiving services under a home health POC. No other provider or supplier will be paid for these services during the time the beneficiary is in a covered Part A stay. For information regarding HH consolidated billing see chapter10, section 20 of this manual.

    Section 143 of the Medicare Improvements for Patients and Provider’s Act of 2008 (MIPPA) authorizes the Centers for Medicare & Medicaid Services (CMS) to enroll speech-language pathologists (SLP) as suppliers of Medicare services and for SLPs to begin billing Medicare for outpatient speech-language pathology services furnished in private practice beginning July 1, 2009. Enrollment will allow SLPs in private practice to bill Medicare and receive direct payment for their services. Previously, the Medicare program could only pay SLP services if an institution, physician or nonphysician practitioner billed them.

    In Chapter 23, as part of the CY 2009 Medicare Physician Fee Schedule Database, the descriptor for PC/TC indicator “7”, as applied to certain HCPCS/CPT codes, is described as specific to the services of privately practicing therapists. Payment may not be made if the service is provided to either a hospital outpatient or a hospital inpatient by a physical therapist, occupational therapist, or speech-language pathologist in private practice.

    The MPFS is used as a method of payment for outpatient rehabilitation services furnished under arrangement with any of these providers.

    The Medicare allowed charge for the services is the lower of the actual charge or the MPFS amount. The Medicare payment for the services is 80 percent of the allowed charge after the Part B deductible is met. Coinsurance is made at 20 percent of the lower of the actual charge or the MPFS amount. The general coinsurance rule (20 percent of the actual charges) does not apply when making payment under the MPFS. This is a final payment.

    The MPFS does not apply to outpatient rehabilitation services furnished by critical access hospitals (CAHs) or hospitals in Maryland. CAHs are to be paid on a reasonable cost basis. Maryland hospitals are paid under the Maryland All-Payer Model.

    Contractors process outpatient rehabilitation claims from hospitals, including CAHs, SNFs, HHAs, CORFs, outpatient rehabilitation agencies, and outpatient physical therapy providers for which they have received a tie in notice from the Regional Office (RO). These provider types submit their claims to the contractors using the ASC X12 837 institutional claim format or the CMS-1450 paper form when permissible. Contractors also process claims from physicians, certain nonphysician practitioners (NPPs), therapists in private practices (TPPs), (which are limited to physical and occupational therapists, and speech-language pathologists in private practices), and physician-directed clinics that bill for services furnished incident to a physician’s service (see Pub. 100-02, Medicare Benefit Policy Manual, chapter 15, for a definition of “incident to”). These provider types submit their claims to the contractor using the ASC X 12 837 professional claim format or the CMS-1500 paper form when permissible.

    There are different fee rates for nonfacility and facility services. Chapter 23 describes the differences in these two rates. (See fields 28 and 29 of the record therein described). Facility rates apply to professional services performed in a facility other than the professional’s office. Nonfacility rates apply when the service is performed in the professional’s office. The nonfacility rate (that is paid when the provider performs the services in its own facility) accommodates overhead and indirect expenses the provider incurs by operating its own facility. Thus it is somewhat higher than the facility rate.

    Contractors pay the non facility rate on institutional claims for services performed in the provider’s facility. Contractors may pay professional claims using the facility or nonfacility rate depending upon where the service is performed (place of service on the claim), and the provider specialty.

    Contractors pay the codes in §20 under the MPFS on professional claims regardless of whether they may be considered rehabilitation services. However, contractors must use this list for institutional claims to determine whether to pay under outpatient rehabilitation rules or whether payment rules for other types of service may apply, e.g., OPPS for hospitals, reasonable costs for CAHs.

    Note that because a service is considered an outpatient rehabilitation service does not automatically imply payment for that service. Additional criteria, including coverage, plan of care and physician certification must also be met. These criteria are described in Pub. 100-02, Medicare Benefit Policy Manual, chapters 1 and 15.

    Payment for rehabilitation services provided to Part A inpatients of hospitals or SNFs is included in the respective PPS rate. Also, for SNFs (but not hospitals), if the beneficiary has Part B, but not Part A coverage (e.g., Part A benefits are exhausted), the SNF must bill for any rehabilitation service.

    Payment for rehabilitation therapy services provided by home health agencies under a home health plan of care is included in the home health PPS rate. HHAs may submit bill type 34X and be paid under the MPFS if there are no home health services billed under a home health plan of care at the same time, and there is a valid rehabilitation POC (e.g., the patient is not homebound).

