Critical Access Hospitals (CAH) are now under the therapy caps as noted in the 2014 Medicare Physician Fee Schedule’s Final Rule published November 27, 2013. In 2013 CAH therapy utilization for the PT/SLP cap and OT cap counted against beneficiary therapy limits for 2013, and there was no financial consequence to the CAH. The Medicare common working file (CWF) calculated outpatient therapy at CAHs based upon the fee schedule for the CAH’s locality, so therapy utilization counted toward the cap, but was not paid on the fee schedule amount. In a CMS Rural Hospital Open Door Forum last summer, CMS provided commentary regarding their proposal to enter into rule making on this matter and hinted to the listening audience that critical access hospitals were finally going to join the rest of the outpatient therapy world in not only being paid on the physician fee schedule but also subject to the financial limitations of the therapy cap. WOW!
Critical Access Hospitals Under Therapy Caps – How Did This Happen?
The Balanced Budget Act of 1997 that put outpatient therapy providers under the therapy caps (then called the $1500 therapy caps) exempted all hospitals, with the logic being to provide a safe haven for continued outpatient therapy for Medicare beneficiaries who had exceed their caps at private practice, rehab agency or CORF locations. SNF patients exceeding the therapy cap were ineligible to go to a hospital to receive therapy not subject to the cap due to SNF consolidated billing. In a bit of serendipity it was that same Balanced Budget Act that also created critical access hospitals. In the 2014 Medicare Physician Fee Schedule Final Rule CMS notes that after reviewing the Balanced Budget Act they feel that it was the intention in 1997) to have CAHs come under the therapy caps, but to exempt other hospitals, based upon the 1997 legislation. So here we are today, all therapy providers are permanently subject to the therapy caps, with the exception of non-CAH hospitals, who are only under the therapy caps in 2013 – March 31, 2014 as a result of the ATRA and SGR legislation. Keep in mind that when ever Congress has authorized and exceptions process, that the therapy caps may be exceeded, if supported by medical necessity with the KX modifier.
Critical Access Hospitals – A Therapy Call To Action
As a result of critical access hospitals under the therapy caps in 2014, there are a few things that therapy departments will need to deploy quickly:
- Train all staff on Medicare therapy documentation requirements, including applicable local coverage determination (LCD)
- Education for all therapy and coding staff on the Medicare minutes and calculating the number of time codes that can be billed in addition to untimed codes
- Conduct a risk assessment and identify key areas of risk, that likely were overlooked in a cost-based reimbursed world, likely void of chart reviews by CMS contractors
- Establish an internal monitoring and auditing program to ensure that therapy routine reviews of documentation, coding and billing are in place
- Prepare to raise the standards of documentation at the $1920 therapy caps, as well as the $3700 thresholds to specifically address why therapy over the caps is necessary
- Develop a process for submitting documentation to the recovery auditors for manual medical review at $3700
This CMS ruling for critical access hospitals under therapy caps has removed any place or “safe haven” of refuge for the Medicare beneficiary. The ATRA legislation that changed beneficiary liability for therapy over the caps to the provider has also changed the game. Ouch!