2012 Outpatient Therapy Cap
Gayle Lee, J.D.
APTA Senior Director, Health Finance and Quality
Roshunda Drummond-Dye, J.D.
APTA Director, Regulatory Affairs
2012 Therapy Cap
• Congress passed legislation (The Middle Class Tax
Relief and Job Creation Act of 2012 (H.R. 3630) on
February 17 making changes to the therapy cap
exceptions process & other provisions.
• For 2012, the therapy cap amount is $1880 for PT
and SLP combined and a separate $1880 cap for
OT.
• Medicare Advantage plans do not have to
implement a therapy cap.
• Annual per beneficiary cap (does not reset per
diagnosis).
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2012 Therapy Cap: Dollars Accrued
• Therapy cap is based on the allowed
charges.
• Medicare will pay 80% of the allowed
charges ($1504.00) and the beneficiary
will be responsible for the remaining 20%
($376.00).
• MPPR reduction is included in the amount
of the allowed charges.
2012 Therapy Cap: Dollars Accrued
• Providers may access the accrued amount of therapy
services from the ELGA screen inquiries into CWF.
Providers/suppliers may access the remaining therapy
services limitation dollar amount through the 270/271
eligibility inquiry and response transaction. Providers
who bill to FIs will find the amount a beneficiary has
accrued toward the financial limitations on the HIQA.
• Check with your Medicare Administrative Contractor
(MAC) regarding the best way to get this information.
• Beginning October 1, 2012 providers will know the
exact dollar amount accrued toward the therapy cap.
2012 Therapy Cap: Hospitals
• The therapy cap has applied in the past to all
outpatient therapy settings except hospitals.
• Starting October 1, 2012 the therapy cap with an
exceptions process will also apply to hospital
outpatient settings (critical access hospitals are
exempt).
• Hospitals would no longer be subject to the therapy
cap after December 31, 2012 unless Congress
extends the provision in future legislation.
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2012 Therapy Cap: Hospitals
• Therapy services provided in hospitals will
be counted toward the dollar amount
accrued in the common working file
starting October 1, 2012.
– Providers should check the status of dollars
accrued for each patient currently being
treated on October 1, 2012.
Therapy Cap: Exceptions
Process
• Providers may request an exception for therapy
services in excess of the cap any time during CY
2012.
• For 2012 there will be two exceptions process:
automatic exception and manual medical review.
• The exceptions process expires December 31,
2012. Congress will need to pass legislation to
extend it.
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Therapy Evaluations
• Therapy evaluations after the therapy caps
are reached to determine if the patient
needs therapy services would be exempt
from the cap. (97001 PT evaluation and
97002 PT reevaluation).
Therapy Cap: Exceptions
• January 1-October 1, 2012: an automatic exception to
the therapy cap may be made when documentation
supports the medical necessity of the services beyond
the cap. Providers should use the KX modifier.
• October 1, 2012-December 31, 2012: an automatic
exception may be made for claims between $1880$3700 (use KX modifier).
• October 1, 2012-December 31, 2012: Claims exceeding
$3700 in expenditure will be subject to manual medical
review to be paid.
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Therapy Cap: Manual Medical
Review
• Starting October 1 for claims exceeding $3700.
• All therapy services beginning January 1, 2012
count toward the therapy cap amount in
calculating the $3700.
• CMS issued guidance on manual medical review
in a fact and question and answer document.
MACs will issue further guidance soon.
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Therapy Cap: Manual Medical
Review
• For outpatient therapy services that
exceed $3700 there will be an advanced
approval process that will be implemented
in three distinct phases.
• Providers will be assigned to one of three
phases for manual medical review and will
receive notification from CMS by letter and
contractor websites regarding which phase
they are included in.
Therapy Cap: Manual Medical
Review
• Phase I providers: Subject to manual medical
review from October 1‐December 31, 2012.
• Phase II providers: Subject to manual medical
review from November 1‐December 31, 2012.
• Phase III providers: Subject to manual medical
review from December 1‐December 31, 2012.
• List of NPIs and phases to which they are
assigned is available at:
https://data.cms.gov/dataset/Therapy-ProviderPhase-Information/ucun-6i4t
Therapy Cap: Manual Medical
Review
• If a provider’s NPI is not included on the
list, that provider is in phase III.
