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  • CMS Issues New Guidance on Applying Therapy Cap

    The Centers for Medicare and Medicaid Services (CMS) today issued a long-awaited transmittal (2457) implementing certain provisions of the Middle Class Tax Relief and Job Creation Act of 2012 (HR 3630) related to the therapy cap.

    Physical therapists should be aware of the following dates and requirements: 

    • Starting October 1, 2012, the cap will be applied to hospital outpatient settings until December 31, 2012. Critical access hospitals are excluded from the cap.
    • Claims processing requirements associated with the cap will apply to hospitals on/after October 1, 2012 (eg, the exceptions process using the KX modifier). However, in calculating the dollar amount accrued toward the cap beginning October 1, 2012, claims paid for hospital outpatient therapy services since January 1, 2012, will be included.
    • Contractors will provide the total amount accrued toward the therapy cap on all applicable screens and inquiry mechanisms.
    • Claims for services above the therapy cap for which an exception is not granted will be considered a benefit (statutory) denial, and therefore the beneficiary will be liable for payment for the services. It is advisable as a courtesy (but not mandatory) for the provider to give the patient an Advance Beneficiary Notice (ABN) in circumstances for which the patient may need to pay out of pocket.
    • Starting October 1, 2012, providers must identify on the claim form the physician/NPP certifying the therapy plan of care in the “referring provider” field. Claims processing instructions will indicate where this information is to be reported on the claim form. Claims will be returned as unprocessable if this information is not included.

    CMS will issue a Medlearn Matters article on these instructions shortly.

    Transmittal 2457 does not provide information on the medical review process. CMS is still in the process of determining how to proceed with implementation of manual medical review for claims that exceed $3,700.


    • Patients should always receive prior notice when they may have to pay out of pocket, Such notice shoud be required of the provider and failure to have a signed acknowledgement on hand or to submit to CMS up front should void any patient responsibility for charges denied.

      Posted by Gwendoline McCullagh -> BMP^D on 5/2/2012 10:50 AM

    • What is defined as a critical access hospital? How do I know if my hospital is included in this classification?

      Posted by Eric Sparks on 5/4/2012 4:15 PM

    • It's about time CMS finally brought hospitals under the cap. Let's hope they keep hospitals under the cap unless they repeal the cap for everyone. Fred Wingate, PT

      Posted by Fred Wingate, PT on 5/4/2012 5:55 PM

    • Preach on, Fred. I couldn't agree more. That is pure and simple discrimination, in my opinion.

      Posted by Eldon Johnson, PT, MPT, Cert. MDT on 5/5/2012 7:46 AM

    • I understand the frustration of therapy caps not being applied evenly. However, I work at a hospital-connected neuro rehab clinic and how any PT can be pleased that a patient with a severe stroke will be allowed a small fraction of the therapy they will require is beyond me.

      Posted by Maggie Edwards on 5/6/2012 1:44 PM

    • i agree that it is about time that hospitals follow what the rest of us have had to do. i see such abuse of the system in the out-patient setting due to the fact that they were never included in the cap.

      Posted by r.witt, pt on 5/6/2012 7:57 PM

    • So Fred, when ur mom has a stroke and her physical therapy is limited to 8 visits because we know that both PT and Speech therapy are under the same cap, u think that she should now pay for the other multidisciplinary services out of her" fixed income" pocket? I don't think this is the answer to medicares problems.

      Posted by Phil on 5/6/2012 10:50 PM

    • We are often blind to how things that affect our peers or neighbors affect us. If unfair treatment isn't directed at us, we believe it's not our problem. For years, outpatient PTs have been fighting for our patients' rights to receive the amount of care they need. We've had small victories, like a soft cap, extensions, etc., but the cap has not gone away and now THE CAP is spreading. Until now, THE CAP was not an issue for hospitals or the PTs that work for them. I've never understood why hospital outpatient services were exempt from THE CAP. It created an uneven playing field in a competitive environment. Now that we're all in the same boat, maybe there will be an understanding that our profession is getting squeezed because we haven't had the might to fight back - for ourselves and our patients. The reality is that CMS may have put some very powerful entities - large hospital and rehab groups - on our side in this battle for the shrinking pie of medicare dollars. I don't think they will take accept THE CAP without a fight. So, now it's time for all of us together - inpatient and outpatient PTs and the organizations we work for to repeal THE CAP.

      Posted by Daniel Seidler on 5/7/2012 7:56 AM

    • When outpatient clinics start providing "free care" (medicaid,those without insurance) I will support same caps for everyone.

