Whether you’re just starting out as a Medicare provider—or you’re making the switch from inpatient to outpatient—there’s a lot to keep straight when it comes to the complicated rules, regulations, and policies that govern Original Medicare (which consists of both Part A and Part B). But if you want to receive reimbursement for your services, you’ve got to know how to navigate the murky Medicare waters.
Basic Differences Between Medicare Part A and Medicare Part B
As we explained here, Part A covers inpatient hospital and skilled nursing facility care, home health care, hospice care, inpatient rehabilitation, hospice, and, in some circumstances, outpatient rehabilitation. If you provide care in a Medicare-designated outpatient rehabilitation facility (ORF)—also known as a rehab agency—or comprehensive outpatient rehabilitation facility (CORF), then the outpatient services you perform are billed to Part A payers, but are covered under the Part B Medicare benefit. (As a note, Part A outpatient care is billed under the facility NPI, not the individual provider NPI.)
Part B covers doctor’s services; PT, OT, and SLP outpatient therapy services; and other outpatient care and supplies not covered under Part A. If you’re in private practice—and you accept Medicare beneficiaries as a physical therapist, occupational therapist, or speech therapist in private practice—then you provide services that fall under Medicare Part B. However, if in doubt, always refer to your Medicare contract. (As a note, Part B is billed under the practice and therapist NPIs.)
If you’re an outpatient rehab therapist, it’s especially “important to note that Medicare does not cover Medicare Part B services for patients who are receiving Part A services. Thus, be sure to ask all patients about concurrent care.” And make it a point to check in regularly to ensure you’re not providing overlapping services. After all, you won’t be paid for the Part B services you provide to patients who are actively receiving Part A services.
Part A Rehab Therapy Billing
Again, as noted above, Medicare Part A—a.k.a hospital insurance—helps cover inpatient medical care. Most individuals receive Medicare Part A coverage with no premium when they turn 65—although there is a deductible ($1,364 in 2019) and coinsurance. While Part A and Part B billing guidelines do share some common ground, there are a handful of notable exceptions. Here a few:
In compliance with the Balanced Budget Act of 1997, Medicare bundles payments for most services provided in a Medicare-covered skilled nursing facility (SNF), which it then pays the SNF. That means providers in SNFs must bill Medicare—specifically, their Part A Medicare Administrative Contractor—in a consolidated bill, because the SNF is responsible for billing the “entire package of care that residents receive during a covered Part A SNF stay and physical, occupational, and speech therapy services received during a non-covered stay.” For more information, check out this CMS page or this one.
Patient-Driven Payment and Patient-Driven Groupings Models
According to the APTA, on October 1, 2019, CMS adopted the Patient-Driven Payment Model (PDPM) for SNFs, “a system based on a resident's classification among 5 components (including physical therapy) that are case-mix adjusted, and employing a per diem system that adjusts payment rates over the course of the stay.” According to CMS, PDPM “focuses on the patient’s condition and resulting care needs rather than on the amount of care provided in order to determine Medicare payment.”
CMS is also working to transition home health agencies to a new payment model known as the Patient-Driven Groupings Model (PDGM), which transitions “care from 60-day to 30-day episodes and eliminates therapy service-use thresholds from case-mix parameters.” According to the APTA, “the proposed rule would also allow PTAs and OTAs to perform maintenance therapy services under a maintenance program established by a qualified therapist and would end the HHA split payment approach in favor of a more efficient notice-of-admission approach.” You can read more about the proposed rule here—and APTA’s advocacy efforts here.
When two therapists of different disciplines determine that a patient will better progress toward his or her goals if they provide their respective interventions during the same session, then co-treatment may be appropriate. For co-treatment scenarios involving Part A beneficiaries, each therapist may bill the full treatment session with that patient. As always, therapists must adhere to all policies regarding mode, modalities, and supervision as well as all other federal, state, practice, and facility policies. For more information, check out this resource from the American Speech-Language-Hearing Association (ASHA), American Occupational Therapy Association (AOTA), and American Physical Therapy Association (APTA). You can also learn more about co-treatment in our Definitive Guide to Medicare.
With encouragement from the APTA, CMS is now using the same definition for group therapy in both SNF and inpatient rehabilitation settings: “two to six patients doing the same or similar activities.” According to the APTA, that means CMS is no longer using the “rigid 4-person definition.” Furthermore, CMS “believes aligning the group therapy definition serves to improve the agency’s consistency in payment policies across PAC settings, and to create opportunities for site neutral payments.”
That said, this CMS resource acknowledges that because “the SNF PDPM will not use the minutes of therapy provided to a resident to classify patients for payment purposes, it is possible that SNFs may become incentivized to emphasize group and concurrent therapy, over the kind of individualized therapy which is tailored to address each beneficiary’s specific care needs which is generally the most appropriate mode of therapy for SNF patients.” As a result, “CMS imposed a limit of 25 percent on concurrent and group therapy.”