• Therapists working in the same practice
could be assigned to different phases.
Therapy Cap: Manual Medical
Review
• MACs will issue guidance by September 9
regarding forms to submit and information
from documentation to send for advanced
approval.
• Criteria for medical review will be based on
current medical review standards. Guidance
and additional training will be provided by
CMS for providers and Medicare
Administrative Contractors in the coming
weeks.
Manual Medical Review
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The request shall contain the following information:
Beneficiary Last Name:
Beneficiary First Name:
Beneficiary Middle Initial:
Beneficiary Medicare Claim Number (HICN):
Beneficiary Date of Birth:
Beneficiary Address and Telephone Number:
Name of Provider Certifying Plan of Care:
Address of Provider Certifying Plan of Care:
Manual Medical Review
• Telephone &Fax Number of Provider Certifying Plan of
Care:
• Provider Number of Physician/NPP Certifying Plan of
Care:
• Name of Performing Provider:
• Address of Performing Provider:
• Performing Provider Number:
• Telephone and Fax Number of Performing Provider:
• Number of treatment days requested:
• Expected date range of services:
• Date of Submission
Manual Medical Review
• A cover/transmittal sheet containing the following information
and documentation:
• Cover sheet;
• Justification;
• Evaluation and/or reevaluation(s) for Plan(s) of Care;
• Certification(s) of the plan(s) of care, where available;
• Objectives and measurable goals and any other documentation
requirements of the LCD;
• Progress reports;
• Treatment notes;
• Any orders, if applicable, for the additional therapy services
requested; and
• Any additional information requested by the contractor.
Therapy Cap: Manual Medical
Review
• Medicare Administrative Contractors (MAC) will
have 10 business days to make decisions
regarding whether services will be approved over
the $3700 amount. If a provider request is not
reviewed by MAC within 10 business days, claims
beyond the $3700 threshold will be approved.
• Advanced approval will allow an additional 20
treatment days beyond the $3700 amount.
• Provider will use modifier on claim form to indicate
advance approval given.
• Advanced approval does not guarantee payment.
Retrospective review may still be performed.
Therapy Cap: Manual Medical
Review
• If a provider does not request advanced
approval prior to providing services over
$3700, payment for the claims will stop
and a request for medical records will be
sent to the provider.
• The provider will be subject to prepayment
review for those claims and the time frame
for review will be approximately 60 days.
Therapy Cap: Manual Medical
Review
• A transcript of a special open door forum held by CMS
on the manual medical review process is available at
the link below:
(http://www.cms.gov/Outreach-andEducation/Outreach/OpenDoorForums/Downloads/08
0712TherapyClaimsSODFAnnouncementTranscriptAu
dio.pdf)
A fact sheet and Question and Answer document from
CMS and APTA FAQ are available at the link below:
http://www.apta.org/Payment/Medicare/CodingBilling/
• Questions may be emailed to:
therapycapreview@cms.hhs.gov.
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Contact Information for MACs
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Cahaba (AL, GA, TN)
First Coast (FL, PR, VI)
CGS Administrators (KY, OH)
NGS (CT, NY, UN, QN)
NHIC (ME, MA, NH, RI, VT)
Noridian (AZ, MT, ND, UT, WY, SD, ID, AK, WA, OR)
Novitas (AR, LA, DE, DC, MD, NJ, PA, Arlington & Fairfax,
VA)
• Palmetto (NF, AS, GU, HI, CNMI, NV, SF, VA, NC, SC, WV,
CA)
• Trailblazer (CO, NM, OK, TX)
• Wisconsin Physicians Service (IA, KS, MO, EM, NE, MI, IN)
Contact information for your MAC
List of MACs
– http://www.cms.gov/medicare-coveragedatabase/indexes/contacts-part-b-medicareadministrative-contractorindex.aspx?bc=AgAAAAAAAAAA&
Local Coverage Determinations
– http://www.cms.gov/medicare-coveragedatabase/search/advanced-search.aspx
– http://www.cms.gov/medicare-coveragedatabase/indexes/contacts-contractor-websitesindex.aspx?bc=AgAAAAAgAAAA& (websites)
Resource Info: For Medical
Review
• Medicare Benefit Policy Manual
– http://www.cms.gov/Regulations-andGuidance/Guidance/Manuals/downloads/bp102c15.p
df
• Medicare Claims Processing Manual, chapter 5
– http://www.cms.gov/Regulations-andGuidance/Guidance/Manuals/downloads/clm104c05.p
df
• APTA
– http://www.apta.org/Payment/
• Centers for Medicare and Medicaid Services
– www.cms.hhs.gov
Resource Info: For Medical
Review
Transmittal 2537
CR 7881 (August 31, 2012)
http://www.cms.gov/Regulations-andGuidance/Guidance/Transmittals/2012-TransmittalsItems/R2537CP.html
Transmittal 1117
CR 8036
http://www.cms.gov/Regulations-andGuidance/Guidance/Transmittals/2012-TransmittalsItems/R1117OTN.html
Therapy Cap: Example
• Patient A receives therapy services at a SNF
(Part B) from January 15, 2012-April 20, 2012
and accrues $3800.00 toward the therapy cap.