    An institutional employer (other than a SNF) of the TPPs, or physician performing outpatient services, (e.g., hospital, CORF, etc.), or a clinic billing on behalf of the physician or therapist may bill the contractor on a professional claim.

    The MPFS is the basis of payment for outpatient rehabilitation services furnished by TPPs, physicians, and certain nonphysician practitioners or for diagnostic tests provided incident to the services of such physicians or nonphysician practitioners. (See Pub. 100-02, Medicare Benefit Policy Manual, Chapter 15, for a definition of “incident to, therapist, therapy and related instructions.") Such services are billed to the contractor on the professional claim format. Assignment is mandatory.

    The following table identifies the provider and supplier types, and identifies which claim format they may use to submit claims for outpatient therapy services to the contractor.

    “Provider/Supplier Service” Type

    Format

    Bill Type

    Comment

    Inpatient SNF Part A

    Institutional

    21X

    Included in PPS

    Inpatient hospital Part B

    Institutional

    12X

    Hospital may obtain services under arrangements and bill, or rendering provider may bill

    Inpatient SNF Part B (audiology tests are not included)

    Institutional

    22X

    SNF must provide and bill, or obtain under arrangements and bill

    Outpatient hospital

    Institutional

    13X

    Hospital may provide and bill or obtain under arrangements and bill

    Outpatient SNF

    Institutional

    23X

    SNF must provide and bill or obtain under arrangements and bill

    HHA billing for services not rendered under a Part A or Part B home health plan of care, but rendered under a therapy plan of care

    Institutional

    34X

    Service not under home health plan of care

    Outpatient physical therapy providers (OPTs), also known as rehabilitation agencies

    Institutional

    74X

    Paid MPFS for outpatient rehabilitation services

    Comprehensive Outpatient Rehabilitation Facility (CORF)

    Institutional

    75X

    Paid MPFS for outpatient rehabilitation services and all other services except drugs. Drugs are paid 95% of the AWP

    Physician, NPPs, TPPs, (therapy services in hospital or SNF)

    Professional

    Payment may not be made for therapy services to Part A inpatients of hospitals or SNFs, or for Part B SNF residents

    NOTE: Payment may be made to physicians and NPPs for their professional services defined as “sometimes therapy” (not part of a therapy plan) in certain situations; for example, when furnished to a beneficiary registered as an outpatient of a hospital

    Physician/NPP/TPPs office, or patient’s home

    Professional

    Paid via MPFS

    Critical Access Hospital - inpatient Part B

    Institutional

    12X

    Rehabilitation services are paid at cost

    Critical Access Hospital – outpatient Part B

    Institutional

    85X

    Rehabilitation services are paid at cost

    10.3 - Application of Financial Limitations

    Financial limitations on outpatient therapy services, as described above, began for therapy services rendered on or after on January 1, 2006. References and polices relevant to the exceptions process in this chapter apply only when exceptions to therapy caps are in effect. For dates of service before October 1, 2012, limits apply to outpatient Part B therapy services furnished in all settings except outpatient hospitals, including hospital emergency departments. These excluded hospital services are reported on types of bill 12x or 13x, or 85x. Effective for dates of service on or after October 1, 2012, the limits also apply to outpatient Part B therapy services furnished in outpatient hospitals other than CAHs and hospitals in Maryland. During this period, only type of bill 12x claims with a CMS certification number in the CAH range, type of bill 12x and 13x claims with a CMS certification number beginning with the State code for Maryland, and type of bill 85x claims are excluded. Effective for dates of service on or after January 1, 2014, the limits also apply to CAHs. Effective for dates of service on or after January 1, 2016, the limits also apply to hospitals in Maryland.

    Contractors apply the financial limitations to the MPFS amount (or the amount charged if it is smaller) for therapy services for each beneficiary.

    As with any Medicare payment, beneficiaries pay the coinsurance (20 percent) and any deductible that may apply. Medicare will pay the remaining 80 percent of the limit after the deductible is met. These amounts will change each calendar year.

    Medicare shall apply these financial limitations in order, according to the dates when the claims were received. When limitations apply, the Common Working File (CWF) tracks the limits. Shared system maintainers are not responsible for tracking the dollar amounts of incurred expenses of rehabilitation services for each therapy limit.

