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CMSToday’s blog post comes from WebPT Senior Copywriters Erica Cohen and Charlotte Bohnett.

We do this every year: waiting and wondering what Medicare is going to do. As the news trickles in—and details are still coming—it all seems as expected so far. So what are the big takeaways? Here is WebPT Co-Founder and COO Heidi Jannenga’s take on what these CMS changes mean for you and your clinic.

First of all, CMS increased the therapy cap by $20 to $1,900 (from $1,880 in 2012) for physical therapy and speech therapy combined and $1,900 for occupational therapy. While this may not seem huge, it’s better than the cuts they once considered imposing. With this ruling, the automatic exemption process will also no longer be in effect after December 31, 2012. That means you will need to appeal based on medical necessity for continued treatment over the cap amount; it won’t be as simple as adding the KX modifier to your billing and supporting it with documentation anymore. Additionally, CMS’s ruling includes a 26.5% reduction to medicare payment rates for physicians, physical therapists, and other professionals. However, if Congress acts by the end of the year (as I think they will), we won’t experience this cut, and they will most likely outline some sort of exception process. Ultimately, we’ll know the outcome for both of these issues as soon as congress comes back into session at the beginning of the new year.

Second of all—and bigger news—effective July 1, 2013, therapists will be required to report new G codes, moving us closer to incorporating function and functional progress within our treatment. You should already be checking (and documenting) functional progress through your short- and long-term goal updates at the 10-visit mark and at discharge, so now it’s really just about linking a G code with that progress. We’ll learn more specifics about the codes and their use in the next few weeks.

For more information, please visit the APTA’s website. Here, you’ll find a detailed summary of the final fee schedule rule starting the week of November 16th, following its formal publication in the Federal Register. We’ll also include a blog post summarizing any new information that becomes available during that week.

That’s Heidi’s take. Now what does the APTA say?

CMS provides a policy and payment update that sets the therapy cap amount on outpatient therapy services and updates payment amounts for Medicare providers. According to PT in Motion News Now, on November 1, CMS released the final 2013 Medicare physician fee schedule rule, which sets the 2013 therapy cap at $1,900 (but notes that the therapy cap exception process expires on December 31, 2012, unless Congress extends it.) This rule also “includes a 26.5% reduction to Medicare payment rates for physicians, physical therapists, and other professionals due to the flawed sustainable growth rate formula.” However, if Congress acts by the end of the year (as it has since 2003), the projected cut will be averted and the “aggregate impact on payment for outpatient physical therapy would be a positive 4% in 2013.”

Additionally, CMS has implemented new functional status codes for physical therapists to report services and updates to the Physician Quality Reporting System (PQRS). As required by the Middle Class Tax Relief Jobs Creation Act of 2012, CMS will collect claim form data about patient functional status for patients receiving outpatient therapy beginning January 1, 2013. This means that “therapists will be required to report new G codes accompanied by modifiers on the claim form that convey information about a patient’s functional limitations and goals at initial evaluation, every ten visits, and at discharge. Beginning July 1, 2013, all claims must include the functional limitation codes in order to be paid by Medicare.”

For 2013, the PQRS reporting period will be based on a 12-month reporting time frame, and the bonus payment amount will be .5%. The 2013 calendar year “will also be used as the reporting period for the 2015 PQRS payment adjustment of -1.5%.” In order to successfully complete the reporting requirements (just as in 2012), you must report “a minimum of three individual measures or one group measure via claims-based reporting on 50% or more of all eligible Medicare patients, or report a minimum of three individual measures or one group measure via [registry-based] reporting on 80% or more of all eligible Medicare patients.”

What do you think of the Medicare rulings? Do you think Congress will act by the end of the year?

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