Medicare Compliance & Reimbursement

A new modifier provides the key that unlocks automatic exceptions.

There are nearly 100 diagnoses and clinical conditions that can buy providers an exception to the new $1,740 annual spending caps on outpatient therapy services. But to receive automatic reimbursement when a qualifying service exceeds the caps, providers must know the proper way to bill them.

For starters, the automatic exceptions process, which the Centers for Medicare & Medicaid Services released Feb. 15, involves a new modifier requirement. When a physical, speech-language or occupational therapy service exceeds the caps, providers and suppliers must indicate that the service is medically necessary by adding the KX modifier (Specific required documentation on file) to each therapy service that uses a GN modifier (Service delivered personally by a speech-language pathologist or under an outpatient speech-language pathology plan of care), GO modifier (...an occupational therapist or under an outpatient occupational therapy plan of care) or GP modifier (...a physical therapist or under an outpatient physical therapy plan of care).

Providers can find a complete list of ICD-9 codes for diagnoses that qualify for automatic exceptions in a CMS transmittal at www.cms.hhs.gov/Transmittals/downloads/R855CP.pdf.

In addition, providers can use the following "clinically complex situations" to justify an automatic exception for any condition that necessitates skilled therapy services, provided that the services are medically necessary and Medicare-eligible:

• The provider initiates therapy services no more than 30 days after the bene's discharge from a hospital or skilled nursing facility. The claim must include the discharge date and the SNF or hospital name .*

• The bene has a generalized musculoskeletal or other condition affecting multiple sites that does not qualify for automatic exception but will have a direct and significant impact on the recovery rate for another condition that the provider is treating.*

• The bene has a mental or cognitive disorder that will have a direct and significant impact on the recovery rate for another condition the provider is treating.*

• The bene requires concurrent physical therapy and speech-language pathology services that together exceed the cap for necessary services. CMS will grant exception from the combined physical and speech-language therapy cap. This exception has no effect on the occupational therapy cap, however.

• The carrier denies medically necessary outpatient therapy services for a condition because prior services in the same calendar year for a different condition exceeded the cap. The provider or bene must submit a written request and obtain approval from the contractor to use the KX modifier when the bene receives treatment in the same year for the same condition, and the condition does not qualify for an automatic exception.

• The bene requires outpatient therapy services in order to return to a previous place of residence. The provider must document the residence [...]