    In processing claims where Medicare is the secondary payer, the shared system takes the lowest secondary payment amount from MSPPAY and sends this amount on to CWF as the amount applied to therapy limits.

    10.3 1 - Exceptions to Therapy Caps – General

    The following policies concerning exceptions to caps due to medical necessity apply only when the exceptions process is in effect. Except for the requirement to use the KX modifier, the guidance in this section concerning medical necessity applies as well to services provided before caps are reached.

    Provider and supplier information concerning exceptions is in this chapter and in Pub. 100-02, Chapter 15, section 220.3. Exceptions shall be identified by a modifier on the claim and supported by documentation.

    The beneficiary may qualify for use of the cap exceptions process at any time during the episode when documented medically necessary services exceed caps. All covered and medically necessary services qualify for exceptions to caps. All requests for exception are in the form of a KX modifier added to claim lines. (See subsection D. for use of the KX modifier.)

    Use of the exception process does not exempt services from manual or other medical review processes as described in Pub. 100-08. Rather, atypical use of the exception process may invite contractor scrutiny, for example, when the KX modifier is applied to all services on claims that are below the therapy caps or when the KX modifier is used for all beneficiaries of a therapy provider. To substantiate the medical necessity of the therapy services, document in the medical record (see Pub. 100-02, Chapter 15, sections 220.2, 220.3, and 230).

    The KX modifier, described in subsection D., is added to claim lines to indicate that the clinician attests that services at and above the therapy caps are medically necessary and justification is documented in the medical record.

    10.3.2 - Exceptions Process

    (Rev. 3309, Issued: 08-06-2015, Effective: 01-01-2016, Implementation:01-04-2016)

    An exception may be made when the patient’s condition is justified by documentation indicating that the beneficiary requires continued skilled therapy, i.e., therapy beyond the amount payable under the therapy cap, to achieve their prior functional status or maximum expected functional status within a reasonable amount of time.

    No special documentation is submitted to the contractor for exceptions. The clinician is responsible for consulting guidance in the Medicare manuals and in the professional literature to determine if the beneficiary may qualify for the exception because documentation justifies medically necessary services above the caps. The clinician’s opinion is not binding on the Medicare contractor who makes the final determination concerning whether the claim is payable.

    Documentation justifying the services shall be submitted in response to any Additional Documentation Request (ADR) for claims that are selected for medical review. Follow the documentation requirements in Pub. 100-02, chapter 15, section 220.3. If medical records are requested for review, clinicians may include, at their discretion, a summary that specifically addresses the justification for therapy cap exception.

    In making a decision about whether to utilize the exception, clinicians shall consider, for example, whether services are appropriate to—

    • •        The patient’s condition, including the diagnosis, complexities, and severity;
    • •        The services provided, including their type, frequency, and duration;
    • •        The interaction of current active conditions and complexities that directly and significantly influence the treatment such that it causes services to exceed caps.

    In addition, the following should be considered before using the exception process:

    1. Exceptions for Evaluation Services

    Evaluation. The CMS will except therapy evaluations from caps after the therapy caps are reached when evaluation is necessary, e.g., to determine if the current status of the beneficiary requires therapy services. For example, the following CPT codes for evaluation procedures may be appropriate: 92521, 92522, 92523, 92524, 92597, 92607, 92608, 92610, 92611, 92612, 92614, 92616, 96105, 96125, 97001, 97002, 97003, 97004.

    Other Services. There are a number of sources that suggest the amount of certain services that may be typical, either per service, per episode, per condition, or per discipline. For example, see the CSC - Therapy Cap Report, 3/21/2008, and CSC – Therapy Edits Tables 4/14/2008 at www.cms.hhs.gov/TherapyServices (Studies and Reports), or more recent utilization reports. Professional literature and guidelines from professional associations also provide a basis on which to estimate whether the type, frequency, and intensity of services are appropriate to an individual. Clinicians and contractors should utilize available evidence related to the patient’s condition to justify provision of medically necessary services to individual beneficiaries, especially when they exceed caps. Contractors shall not limit medically necessary services that are justified by scientific research applicable to the beneficiary. Neither contractors nor clinicians shall utilize professional literature and scientific reports to justify payment for continued services after an individual’s goals have been met earlier than is typical. Conversely, professional literature and scientific reports shall not be used as justification to deny payment to patients whose needs are greater than is typical or when the patient’s condition is not represented by the literature.

