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Top Medicare Compliance FAQs

We’re covering the common Medicare compliance questions and challenges PTs and OTs deal with regularly in billing and treatment.

Charlotte Bohnett
5 min read
May 27, 2022
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Medicare compliance issues are a tough nut to crack as is navigating the murky waters of medical insurance billing and understanding CMS requirements. Over the years, we’ve written a lot of blogs with all sorts of valuable information on everything from HIPAA to audits to compliance programs as well as the Medicare obstacles PTs, OTs, and SLPs grapple with daily. Today, let’s talk about the most frequently asked questions regarding Medicare.

1. What is the Therapy Cap?

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 2022, that annual per beneficiary therapy cap is $2,150 for physical therapy and speech-language pathology services combined, and there is a separate $2,150 amount allotted for occupational therapy services.

If you want to learn more about how the therapy cap works, you can read our guide on the Medicare Physical Therapy Cap

2. What modifiers do I need to know?

KX Modifier

When your patient qualifies for a KX modifier threshold 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), "HCPCS Coding Requirement” of the Claims Processing Manual.

By attaching the KX modifier, you are attesting that the services billed:

  • Qualify for the 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. 

Modifier 59

CMS offers a handy guide on the proper use of modifier 59, but let’s break it down in simpler terms: it’s used to identify services or procedures that typically aren’t reported together that typically, but are appropriate to administer and bill for under the circumstances. Modifier 59 helps identify edit pairs as separate and distinct when it comes to billing. 

The guide also notes that “(d)ocumentation must support a different session, different procedure or surgery, different site or organ system, separate incision/excision, separate lesion, or separate injury (or area of injury in extensive injuries) not ordinarily encountered or performed on the same day by the same individual.”

Modifier 59 isn’t something that CMS is prompting therapists to make greater use of, however; their guidance states that only when no other modifier is appropriate for the billing codes should modifier 59 be used.  

GA Modifier

For services not medically necessary, providers want to get their patients to sign an Advance Beneficiary Notice of Non-coverage (ABN) to indicate their awareness that the services in question likely won’t be reimbursed by Medicare, and that they’ll be responsible for payment. Affixing the GA modifier indicates that an ABN oi on file, and that the responsibility for payment will be assigned to the patient upon denial. 

GP Modifier

A GP modifier is affixed to physical therapy services provided by a physical therapist. While that might seem like it should be evident, the GP modifier is an important distinction in both multidisciplinary clinics as well as clinics that have PTAs on staff, particularly if a patient is being seen by another therapist.     

CO/CQ Modifiers

As of January 2020, services provided in part or entirely by a PTA and OTA require the use of CQ and CO modifiers, respectively, in addition to the GP and GO modifiers. The CQ modifier is for outpatient physical therapy services provided in whole or in part by a PTA, while the CO modifier indicates likewise for OTAs. The exception for PTs is if the treatment is provided in tandem by the PT and PTA, in which case the CQ modifier is not needed.  

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.”  

Fortunately for you, we put in the work to give you the latest updates to the final rule and fee schedule so you don’t have to go digging for the answers you need; you can read our 2022 final rule recap for more information. 

And to help you determine your payment for services under Medicare, here’s the APTA’s Medicare fee calculator for 2022 for reference. 

4. If my clinic doesn’t accept Medicare, can I treat Medicare patients?

According to PT Ann Wendel, “What I learned through research is that if you don’t accept Medicare, you can’t treat Medicare patients for Medicare-covered services. 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 non-covered services including ‘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. What is the 8-Minute Rule?

The 8-Minute Rule is based upon the guidelines for billing time-based codes; while those codes bill in 15-minute increments, therapists need to provide direct treatment for eight minutes to get reimbursed for that unit. However, that doesn’t mean that 16 minutes are now two units; rather, you need an additional 8 minutes past the 15-minute intervals to bill for another unit. Here’s a chart to help explain: 

Where it can get confusing is with remaining minutes from more than one service. If you’ve provided six additional minutes of one service and two of another, neither reaches the threshold for the 8-Minute Rule. Fortunately, if those minutes add up to eight, you can bill Medicare for one unit of the service with a greater amount of time. That may not hold true for Medicare Advantage, however; if payers use the Substantial Portion Methodology (SPM), providers can’t bill for any leftover minutes that don’t meet the 8-minute mark individually.   

Keep in mind that Medicare’s 8-Minute Rule isn’t to be confused with the AMA’s Rule of Eights. We’ve detailed the difference between these methods used to calculate billable units here.

6. What’s the difference between Medicare Part A and Part B?

Medicare Part A covers inpatient hospital care, skilled nursing facility care, nursing home care, hospice care and home health care. Part B, on the other hand, covers medically necessary services to diagnose or treat a condition and preventative services to catch and treat illness early. While it’s a bit of an oversimplification, it’s useful to think of Part A as “hospital insurance” and Part B as “medical insurance”. 

So where do PTs, OTs and SLPs fall in this? If you’re working in private practice treating Medicare patients, your work falls under Plan B. If you’re working at any of the above listed facilities, like an inpatient rehab center or nursing home, Plan A will cover the cost of physical therapy for patients; the key difference is that Plan A requires prior hospitalization in order to cover those costs, whereas Plan B does not. 

7. 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,The Financial Limitation Legislation 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 medical billing mysteries out there, and we love helping our rehab therapists crack the case!


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