Patient A is discharged from the SNF and later
goes to an outpatient hospital department for
therapy on October 15, 2012. The hospital
would need to request manual medical review to
get coverage for these services because the
patient has already exceeded the $3700
threshold.
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Therapy Cap: Example
• Patient A receives therapy services from an outpatient
hospital from February 15-May 15, 2012 and accrues
$3800 in therapy services.
• Patient A goes to a private practice for services on
September 20 until November 15. Private practice
submits the claim on September 20 for payment and
the common working file reflects $0 toward the cap.
• On October 1, the $3800 from the hospital therapy
would be added to the common working file; for dates
of service provided to patient A after October 1 the
provider would need to seek advanced approval (if a
phase I provider).
Therapy Cap Example
• Patient A received $4000 of services from
a hospital stay from January 15—May 15,
2012. From July 22, 2012 –August 25,
2012 patient A received services from a
private practice. The private practice
would not need to submit the KX modifier
or submit a request for advanced approval
as Patient A was discharged prior to
October 1, 2012.
Therapy Cap Example
• “A beneficiary was in a skilled nursing facility (SNF) and exhausted
their SNF benefit days under Part A. The beneficiary continued to
receive therapy services under Part B totaling $3,600 (all dates of
service before 10/1/2012). The beneficiary was then discharged
from the SNF and received therapy services from an independently
practicing PT totaling $1,800. The independent PT billed in
November 2012 for services provided after 10/1/2012. The MAC
received the claims and processed them. After these claims were
processed the MAC received the SNF Part B claims totaling $3,600
and processed them. Had these claims been received in advance of
the independent PT services the independent PT would have been
required to have the services approved in advance. In
circumstances such as the example above the contractor is not
required to perform post payment review on the $1,800 provided by
the independent therapist. “
Notification to Beneficiaries
• Beneficiaries who have received $1700 or more
of therapy services in 2012 receive letters in
September 2012 providing them information
about their potential financial liability for services
over the therapy cap amount.
• APTA provided a document for beneficiaries to
provide info on cap.
http://www.moveforwardpt.com/Resources/Advo
cacy.aspx
Therapy Cap: Collecting Out of
Pocket
• If a patient does not qualify for an exception, the
provider can collect out of pocket payment from the
beneficiary.
• It is advisable to give the beneficiary an Advanced
Beneficiary Notice (ABN) if Collecting Out of Pocket.
Revised ABN form (Form-R-131) available on the CMS
website at: https://www.cms.gov/BNI/02_ABN.asp
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Therapy Cap: Collecting Out of
Pocket
• Provider can determine the amount of
payment to collect from the patient; it does
not have to be the fee schedule amount.
• Providers should avoid deep discounts or
providing services for free as that could
violate antikickback statutes.
Therapy Cap: Collecting Out of
Pocket
• If provider would like a denial from Medicare in order
to bill a secondary insurer after the therapy cap
amount is exceeded, the provider could submit claim
with a modifier:
• GX Modifier:
• Notice of Liability Issued, Voluntary Under Payer Policy.
• Report this modifier only to indicate that a voluntary ABN was
issued for services that are not covered.
• Medicare will automatically reject claims that have the –GX
modifier applied to any covered charges.
• GY modifier:
• Notice of Liability Not Issued, Not Required Under Payer
Policy. This modifier is used to obtain a denial on a non covered
service. Use this modifier to notify Medicare that you know this
service is excluded.