      Posted by Winston Pearson on 5/7/2012 8:58 AM

    • I couldn't agree more with Daniel Seidler's viewpoint. It is unfortunate the patients are the ones who suffer with caps, but it has not been a level playing field for years and it's the small businessman/woman who have been at a disadvantage. Perhaps now that the hospitals will be under the same guidelines the profession will have more political might behind it to repeal THE CAP.

      Posted by Linda Marcellus on 5/7/2012 11:48 AM

    • If it's free then how do they stay open??

      Posted by Dano Napoli on 5/7/2012 12:29 PM

    • Winston, Hospitals need start paying taxes and stop the 100% rate of overbilling, and billing for services/items never delivered. Whoever said 8 visits obviously has no idea what the dollar amount of the cap is. Maybe 8 visits is all that would be covered if her hospital recouped 100% of its exhorbitant charges. However the fee schedule would cover somewhere closer to 30 visits of PT.

      Posted by sean on 5/7/2012 1:07 PM

    • Can anyone provide accurate information as to the actual reimbursement to hospitals on average for the same service provided in a physical therapy OP private practice? How about reimbursement differences for OP private practice vs. POPTS? If you know these numbers please provide them and provide us the region in which you are located. Should the reimbursement/visit rates actually be higher in hospital or POPTS, then the pt is obvioulsly going to hit their cap more quickly. The patient will assume a tremendous amount of responsibility and risks in managing there alotted PT care. Who's going to educate the high risk pt. in Jan/Feb of a calendar year that we need to limit/budget their visits for their present injury/condition because they are quite likely to need services later in the year? (We/PTs are!). Are any clinics out there willing to risk the potential 100% review of their MC charts for one patient exceeding the $3800 cap? I've never been able to confirm the higher reimbursement rate to hospitals for OP PT services. If reimbursement is actually higher, it will be interesting to read the input to this question and the potential impact for staffing ratios and salaries of hospital based practices should the anticpated cap actually take place.

      Posted by robert on 5/7/2012 3:45 PM

    • This comment is for Sean and other PTs in private practice regarding hospital-based OP clinics. First of all, most hospitals do pay taxes as most hospitals are for profit. Second, we are under the same Fee Schedules as private practices. My hospital is in Southeast Florida. AS far as R. Witt's comment that excessive abuse of the system occurs at hospital-based OP clinics because of lack of a CAP, I hope that he reported that. In my 25 yr career at multiple hospital-based therapy clinics, I have only encountered very ethical clinicians and practices. Hospitals are probably one of the most highly regulated and scrutinized health care environments and this includes the OP Therapy clinics. Instead of tossing stones at each other, we should band together to see what can be done to repeal this CAP. P.S.- I have never seen a hospital-based therapy clinic put a private practice out of business because we were not under the cap

      Posted by Bob Rohack on 5/8/2012 4:39 PM

    • Interesting dialogue. There are several issues here. First, the therapy cap should be appealed for all, as it limits care that is needed. It does not matter if the stroke patient that is referenced above is in a private practice or hospital outpatient (receiving interdisciplinary care); regardless of the setting, the pt needs the care. The question is, why are they able to (until now) receive the care they need in a hospital outpatient setting and not a private practice? Second, we have to ask, does the therapy cap, not appied equally across all settings, create either a competitive advantage for some and a competitive disadvantage for others? Having been in both settings, over my career; and currently an administrator in a hospital setting, I clearly see that we/hospitals have had a competive advantage. It is difficult for me to imagine that anyone, hospital or private practice would be blind the advantage hospitals have had. Instead of rejoicing that hospitals now have to follow the same standards as private practices, we should team up together to appeal the cap.

      Posted by Janet on 5/10/2012 10:01 AM

    • I agree w those voices that urge less division between Hospital based practices and Private Clinic based practices with regards to the Cap. The argument should be taken several steps further: The Cap is a reflection of the current funding crisis of Medicare. The current funding crisis is a reflection of the divide in society about the very essence of the Medicare program (privatize it, expand it, contain it in increments). That divide can be understood to reflect the larger divisions and arguments regarding the role of public institutions (governments at the federal, State, and local levels) in providing services to society. The APTA and the profession have historically taken very narrow positions that reflect only the short term self interest of the profession in the closest approximation of a near consensus between the academic, institutional and private practice constituencies of its membership/ leadership. As a result we are left with an argument over the crumbs (whether to apply the Cap to hospitals or not, how to repeal the Cap). it is time to hash out our professions' opinion about some fundamental policy issues: Is Medicare an appropriate vehicle for financing health care? If no, what else will the APTA get behind? If so, to what levels should Medicare be funded and at what compromise in our society? Should the APTA take a position on Tax Policy? ...on the expenditures of the Federal Government for its other priorities (like the Wars in Afghanistan, Pakistan, Yemen or the subsidies on major corporations?) I say the APTA should position itself to speak out on all aspects of society that affect the ability to deliver appropriate rehab services. Until that broad analysis is agreed upon (after an unimaginable amount of wrangling and even division of the organization) we PTs will have an organized voice only on the minor issues. The minor issues that are determined by the outcome of the debate on the bigger ones. We need to expand out voice to address the real causes of underfunding of Medicare: The philosophy that Government should not play a role in health care financing; the mistaken priorities of the US government in prioritizing corporate profit and excessive individual wealth over people; and the over reliance on military solutions to non military problems.

