In January, WebPT released the Medicare Allowable Fee Schedule in preparation for the new Medicare Therapy Cap Alerts we’ll launch this month. In short, this new feature will allow you to reproduce your Allowable Fee Schedule within WebPT as published by Medicare. This fee schedule will inform a tracking tool and subsequent alerts so you can see how much of the therapy cap your patients have accrued using your services.

As a result of this launch, we’ve gotten quite a few questions about the Medicare Therapy Cap and the changes CMS made this year. Here, we’ll share some Q&A we adapted from the APTA’s Medicare Therapy Cap FAQs:

Q. What is the therapy cap?

A. Under the Balanced Budget Act (BBA) of 1997, Congress placed an annual cap on rehabilitation services through Medicare. That means that Medicare will only reimburse you as the rehabilitation therapist up to a certain dollar amount per patient regardless of services provided. 

Q. What is the 2013 Therapy Cap Amount?

A. 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. 

Q. What provider settings does the therapy cap apply to?

A. In 2013, the therapy cap applies to services furnished in private practice, physician offices, skilled nursing facilities (Part B), rehabilitation agencies (or ORFs), comprehensive outpatient rehabilitation facilities (CORFs), and outpatient hospital departments. Unless Congress passes legislation, the therapy cap will no longer apply to outpatient hospital settings beginning January 1, 2014.

Q. Does the initial examination or reexamination apply towards the therapy cap if  I need to provide an evaluation for a new patient to determine whether that patient needs therapy beyond the cap amount?

A. If you perform an exam or a reexam on a patient who has exceeded the $1,900 cap to establish the medical necessity of continuing treatment, then it does not count toward the cap. However, if you perform treatment on the same date of service, the entire visit will apply to the cap. 

Q. Does the cap amount reset for each diagnosis?

A. No, the therapy cap is an annual per beneficiary cap.

Q. How do I find out how close my patient is to approaching the therapy cap?

A. It is important to ask patients if they have received any therapy services at any time during the year as all PT, OT, and SLP services will apply to their cap. To determine how close the patient is to reaching the cap, you can safely assume $80 to $100 per visit. Additionally, you can access this information through CMS in one of two ways:

1.You can electronically view dollar amounts accrued toward the therapy limits on the ELGA or ELGB screens within the CWF (Common Working File) or on the HIQA screen for those providers who bill through fiscal intermediaries.

2.You can contact your Medicare contractor directly and request information regarding therapy services provided to a particular beneficiary. The amount accrued toward the financial limit is based on claim received date rather than the date of service.

Q. Is there an exceptions process this year?

A. CMS instituted an extension to the automatic exception process, which means you may continue to apply the KX modifier for services you provide that exceed the $1,900 therapy cap but remain below the $3,700 manual medical review threshold. Should you exceed the $3,700 threshold, you must apply to CMS for a manual medical review at your own risk.

Q. Can I apply the KX modifier for every patient?

A. No, you should only use the KX modifier when a beneficiary reaches the cap and qualifies for an exception. By attaching the modifier, you are attesting that the services billed:

  1. Qualify for the cap exception;
  2. Are reasonable and necessary services that require the skills of a therapist; and
  3. Are justified by appropriate documentation in the medical record.

Q. Along with the KX modifier, what documentation do I need to submit to apply for an automatic exception?

A. CMS does not require that you submit additional documentation to apply for an automatic exception. However, you are expected to consult the Medicare Manuals and professional literature to ensure the patient is eligible for the exception. If your claim is selected for review, CMS will make an Additional Documentation Request (ADR) at which point you will be required to submit documentation to support your use of the therapy cap.

Q. What is a manual medical review?

A. Should you exceed the $3,700 threshold for services rendered, you must apply to CMS for a manual medical review at your own risk.

Q. Can I submit an advanced manual medical review request if I know my patient will incur more than $3,700 worth of services?

A. Yes, you may submit a request to the Medicare Administrative Contractors (MAC) when the patient is close to exceeding the $3,700 cap. Each MAC has provided information on their website regarding how to seek advanced approval.

Q. When will I find out if my advanced manual medical review request has been accepted?

A. Medicare Administrative Contractors (MAC) will have ten (10) business days to decide whether to approve services over $3,700. If a MAC doesn’t make a decision within ten (10) business days, they’ll notify you that they didn’t review your request and that the claims beyond the $3,700 threshold are approved. Advanced approval allows for an additional 20 treatment days beyond the $3,700 amount. Should you need more than 20 treatment days, you must request an additional advanced approval.  It’s important to note, however, that advanced approval doesn’t guarantee payment as CMS may still perform a retrospective review.

Q. If I receive approval for my advanced manual medical review request, do I still need to use the KX modifier?

A. You will still need to apply the KX modifier when your services exceed $3,700. When the MAC grants approval, they will provide you with a tracking number to place on your claim form.

Q. What happens if I don’t request approval in advance and my patient exceeds $3,700?

A. CMS will stop payment for claims and request to see medical records. You will also be subject to prepayment review for those claims within 60 days.

Q. What happens to the exception process in 2014?

A. Unless Congress passes legislation later this year, an exception process will not be available in 2014.

Q. How do I treat a patient who has exceeded the therapy cap and does not qualify for an exception?

A. You may provide treatment to patients who have exceeded the cap and do not qualify for an exception as long as they are willing to pay for the services out of pocket (or have a secondary insurance you can bill) and complete an Advanced Beneficiary Notice (ABN).

For more therapy cap resources, you can find a CMS fact sheet here.

9 Most Common Medicare Misconceptions for PTs, OTs, and SLPs - Regular Banner9 Most Common Medicare Misconceptions for PTs, OTs, and SLPs - Small Banner
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