NPI reporting
• NPI - Starting October 1, 2012, each request for
payment (i.e. claim form) must include the NPI of
the physician who has reviewed the plan of care.
• For the purposes of processing professional
claims, the certifying physician/NPP is considered
a referring provider.
• Follow instructions in the appropriate ASC X12
837 Professional Health Care Claim Technical
Report 3 (TR3) for reporting a referring provider.
• For paper claims, follow the instructions for
identifying referring providers per Chapter 26 of
this IOM).
NPI reporting
• For the purposes of processing institutional
claims, the certifying physician/NPP and their
NPI are reported in the Attending Provider
fields on institutional claim formats.
• Cases where a patient is receiving care
under more than one therapy plan of care
(OT, PT, or SLP) with different certifying
physicians/NPPs, the second certifying
physicians/NPP and their NPI are reported in
the Referring Physician fields on institutional
claim formats.
NPI
• List of Medicare physician NPIs is
available at the following link:
– http://www.cms.gov/Medicare/ProviderEnrollment-andCertification/MedicareProviderSupEnroll/Medi
careOrderingandReferring.html
Therapy Cap Resources
• CR 6660
http://www.cms.hhs.gov/transmittals/downloads/R1860CP.pdf
• CR 5871, Pub. 100-04, Transmittal 1414
• CMS Pub 100-02, chapter 15, section 220.2
– http://www.cms.hhs.gov/manuals/Downloads/bp102c15.pdf
• CMS Pub.100-04, chapter 5, section 10.2
– http://www.cms.hhs.gov/manuals/downloads/clm104c05.pdf
• APTA website
– apta.org (go to the therapy cap resource center)
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Therapy Cap Resources
• CMS website
– http://www.cms.hhs.gov/TherapyServices/
– Transmittal 2537
CR 7881 (August 31, 2012)
http://www.cms.gov/Regulations-andGuidance/Guidance/Transmittals/2012-TransmittalsItems/R2537CP.html
-Transmittal 1117
CR 8036
http://www.cms.gov/Regulations-andGuidance/Guidance/Transmittals/2012-TransmittalsItems/R1117OTN.html
Therapy Cap: Legislation
• The Government Accountability Office (GAO)
is required to issue a report to Congress no
later than May 1, 2013 on the implementation
of the manual medical review process.
• The report shall include data on the number
of individuals and claims subject to the
process, the number of reviews conducted
and outcomes of those reviews.
• APTA will be setting up complaint form on our
website to report problems with the manual
medical review process.
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Reporting Functional Information
on Claim Form
• By 2013 CMS will implement a claims based
data collection strategy designed to collect data
on the claim form about patient function.
• Proposal included in 2013 physician fee
schedule rule.
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Reporting Functional Information
on Claim Form
• Comment deadline: September 4.
• APTA submitted extensive comments
• Involves reporting of G codes regarding
functional limitation accompanied by a
severity modifier.
• CMS proposes the use of tools and
translation of the scores from those tools to
determine the level of impairment and
severity modifier reported.
• Final rule will be published November 1,
2012.
Functional Limitation Reporting
Functional Limitation Reporting
MedPAC report
• MedPAC must submit a report on how to
improve the outpatient therapy benefit to
Congress by June 15, 2013.
• MedPAC discussed outpatient therapy at
March 2012 meeting & September 7
meeting.
Therapy Cap Studies
• Several Studies contracted by CMS to identify
alternatives to the therapy cap.
• CMS contracted with RTI to perform 5 year study to
collect and analyze date to find a long-term solution to
the therapy cap.
• This involves development and testing of an assessment
instrument to be used in all outpatient therapy settings to
gather more information on the patient.
• After data is gathered, recommendations will be made
for alternative payment policies.
• http://optherapy.rti.org/
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Therapy Cap Studies
• CMS contracted with Computer Sciences Corporation
(CSC) to develop short term alternatives to the therapy
cap.
• Alternatives may include suggestions for systems
changes/edits or code changes (e.g. to services, episode
length, or treatment types).
• Modifications to guidance in Manuals
• Modifications to the therapy cap exceptions process.
• Suggestions would be implemented within 2-3 years.
• 3 options were discussed in the proposed and final 2011
physician fee schedule rule.
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QUESTIONS