Home Health & Hospice Week

What you don't know could cost your Part B therapy business thousands.

The new Medicare reimbursement caps for outpatient therapy could drastically limit the therapy services you provide under Part B--unless you know the ropes.

Congress originally passed the caps, which apply only to outpatient rehabilitation therapy provided under the Part B benefit, in the Balanced Budget Act of 1997. The caps do not apply to therapy furnished under the home care benefit.

But then Congress relented and repeatedly postponed the therapy caps. Finally, the caps took effect Jan. 1.

However, in the Deficit Reduction Act passed in January, Congress allowed for an exceptions process to the two caps. One $1,740 cap applies to combined physical therapy and speech-language pathology services for one patient in one year, while the other applies to occupational therapy services annually.

"The cap is a result of perceived overutilization," believes Cindy Krafft, director of rehabilitation with OSF Home Care in Peoria, IL. OSF delivers Part B therapy services in the home in addition to its home care services. "Slowing down the visits and cost is an intention of making a cap."

The hard part for therapy providers is knowing how much room a patient really has under the cap, Krafft notes. "It is a combined cap," meaning outpatient therapy services from different providers all count toward it.

"We would need to know how much has been used before we get patients [which is] a logistical challenge that our reimbursement staff are trying to hammer out," Krafft tells Eli.

Caps Hit Home Care Providers

While the caps hit outpatient therapy practices the hardest, home care providers furnishing outpatient therapy in the home that will feel the pinch too. OSF's Part B therapy program "meets the needs of patients that slip between home health and outpatient therapy," Krafft explains.

OSF serves patients who are no longer homebound but need therapy at home because they don't have transportation to a therapist or refuse to drive to a therapist who is too far away, Krafft relates. Part B therapy in the home also works well for patients who need to work on activities of daily living and meal preparation at home.

The American Physical Therapy Association, for which Krafft is vice president of the home health section, has lately received "more questions about how to set up a Part B program," she notes. However, implementation of the caps may "stifle" growth in this area, Krafft predicts.

Utilize Automatic Exceptions

The Centers for Medicare & Medicaid Services has now spelled out the detailed exceptions process for the therapy caps, and the automatic option looks to be the most promising tool for home health agencies. The process goes into effect March 13.

To qualify for the automatic exception to either therapy cap, patients must have one of the diagnosis codes CMS lists in Feb. 15 Transmittal No. 855.

Try this: Simply review the list of qualifying ICD-9 codes to see if your patient matches up and verify that the therapy you want to provide is relevant and medically necessary.

ICD-9 codes with asterisks indicate comorbidities that, when reported with another condition not on the list, will qualify for automatic exceptions, points out Dave Mason, APTA's vice president of government affairs. However, you must document that both the comorbidity and condition would cause the patient to exceed the therapy caps.

And the list doesn't stop there. CMS notes additional "complex situations" that warrant automatic exceptions. For example, patients who have been discharged from a hospital or skilled nursing facility within 30 days or who have already had therapy for a separate condition that year would qualify for an automatic exception.

Tip: Read the text below the ICD-9 chart in Transmittal No. 855 for a full list of qualifying complex situations.

Krafft expects about half of OSF's Part B therapy patients to need an exception because their services have exceeded the cap amount. Most of those should fall into the automatic category rather than the more burdensome manual option, she projects.

To bill for a patient under the exception, submit a claim with a KX modifier, which indicates the need for an automatic exception, CMS instructs. The therapy cap is retroactive, so you can reopen denied claims submitted since Jan. 1 to claim a patient's exception.

Caution: CMS notes that deviant billing patterns will be reasons for medical review, Mason warns. "So if the overwhelming majority of claims coming from a particular provider have a KX modifier, that's going to be a bright red flag for the carriers to review claims."  

Note: Transmittal No. 855 is at www.cms.hhs.gov/transmittals/downloads/R855CP.pdf. An exceptions process summary is at www.cms.hhs.gov/apps/media/press/release.asp?Counter=1782.