      Posted by Jonathan Holtz on 5/12/2012 1:16 PM

    • @Sean the cap is $1,880 for OT, and $1,880 for PT and Speech combined. I doubt that $1,880 is going to cover 30 visits for you.

      Posted by Hallatc on 5/24/2012 1:31 PM

    • I am a hospital based outpatient therapy provider who has been writing on behalf of the patient ever since the CAPS were initiated. We need to be united on this issue, not divided. We get those patients who cannot continue their therapy at the private PT clinics after their CAPS are exhausted. These patients generally have no other option to continue to get help. We have a man with a TBI who needs many more than '30' visits of PT, OT, & SLP. He and those like him will be the one who suffers from the CAP the most. He is still making measurable, functional progress toward being able to be independent in his environment. Without the hospital OP, he would never be able to reach his goals. Again, I think the CAPS need to be repealed for all services. If we do not stay united in this effort, we will all fall, but our patients will suffer the most. Please continue to write your legislators. Urge them to repeal the CAP. My mom had a CVA - she could not get the IP rehab she needed to reach her potential due to the new stricter regulations. She will never be able to get the kind of services she needs either. Stick together and quit being quick to point fingers at another group who is doing their best to put the patient's needs first.

      Posted by Laurie Hurst on 5/31/2012 5:15 PM

    • I am very saddened by the comments on this forum. As Physical Therapists we should be against any regulation based on arbitrary dollar amounts for any professional physical therapy setting. The therapy cap, no matter what setting is inappropriate and decreases access for those in need of our important services. The fact that we have professionals speaking to each other in this unprofessional and short-sighted way does nothing to enhance our discuss, nor is it beneficial to our profession.

      Posted by Joshua Farley, DPT on 7/2/2012 4:11 PM

    • @Hallatc, The cap sited above is $3700. Unless someone recoups more than $120 per visit - a high estimate (which cannot exceed 4 units), it averages out to about 30 visits. While that may not be nearly enough therapy, it is far beyond the 8 visit statement above.

      Posted by Sean on 7/2/2012 4:44 PM

    • As an OP PT provider dealing with the cap for some time, I believe the exceptions include dx like CVA/TBI affecting major functions such as ambulation and transfers. We have been very fortunate to continue to receive coverage for pts that struggle with functional impairments. If this stops, I think pts around the US will be our voice themselves. A US Senator (Johnson, SD)suffered a CVA and without rehab, would never have returned to office. Every American deserves that opportunity.

      Posted by C Feltman on 7/2/2012 11:09 PM

    • I agree with Joshua. The bottom line is that we are here to help our patients. The caps are a frustration and bickering amoungst ourselves only weakens our profession. We should be professional and united to strengthen our overall stance and perception in the medical community.

      Posted by colleen ehrmann on 7/3/2012 7:10 AM

    • Having worked in both public and private, for-profit and non-profit settings, I'll agree disparity exists, but not consistently to the advantage of 1 side. Most would agree the cap should have fairly been distributed to all settings. In the for profit business, we turned away patients with Medicaid insurance because they produce low to no revenue while the hospital setting accepted all patients, supplying thousands of visits yearly to Medicaid recipients at 2 to 3 dollars reimbursement per visit. Cost to provide the service (therapist compensation) didn't vary greatly between organizations. Furthermore, hospital reimbursement was typically contractually limited due to focussing negotiations with payers on higher reimbursement areas, such as surgical interventions. We felt in the hospital setting, not having the cap was one area that potentially helped even things out a bit. To answer an earlier question, my recollection is the charge masters were not significantly different from one business to the other, but contracts typically gathered better reimbursement for the private organizations. The better question here is why are some attempting to cause division? Shouldn't we be happy for our colleagues that aren't under a cap that we don't like for ourselves, allowing them to better serve patients? Rather, some approach this subject with the immature, "if I can't have it, then you can't either" attitude. Taking joy in the misery of others is sad. Our focus should be to repeal the cap.

      Posted by Mike on 7/19/2012 12:11 PM

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