This blog post comes from WebPT copywriters Charlotte Bohnett and Erica Cohen.
Medicare compliance is one very tough nut to crack as is navigating the murky waters of medical insurance billing. We’ve filled this month’s blogs with all sorts of valuable and applicable information on everything from HIPAA to autonomy. But what Medicare obstacles do you grapple with daily? Today, let’s talk the five most frequently asked questions regarding Medicare.
1.) What is the Therapy Cap?
According to the APTA’s FAQs on the Therapy Cap and KX Modifier, 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.
In 2012, that annual per beneficiary therapy cap is $1,880 for physical therapy and speech language pathology services combined, and there is a separate $1,880 amount allotted for occupational therapy services.
Note: While the Medicare Advantage plan may apply a $1,880 therapy cap with an exceptions process, many Medicare Advantage plans have chosen not to apply a therapy cap in the past. Please check with your Medicare Advantage plan regarding its payment policies.
Read WebPT cofounder, COO, and PT Heidi Jannenga’s take on the therapy cap in her blog post, “Save the Day the CMS Way.”
2.) What is the KX Modifier?
When your patient qualifies for a therapy cap exception, simply add the KX modifier to the therapy procedure code that is subject to the cap limits. You can find eligible therapy procedure codes within Chapter 5, Section 20(B), “Applicable Outpatient Rehabilitation Healthcare Common Procedure Coding System (HCPCS) Codes” of the Claims Processing Manual.
By attaching the KX modifier, you are attesting that the services billed:
- Qualify for the cap exception;
- Are reasonable and necessary services that require the skills of a therapist;
- And are justified by appropriate documentation within the medical record.
You are not required to provide any special documentation in your automatic process exception request as long as your patient does, in fact, meet the necessary conditions. However, if Medicare has any additional questions regarding your patient’s qualifications, you may receive an Additional Documentation Request (ADR) to which you are obligated to respond with documentation justifying the services you performed.
3.) What is the fee schedule?
According to the CMS website, a fee schedule is a “complete listing of fees used by Medicare to pay doctors or other providers/suppliers. This comprehensive listing of fee maximums is used to reimburse a physician and/or other providers on a fee-for-service basis. CMS develops fee schedules for physicians, ambulance services, clinical laboratory services, and durable medical equipment, prosthetics, orthotics, and supplies.”
Congress’s last minute budget decision in November put the proposed 27.4% payment cut to the Medicare fee schedule on hold, but everything’s back on the table this fall. Here’s how the APTA suggests you handle establishing your fee schedule:
“It is important to establish fee schedule charges that are representative of your costs and would be applicable to all your patients regardless of payer. It is appropriate to establish charges that are above the Medicare fee schedule amount. Be aware that Medicare pays the lower of submitted charges and the Medicare fee schedule amount. Therefore, we advise that you do not lower your rates based on the 27.4% cut.”
Lastly, here’s the APTA’s Medicare fee calculator.
4.) If my clinic doesn’t accept Medicare, can I treat Medicare patients?
According to PT Ann Wendel (@PranaPT), “What I learned through research is that if you don’t accept Medicare, you can’t treat Medicare patients. It’s illegal to accept cash payments from Medicare patients for physical therapy (see Section 40 of the Medicare Benefit Policy Manual from CMS). Medicare patients can only pay out of pocket when they see a PT for ‘wellness’ (i.e., general conditioning and not treatment). This is a little known fact that is devastating for a small practice. These are the folks that typically need care beyond what Medicare can pay, and they are not able to come see you. If you didn’t know about this and you got audited by Medicare, you’d be in trouble. The way the code is written, the only practitioners who cannot opt-out of Medicare are PTs and Chiropractors.”
5.) Where do I go for additional information on compliance?
While the information they provide is quite dense, there’s no better Medicare compliance resource than CMS itself. (Check out the Claims Processing Manual, Publication 100-04, Chapter 5, Section 10.2, “Financial Limitation for Outpatient Rehabilitation Services.”) APTA is also a robust source.
Have more questions? Send ‘em our way in the comments section below and we’ll do our best to help you find the answers. We know there are tons of head-scratchin’, brow-furrowin’ medical billing mysteries out there, and we love helping our rehab therapists crack the case!