NGS, one of the largest CMS Medicare Administrative Contractors, has announced that it will implement new edits for physical therapy services billed on the CMS 1500 (of the electronic equivalent). The new edits are effective September 20, 2011 and will screen for frequency and duration of therapy services not consistent with medical necessity. Per the NGS statement on this matter:
In accordance with the Centers for Medicare & Medicaid Services (CMS) Internet Only Manual (IOM), Medicare Benefits Policy Manual, Publication 100-02, Chapter 15, Section 220.2 PDF External (1 MB), services rendered must be reasonable and necessary. In order for a service to be covered, it must have a benefit category in the statute and it must not be excluded. Therapy services are a benefit under Section1861 of the Act. Consult the CMS IOM Publication 100-08, Medicare Program Integrity Manual, Chapter 13, Section 13.5.1 PDF External (233 KB) for full descriptions of reasonable and necessary services.
Effective September 20, 2011, National Government Services will be implementing new edits that must deny services when frequency and duration of the physical therapy services are not considered to be reasonable and necessary. Providers rendering physical therapy services must keep in mind the medical necessity guidelines.
While this edit will may result in either automatic denial as “not medically necessary”, it is likely that claims selected by this new edit will be targeted for ADR, and a review of the claim prior to payment. According to NGS therapy services must meet the following criteria:
To be considered reasonable and necessary, the services must meet Medicare guidelines. The guidelines for coverage of outpatient therapies have basic requirements in common.
There must be an expectation that the patient’s condition will improve significantly in a reasonable (and generally predictable) period of time.
If an individual’s expected rehabilitation potential would be insignificant in relation to the extent and duration of therapy services required to achieve such potential, therapy would not be covered because is not considered rehabilitative or reasonable and necessary.
When there is limited potential for restoration of function, establishment of a safe and effective maintenance program must require the unique skills of a therapist.
A therapy plan of care is developed either by the physician/nonphysician practitioner (NPP), or by the physical therapist that will provide the physical therapy services, or the occupational therapist that will provide the occupational therapy services, (only a physician may develop the plan of care in a comprehensive outpatient rehabilitation facility [CORF]). The plan must be certified by a physician/NPP.
All services provided are to be specific and effective treatments for the patient’s condition according to accepted standards of medical practice; and the amount, frequency, and duration of the services must be reasonable.
While this edit is being applied to Part B claims billed on the CMS 1500 form, and involves primarily physical therapists in private practice, it is good guidance for NGS Part A therapy providers, including CORFs, Rehab Agencies, SNF Part B, and Hospital OP therapy departments.