    2. Exceptions for Medically Necessary Services

    Clinicians may utilize the process for exception for any diagnosis or condition for which they can justify services exceeding the cap. Regardless of the diagnosis or condition, the patient must also meet other requirements for coverage.

    Bill the most relevant diagnosis. As always, when billing for therapy services, the diagnosis code that best relates to the reason for the treatment shall be on the claim, unless there is a compelling reason to report another diagnosis code. For example, when a patient with diabetes is being treated with therapy for gait training due to amputation, the preferred diagnosis is abnormality of gait (which characterizes the treatment). Where it is possible in accordance with State and local laws and the contractors’ local coverage determinations, avoid using vague or general diagnoses. When a claim includes several types of services, or where the physician/NPP must supply the diagnosis, it may not be possible to use the most relevant therapy diagnosis code in the primary position. In that case, the relevant diagnosis code should, if possible, be on the claim in another position.

    Codes representing the medical condition that caused the treatment are used when there is no code representing the treatment. Complicating conditions are preferably used in non-primary positions on the claim and are billed in the primary position only in the rare circumstance that there is no more relevant code.

    The condition or complexity that caused treatment to exceed caps must be related to the therapy goals and must either be the condition that is being treated or a complexity that directly and significantly impacts the rate of recovery of the condition being treated such that it is appropriate to exceed the caps. Documentation for an exception should indicate how the complexity (or combination of complexities) directly and significantly affects treatment for a therapy condition.

    If the contractor has determined that certain codes do not characterize patients who require medically necessary services, providers/suppliers may not use those codes, but must utilize a billable diagnosis code allowed by their contractor to describe the patient’s condition. Contractors shall not apply therapy caps to services based on the patient’s condition, but only on the medical necessity of the service for the condition. If a service would be payable before the cap is reached and is still medically necessary after the cap is reached, that service is excepted.

    Contact your contractor for interpretation if you are not sure that a service is applicable for exception.

    It is very important to recognize that most conditions would not ordinarily result in services exceeding the cap. Use the KX modifier only in cases where the condition of the individual patient is such that services are APPROPRIATELY provided in an episode that exceeds the cap. Routine use of the KX modifier for all patients with these conditions will likely show up on data analysis as aberrant and invite inquiry. Be sure that documentation is sufficiently detailed to support the use of the modifier.

    In justifying exceptions for therapy caps, clinicians and contractors should not only consider the medical diagnoses and medical complications that might directly and significantly influence the amount of treatment required. Other variables (such as the availability of a caregiver at home) that affect appropriate treatment shall also be considered. Factors that influence the need for treatment should be supportable by published research, clinical guidelines from professional sources, and/or clinical or common sense. See Pub. 100-02, chapter 15, section 220.3 for information related to documentation of the evaluation, and section 220.2 on medical necessity for some factors that complicate treatment.

    NOTE: The patient’s lack of access to outpatient hospital therapy services alone, when outpatient hospital therapy services are excluded from the limitation, does not justify excepted services. Residents of skilled nursing facilities prevented by consolidated billing from accessing hospital services, debilitated patients for whom transportation to the hospital is a physical hardship, or lack of therapy services at hospitals in the beneficiary’s county may or may not qualify as justification for continued services above the caps. The patient’s condition and complexities might justify extended services, but their location does not. For dates of service on or after October 1, 2012, therapy services furnished in an outpatient hospital are not excluded from the limitation.

    10.3.3 - Use of the KX Modifier for Therapy Cap Exceptions

    (Rev. 3309, Issued: 08-06-2015, Effective: 01-01-2016, Implementation:01-04-2016)

    When exceptions are in effect and the beneficiary qualifies for a therapy cap exception, the provider shall add a KX modifier to the therapy HCPCS code subject to the cap limits. The KX modifier shall not be added to any line of service that is not a medically necessary service; this applies to services that, according to a local coverage determination by the contractor, are not medically necessary services.

    The GN, GO, or GP therapy modifiers are currently required to be appended to therapy services. In addition to the KX modifier, the GN, GP and GO modifiers shall continue to be used. Providers may report the modifiers on claims in any order. If there is insufficient room on a claim line for multiple modifiers, additional modifiers may be reported in the remarks field. Follow the routine procedure for placing HCPCS modifiers on a claim as described below.

