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Medicare Limits on Therapy Services

January 21, 2014 0 Comments

Medicare Limits on Therapy ServicesCMS just posted the 2014 version of Medicare Limits on Therapy Services advising beneficiaries about the therapy caps in 2014, the Medicare deductible that they must meet and the 80% payment by Medicare, and the 20% beneficiary liability (which is often covered if a beneficiary has a supplemental or secondary policy).  Most therapy providers don’t bother to read the information sent to beneficiaries, there is too much information that providers have to keep up with from CMS!  For example this year providers are getting accustomed to the continuation of the manual medical review for therapy over the threshold (extended by the SGR legislation through 3/31/2014 along with the MPPR reduction and the therapy caps exceptions process.)  Not to mention that private practices are scrambling to figure out the PQRS for 2014, particularly if they have not participated in the past and are hoping to stave off the 2% penalty in 2016 for 2014 non-participation.

Medicare Limits on Therapy Services – What CMS is Telling Beneficiaries That You Need to Know

CMS is telling beneficiaries about the therapy cap – from what most providers will find is an interesting perspective.  Most therapy providers understand the therapy caps and how they are applied and how they are excepted.  Private practices, rehab agencies, CORFs and SNF have been subject to the therapy caps since their permanent implementation in 2006, and know how to provider therapy beyond the caps through the use of the KX modifier attesting to documentation in the medical records supports therapy over the therapy caps.  Hospitals joined the therapy cap “party” in October of 2012, and Critical Access Hospitals are now newbies to the party, as they are not only trying to figure out how all the outpatient therapy rules work, but more importantly how to figure out in the context of a critical access hospital cost-based reimbursement.  (We’ll save that for another post).

Let’s get back to what CMS is telling beneficiaries in Medicare Limits on Therapy Services.  In answering the question “What can I do if I need services that will go above the outpatient therapy cap limits?, the beneficiary is advised:

You may qualify to get an exception to the therapy cap limits so that Medicare will continue to pay its share for your therapy services after you reach the therapy cap limits. Your therapist must:

  1. Document your need for medically reasonable and necessary services in your medical record
  2. Indicate on your Medicare claim for services above the therapy cap limit that your therapy services are medically reasonable and necessary

A Medicare contractor will review your medical records to check for medical necessity if you get outpatient therapy services in 2014 higher than these amounts:

  1. $3,700 for PT and SLP combined
  2. $3,700 for OT

In general, if your therapist provides documentation that your services were medically reasonable and necessary, you won’t have to pay for costs above the $1,920 therapy cap limits.

Read that last sentence again…..”in general, if your therapist provides documentation that your services were medically reasonable and necessary, you won’t have to pay for costs above the $1,920 therapy cap limits.”  In fact if beneficiaries call the 1-800 Medicare help line, the friendly customer service reps will tell the beneficiary that if the doctor and therapist say it is necessary, then therapy is approved.  Have you had a patient that has reached their goals, and your expert clinical opinion is that therapy is no longer medially necessary?  And then the referring physician sends over another order?  Or how about when your “really” medically necessary therapy is over the $3700 and is reviewed by the Recovery Auditors (RACs) and they don’t think therapy is medically necessary?

No wonder therapists are confused, and no wonder beneficiaries are perplexed by information that suggests they can have therapy when we all know the proving medical necessity of skilled care is more than a physician order or signed certification?

January is a good time to revisit your patient education protocols on Medicare limits on therapy services, medical necessity of skilled care, and what happens if a single complicated episode of care exceeds the $3700 threshold, or multiple unrelated episodes of care go over the therapy caps and threshold.  January is also an excellent time to buff up documentation skills so that those beneficiaries that really need skilled services will have that reflected in documentation that the RACs find “medically necessary”.

What are your learning lessons from the 2013 experience with the therapy caps exceptions process and manual medical review by the RACs?  How do you feel about Medicare limits on therapy services and frank communication with your patients?


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Nancy Beckley

Nancy J. Beckley MS, MBA, CHC: President-Nancy Beckley & Associates LLC. Compliance outsourcing, risk assessment, compliance plans, compliance training, auditing, due diligence, investigation support for therapy providers.

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