The sections on the 8-minute rule and assessment and management time below also apply to ORF and CORF billing.
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Part B Rehab Therapy Billing
Medicare Part B—a.k.a. medical insurance—helps cover medically necessary and/or preventive outpatient services, including lab tests; surgeries; doctor visits; and physical, occupational, and speech therapy treatment. As with Part A, individuals become eligible to receive Medicare Part B insurance at age 65—or younger in cases of disability and end-stage renal failure. Unlike Part A, though, most beneficiaries pay a monthly premium (starting at $135.50 in 2019) for Part B. Then, once a patient meets his or her deductible ($185 this year), he or she will “typically pay 20% of the Medicare-approved amount for most doctor services...outpatient therapy, and durable medical equipment (DME).” So far, so good, right? Now let’s get into the tricky stuff:
8-Minute Rule (and Timed/Untimed Codes)
To receive Medicare Part B payment for a time-based—a.k.a constant attendance—code, a rehab therapist must provide direct treatment for at least eight minutes. What’s a time-based code? Unlike untimed codes (i.e., those that account for fixed-price services such as completing evaluations or reevaluations, applying hot or cold packs, and performing unattended electrical stimulation), timed codes allow for variable billing in 15-minute increments. These include the codes for one-on-one services like therapeutic exercise, manual therapy, and gait training.
According to this 8-Rinute Rule guide, “When calculating the number of billable units for a particular date of service, Medicare adds up the total minutes of skilled, one-on-one therapy and divides that total by 15. If eight or more minutes are left over, you can bill for one more unit; if seven or fewer minutes remain, you cannot bill an additional unit.” Check out the guide in full for an 8-Minute Rule reference chart, scenario-based examples, and advice on how to handle mixed remainders. (This section also applies to ORF and CORF billing.)
Assessment and Management Time
As explained here (and based on advice from John Wallace, WebPT’s Chief Business Development Officer of Revenue Cycle Management), CPT codes include “allowances for assessment and management time,” which covers “all the things you have to do to deliver an intervention,” including:
- “assessing the patient prior to performing a hands-on intervention;
- “assessing the patient’s response to the intervention;
- “instructing, counseling, and advice-giving about at-home self-care;
- “answering patient and/or caregiver questions; and
- “documenting in the presence of the patient.”
To take advantage of these allowances, Wallace implores providers to justify their decision to bill for assessment and management time within their documentation. As we explained here, “If the documentation is defensible (i.e., it's thorough, it accurately describes the treatment, it defends the prescriber’s clinical reasoning, and it’s easily understood by another provider), then payers will likely greenlight the extra minutes.” (This guidance on assessment and management time also applies to ORF and CORF billing.)
Under Part B, if two therapists of the same or different discipline(s) determine that it’s in a patient’s best interest to receive treatment from both therapists at the same time, then neither therapist can bill separately for the full session. That means the combined time the therapists bill should be equal to the total duration of the treatment session. This can be achieved in one of two ways:
- One therapist can bill for the entire session, while the other bills nothing; or
- The two therapists can split the billed units.
It’s important to note, though, that when one of the treating therapists is a speech-language pathologist (SLP), the guidelines are slightly different. According to this ASHA article, “Because SLPs usually bill treatment codes that represent a session (rather than an amount of time), and because Medicare has no published minimum/maximum session length, the SLP would bill for one untimed session.” If the SLP is working with an OT or PT, then the OT or PT would then bill “the timed treatment codes for the occupational or physical therapy.” To learn more about co-treatment, check out this resource or the co-treatment section of this guide.
Therapy Cap (and KX Modifier)
As of February 9, 2018, Medicare no longer places a cap on physical therapy, occupational therapy, or speech-language pathology services. However, therapists should continue applying the KX modifier to any claims exceeding the established therapy threshold ($2,040 in 2019) for both occupational therapy as well as physical and speech therapy (combined). Furthermore, all claims exceeding the $3,000 targeted medical review threshold are subject to a targeted review process. To learn more, refer to the last section of this post.
Group billing for outpatient rehab therapy (Part B) is substantially different than Part A group billing. The CPT code for group therapy—97150—denotes skilled treatment by the therapist that is not one-on-one. When billing for group therapy under Part B—unlike Part A—the patients in the group do not require the same or similar diagnoses and they do not need to be doing the same or similar activities. Also, there is no limit to the number of people in the group. It is important to note, though, that the group code for outpatient therapy is not for class- or curriculum-based activities. And while a therapist or therapist assistant can perform group therapy, the provider overseeing the group cannot be one-on-one with another patient at the same time. Furthermore, because the group code is untimed, you can only bill the code once for each patient in the group.
Still scratching your head over the difference between Medicare Part A and Part B? For general Medicare plan questions, drop us a note below—and we’ll do our best to find you an answer. For specific questions, review your Medicare contract or contact your local MAC.