    For professional claims, sent to the A/B MAC(B), refer to:

    o Pub.100-04, Medicare Claims Processing Manual, chapter 26, for more detail regarding completing Form CMS 1500, including the placement of HCPCS modifiers. NOTE: The Form CMS 1500 currently has space for providing four modifiers in block 24D, but, if the provider has more than four to report, he/she can do so by placing the -99 modifier (which indicates multiple modifiers) in block 24D and placing the additional modifiers in block 19.

     o The ASC X12N 837 Health Care Claim: Professional Implementation Guide for more detail regarding how to electronically submit a health care claim transaction, including the placement of HCPCS modifiers. The ASC X12N 837 implementation guides are the standards adopted under the Health Insurance Portability and Accountability Act of 1996 (HIPAA) for submitting health care claims electronically. The 837 professional transaction currently permits the placement of up to four modifiers, in the 2400 loop, SV1 segment, and data elements SV101-3, SV101-4, SV101-5, and SV101-6. Copies of the ASC X12N 837 implementation guides may be obtained from the Washington Publishing Company.

    o For claims paid by a carrier or an A/B MAC(B), it is only appropriate to append the KX modifier to a service that reasonably may exceed the cap. Use of the KX modifier when there is no indication that the cap is likely to be exceeded is abusive. For example, use of the KX modifier for low cost services early in an episode when there is no evidence of a previous episode that might have exceeded the cap is inappropriate.

    For institutional claims, sent to the A/B MAC(A):

    o When the cap is exceeded by at least one line on the claim, use the KX modifier on all of the lines on that institutional claim that refer to the same therapy cap (PT/SLP or OT), regardless of whether the other services exceed the cap. For example, if one PT service line exceeds the cap, use the KX modifier on all the PT and SLP service lines (also identified with the GP or GN modifier) for that claim. When the PT/SLP cap is exceeded by PT services, the SLP lines on the claim may meet the requirements for an exception due to the complexity of two episodes of service.

    o Use the KX modifier on either all or none of the SLP lines on the claim, as appropriate. In contrast, if all the OT lines on the claim are below the cap, do not use the KX modifier on any of the OT lines, even when the KX modifier is appropriately used on all of the PT lines. Refer to Pub.100-04, Medicare Claims Processing Manual, chapter 25, for more detail.

    By appending the KX modifier, the provider is attesting that the services billed:

    • •        Are reasonable and necessary services that require the skills of a therapist; (See Pub. 100-02, chapter 15, section 220.2); and
    • •        Are justified by appropriate documentation in the medical record, (See Pub. 100-02, chapter 15, section 220.3); and
    • •        Qualify for an exception using the automatic process exception.

    If this attestation is determined to be inaccurate, the provider/supplier is subject to sanctions resulting from providing inaccurate information on a claim.

    When the KX modifier is appended to a therapy HCPCS code, the contractor will override the CWF system reject for services that exceed the caps and pay the claim if it is otherwise payable.

    Providers and suppliers shall continue to append correct coding initiative (CCI) HCPCS modifiers under current instructions.

    If a claim is submitted without KX modifiers and the cap is exceeded, those services will be denied. In cases where appending the KX modifier would have been appropriate, contractors may reopen and/or adjust the claim, if it is brought to their attention.

    Services billed after the cap has been exceeded which are not eligible for exceptions may be billed for the purpose of obtaining a denial using condition code 21.

    10.3.4 - Therapy Cap Manual Review Threshold

    (Rev. 3309, Issued: 08-06-2015, Effective: 01-01-2016, Implementation:01-04-2016)

    Beginning calendar year 2012, there shall be two total therapy service thresholds of $3700 per year: one annual threshold each for

    (1) Occupational therapy services.

    (2) Physical therapy services and speech-language pathology services combined.

    Services shall accrue annually toward the thresholds beginning with claims with dates of service on and after January 1, 2012. The thresholds shall apply to both services showing the KX modifier and those without the modifier. Contractors shall apply the thresholds to claims exceeding it by suspending the claim for manual review. Instructions regarding the manual review process may be found in Pub. 100-08, Medicare Program Integrity Manual.

