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Therapy Caps at Critical Access Hospitals

January 24, 2014 0 Comments

Therapy Caps at Critical Access HospitalsTherapy caps at critical access hospitals (CAH) are now in full implementation effective 1/14/2014.  Last year the utilization of therapy at CAH was applied toward the cap, but there was no limitation on the amount of medically necessary therapy that could be provided as the KX modifier was added by CMS only to properly register a beneficiary’s cap utilization.  A Medicare beneficiary’s utilization toward the therapy caps and the $3700 therapy threshold was tallied in 2013, however this year the utilization sets parameters on therapy at CAHs. Let’s take a look at what that means:

  1. Applying therapy caps at critical access hospitals is necessary for the purpose of assessing the amount of therapy that is utilized toward the $1920 financial limits in 2104 as well as the $3700 threshold for manual medical review
  2. CAH must track this utilization in order to determine when to affix the KX modifier signifying that therapy over the caps is medically necessary and documentation to support this is in the therapy documentation
  3. Cost based reimbursement is still the order of the day for CAH outpatient therapy, but compliance must be met with documenting medical necessity over the $1920 and the KX modifier or claims will not be paid

Therapy Caps at Critical Access Hospitals – CMS MM8426

CMS has updated manual instruction with CR8425 to the Medicare Claims Processing Manual as well as a companion piece MM8426 from the Medicare Learning Network.  The key points noted in the MLN Matters article:

Beginning January 1, 2014, outpatient therapy services furnished by a CAH are subject to the therapy cap and related policies,

Pursuant to statute, the exceptions process, including the use of the KX modifier to attest the medical necessity of therapy services above the caps, applies to services furnished by a CAH in CY2014,

Similarly, pursuant to statute, the manual medical review of claims in excess of the $3,700 threshold applies to services furnished by a CAH in CY2014; and

MACs will no longer automatically apply the KX modifier to CAH services, effective January 1, 2014.

CMS has advised that billing staff at critical access hospitals be made aware of these changes noted in CR8426, and summarized in MM8426 above.  For therapy providers there is much more to calculate in the mix that relates to documentation, coding and billing for outpatient therapy claims.  A critical element is that billing staff must communicate with therapy staff to ensure that the KX modifier is only affixed to those claim lines in which the therapist can demonstrate the medical necessity of skilled care beyond the $1920 caps?

What are you going to do if you are facing therapy caps at critical access hospitals?  What problems are you facing?  Are you ready to submit proper claims at the end of January?

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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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