RAC therapy reviews are underway as CMS paved the way for manual medical review of therapy claims over the $3700 threshold by the Recovery Auditors (RACs). Effective January 16th CMS provided a contract addendum to the current (outgoing) RACs in all 4 regions to begin a review of therapy claims over $3700 submitted between March 1, 2014 through December 31, 2014 during the RAC “pause”. All claims over the threshold were paid during the March – December period, including those in the prepayment review states. CMS has alerted the therapy community that all claims would be reviewed when the new RAC contracts were awarded, and given the delay in awards, CMS has initiated a limited restart, including therapy reviews.
RAC Therapy Reviews Underway
CMS has indicated that the therapy reviews will be phased with a series of ADRs (up to five) to clear the 2014 backlog of claims that must be reviewed by law. The ADR review process, in which claims will be reviewed in chronological order, based on the month in which they were paid, for institutional providers including hospitals, skilled nursing facilities, CORFs, Rehab Agencies will process as follows:
- The 1st additional documentation request (ADR) sent to each provider for these claims will only request the documentation for one claim.
- The 2nd ADR sent to a provider can request up to 10% of the total number of eligible claims.
- The 3rd ADR sent to a provider can request up to 25% of the remaining eligible claims.
- The 4th ADR sent to a provider can request up to 50% of the remaining eligible claims.
- The 5th ADR sent to a provider can request up to 100% of the remaining eligible claims.
Background Information on Therapy Caps and $3700 Threshold
There is an annual per-beneficiary therapy cap amount determined for each calendar year (in 2015 this amount is $1940). Exceptions to the therapy cap are allowed for reasonable and necessary therapy services. Services costing more than $3,700 for PT and SLP services (combined) and/or $3,700 for OT services are subject to manual medical review, which CMS assigned to the Recovery Auditors effective April 1, 2013.
Per CMS, the therapy cap applies to all Part B outpatient therapy settings and providers, including:
- Therapists’ private practices
- Offices of physicians and certain non-physician practitioners
- Part B skilled nursing facilities
- Home health agencies (type of bill: 34X)
- Rehabilitation agencies (also known as outpatient rehabilitation facilities, or ORFs)
- Comprehensive outpatient rehabilitation facilities (CORFs)
- Hospital outpatient departments (HOPDs)
- Critical access hospitals (CAHs)
In addition, the therapy cap will apply to outpatient hospitals as detected by:
- Type of bill (12X, 13X, or 085X)
- Revenue code (042X, 043X, or 044X)
- Modifier (GN, GO, or GP); and
- Dates of service on or after Jan. 1, 2014
A CMS 2013 presentation provided an overview of manual medical review of claims over the $3,700 threshold, and it can be found on the CMS website.
(Note: portions of this post originally appeared in an article on RACMonitor