    10.3.5 - Identifying the Certifying Physician

    (Rev. 3309, Issued: 08-06-2015, Effective: 01-01-2016, Implementation:01-04-2016)

    Therapy plans of care must be certified by a physician or non-physician practitioner (NPP), per the requirements in the Pub. 100-02,Medicare Benefit Policy Manual, chapter 15, section 220.1.3. Further, the National Provider Identifier (NPI) of the certifying physician/NPP identified for a therapy plan of care must be included on the therapy claim.

    For the purposes of processing professional claims, the certifying physician/NPP is considered a referring provider. At the time the certifying physician/NPP is identified for a therapy plan of care, private practice therapists (PPTs), physicians or NPPs, as appropriate, submitting therapy claims, are to treat it as if a referral has occurred for purposes of completing the claim and to follow the instructions in the appropriate ASC X12 837 Professional Health Care Claim Technical Report 3 (TR3) for reporting a referring provider (for paper claims, they are to follow the instructions for identifying referring providers per Chapter 26 of this manual) . These instructions include requirements for reporting NPIs.

    Currently, in the 5010 version of the ASC X12 837 Professional Health Care Claim TR3, referring providers are first reported at the claim level; additional referring providers are reported at the line level only when they are different from that identified at the claim level. Therefore, there will be at least one referring provider identified at the claim level on the ASC X12 837 Professional claim for therapy services. However, because of the hierarchical nature of the ASC X12 837 health care claim transaction, and the possibility of other types of referrals applying to the claim, the number of referring providers identified on a professional claim may vary. For example, on a claim where one physician/NPP has certified all the therapy plans of care, and there are no other referrals, there would be only one referring provider identified at the claim level and none at the line levels. Conversely, on a claim also containing a non-therapy referral made by a different physician/NPP than the one certifying the therapy plan of care, the billing provider may elect to identify either the nontherapy or the therapy referral at the claim level, with the other referral(s) at the line levels. Similarly, on a claim having different certifying physician/NPPs for different therapy plans of care, only one of these physician/NPPs will be identified at the claim level, with the remainder identified at the line levels. These scenarios are only examples: there may be other patterns of representing referring providers at the claim and line levels depending upon the circumstances of the care and the manner in which the provider applies the requirements of the ASC X12 837 Professional Health Care Claim TR3.

    For situations where the physician/NPP is both the certifier of the plan of care and furnishes the therapy service, he/she supplies his/her own information, including the NPI, in the appropriate referring provider loop (or, appropriate block on Form CMS 1500). This is applicable to those therapy services that are personally furnished by the physician/NPP as well as to those services that are furnished incident to their own and delivered by “qualified personnel” (see section 230.5 of this manual for qualifications for incident to personnel).

    Contractors shall edit to ensure that there is at least one claim-level referring provider identified on professional therapy claims, and shall use the presence of the therapy modifiers (GN, GP, GO) to identify those claims subject to this requirement.

    For the purposes of processing institutional claims, the certifying physician/NPP and their NPI are reported in the Attending Provider fields on institutional claim formats. Since the physician/NPP is certifying the therapy plan of care for the services on the claim, this is consistent with the National Uniform Billing Committee definition of the Attending Provider as “the individual who has overall responsibility for the patient’s medical care and treatment” that is reported on the claim. In cases where a patient is receiving care under more than one therapy plan of care (OT, PT, or SLP) with different certifying physicians/NPPs, the second certifying physicians/NPP and their NPI are reported in the Referring Physician fields on institutional claim formats.

    10.3.6 - MSN Messages Regarding the Therapy Cap

    (Rev. 3309, Issued: 08-06-2015, Effective: 01-01-2016, Implementation:01-04-2016)

    Existing MSN messages 17.13, 17.18 and 17.19 shall be issued on all claims containing outpatient rehabilitation services. Contractors add the applied amount for individual beneficiaries and the generic limit amount to all MSNs that require them. For details of these MSNs, see: http://www.cms.gov/MSN/02_MSN%20Messages.asp

    40.1 - Determining Payment Amounts – Institutional Claims

    (Rev. 3309, Issued: 08-06-2015, Effective: 01-01-2016, Implementation:01-04-2016)

    Institutional outpatient rehabilitation claims are paid under the Medicare Physician Fee Schedule (MPFS), except for claims from CAHs and hospitals in Maryland. Medicare contractors should see §100.2 for details on obtaining the correct fee amounts.

    Reference

    Medicare Transmittal # R3309CP

    August 6, 2015


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