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Therapy Manual Medical Review Again

July 5, 2016 2 Comments

Here we go again!  Therapy manual medical review again! Multi-ethnic group of people holding the tabletJust when the therapy community, particularly those in private practice, were thinking that CMS forgot about manual medical review of outpatient therapy over $3700 CMS opted a stealth move, the though an update to the therapy cap website.  It represents a long-awaited announcement, but not a particularly welcome announcement, as we still don’t have substantive details on who is going to be targeted for manual medical review of therapy claims over the $3,700 cost threshold.

In tasking a SMRC to conduct the therapy manual medical reviews, CMS also announced the parameters to include in post-payment reviews:

  1. Providers with a high percentage of patients receiving therapy beyond the threshold ($3,700) as compared to their peers during the first year of implementation of the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015.
  2. The evaluation of the number of units/hours of therapy provided in a day.

The CMS announcement also indicated that therapy provided in skilled nursing facilities (SNFs), private practices, and rehab agencies (OPT) or “other rehabilitation providers” were subject to manual medical review. Noticeably absent from the specific listing of providers was outpatient therapy provided in hospital outpatient departments.

MACRA extended the therapy cap exception process through Dec. 31, 2017 and modified the requirement for manual medical review (MMR) for services over the $3,700 therapy thresholds. MACRA also eliminated the requirement for 100-percent review of all claims exceeding the $3,700 thresholds while introducing this targeted review process. Of note, MACRA prohibits the use of RAs to conduct MMR.

The therapy cap for 2016 is $1,960 for physical therapy (PT) and speech language pathology (SLP) combined and $1,960 for occupational therapy (OT). The 2015 therapy caps were $1,940. The therapy caps are increased based upon an index, whereas the threshold has remained fixed at $3,700 since its original “trial” in late 2012. Like the therapy caps, there is a threshold for PT and SLP combined as well as a threshold for OT.

Therapy Manual Medical Review Again!

Now that CMS has identified a SMRC to conduct MMR, the therapy community will want to refresh its memory on two other therapy reviews by the SMRC: The “Superstorm Sandy” review as well as the review of therapy that stopped just under the therapy cap. Notable is the suspiciously high error rate due to non-response to the ADRs, leaving therapy leaders to wonder. The following information was provided by CMS to the therapy constituency group (Therapy Cap Coalition):

  • The Supplemental Medicare Review Contractor (“SMRC”), Strategic Health Solutions will examine providers who furnish “a lot” of minutes/hours of therapy per day at the patient level as well as providers of service who have a “high” percentage of patients that exceed the $3,700 threshold. According to CMS, the SMRC is permitted to define what “a lot” and “high” percentage means; however, they have an understanding on how therapy is provided in all settings. These definitions could evolve over time as the SMRC improves and assesses its data.
  • A different analysis of claims and minutes will be used between individual providers and large groups, for example, if a solo provider is billing 16 hours a day, 365 days a year, this is would be a red flag.
  • The SMRC has been directed to compare like providers such as SNF to SNF, private practice to private practice, etc.
  • The review contractor will send one ADR for 40 claims per provider. Providers should only expect one request with the possibility of additional requests if the provider appears to have significant compliance issues.
  • The SMRC has 45 days to review the claims and medical records and issue a determination to the provider which will address all 40 claims under review, some of which may be denied and others approved. Procedurally, the provider may engage the SMRC in a discussion period to provide additional details that may overturn the initial determination in the provider’s favor. Any denials not resolved during the discussion period will be turned over to the applicable Medicare Administrative Contractor (MAC) for recoupment at which time the provider may appeal the SMRC’s determination.
  • The SMRC has updated its website and it now includes a sample ADR letter for reference. https://strategichs.com/smrc/current-smrc-projects/.

Much of frustration with the manual medical review process had been tied to the disconnect in communication between the Recovery Auditors (RAs) and the Medicare Administrative Contractors (MACs), and the inconsistencies in providing a detailed reason for denials, which CMS had promised when the program was turned over to the RAs in spring of 2013. Therapy providers have reported thousands of dollars of outstanding revenue stemming from the pre-payment review process (2013 through February 2014) and the bungled communication, requiring many to move to appeals just to establish that additional documentation requests (ADRs) were submitted when the RA claimed otherwise.  Will this new process be any better?

Did you have claims over $3700 in 2015?  Have you received an ADR for 40 claims from CMS/Strategic Health Solutions? Have you profiled your practice (or department) to assess how you are being profiled for this review?

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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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Comments (2)

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  1. Dee says:

    Does this article apply to home health agencies providing medically necessary services under the PPS episode under Part A? Is this for just Part B, not under a POC, etc.?

  2. Hi Dee. Manual medical review (MMR) applies only to therapy provided under Part B and paid under the Medicare Physician’s Fee Schedule. MMR review is conducted on selected claims over the $3700 therapy threshold. Therapy under the HH PPS is not subject to manual medical review. Thanks for your question.

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