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  • CMS Clarifies That PTs Must Use ABN for Services not 'Reasonable and Necessary' That Exceed Therapy Cap

    Guidance issued by the Centers for Medicare and Medicaid Services (CMS) clarifies that in 2013 physical therapists (PTs) must issue a valid Advanced Beneficiary Notice (ABN) to patients to collect out-of-pocket payment from Medicare beneficiaries when Medicare deems services "not reasonable and necessary" after the therapy cap is exceeded.

    CMS added a frequently asked questions (FAQ) document to its therapy resources page that describes in further detail the rules for using an ABN for services that exceed the therapy cap on or after January 1, 2013, as a result of the Taxpayer Relief Act of 2012. The FAQ reinforces that "If the ABN isn't issued when it is required and Medicare doesn't pay the claim, the provider/supplier will be liable for the charges."

    This is a significant change in Medicare policy regarding the use of the ABN when the therapy cap is exceeded. Before 2013, the provider was not required to provide the beneficiary with an ABN when the therapy cap is exceeded for the beneficiary to be liable for denied charges.

    The FAQ clarifies that a PT must issue a valid ABN to the beneficiary before providing services when the PT believes that Medicare will deny a service because it is "not reasonable and necessary," such as when the patient has exceeded the therapy cap and continued services don't qualify under the exceptions process. CMS further clarifies that PTs must not issue the ABN to all beneficiaries who receive services that exceed the cap amount, only to those whose services the PT believes do not meet the Medicare definition of "reasonable or necessary." If the PT submits a claim with the KX modifier for an exception to the therapy cap, he or she is attesting that the services are reasonable and necessary.

    PTs with further questions on using ABNs can contact CMS at RevisedABN_ODF@cms.hhs.gov.


    • I think I read English pretty well, but now I am wondering! The last two sentences in the fourth paragraph above make no sense. If we think the services are not reasonable and necessary and have the patient sign the ABN so the patient can continue but we bill using the KX modifier since the services exceeded the cap, and we have to use the KX modifier, then we are attesting that the services are reasonable and necessary!?? I don't get it! It can't be both ways.

      Posted by Joan-Alice Taylor on 5/3/2013 7:56 PM

    • @ Joan-Alice Taylor: You're correct that it can’t happen both ways; we regret any confusion. The last sentence is meant to provide a contrast to the scenario in which the PT has the patient sign an ABN. If the PT believes the services exceeding the cap are "reasonable and necessary," then he/she doesn’t issue the ABN and instead files the claim with the KX modifier for the cap exception. The examples included in the CMS FAQ linked above can help explain.

      Posted by News Now Staff on 5/3/2013 9:47 PM

    • There should never be a situation in which the PT continues services beyond the therapy cap if the PT determines that those services are not reasonable or necessary under Medicare guidelines. So, an ABN would never be issued if the PT uses the KX modifier for services beyond the therapy cap. It would be contradictory to use the KX modifier AND issue the ABN. If a patient wanted to continue beyond the Medicare limits, they could work out a self pay arraignment with the provider. Am I missing something here?

      Posted by Lorna Brown on 5/5/2013 8:06 PM

    • As I read this, it would appear that the physical therapist's judgment is the determining factor and that CMS will automatically pay claims beyond the cap if we deem the services reasonable and necessary. But my understanding of this process is that CMS may review the PT's documentation and determine that such services do not, in fact, meet that standard and payment would be denied. Not having had the patient sign the ABN, what happens then. Seems to be a bit of a Catch-22.

      Posted by Gabriel Yankowitz -> =GXZC on 5/7/2013 3:31 PM

    • My question is what if I think it qualifies for the cap exceptions process, but in the end Medicare payors don't agree. Can I not go back and bill the patient because they have not signed an ABN? Why can't we do an ABN that says that: "As your PT, I believe this is reasonable and necessary care, but there is the possibility that Medicare will disagree and deny it, therefore if you want to continue treatment you must understand that if Medicare denies it, you as the patient will be responsible." It only seems fair that the patient take on that responsibility, not me as the provider.

      Posted by Melissa Baumgartner -> =LV\EM on 5/7/2013 7:22 PM

    • I agree with Melissa that the ABN should include a language to reflect that the beneficiary is ultimately responsible in case Medicare decide that they will not pay the claim. There is an urgent need for CMS to work with providers to come with a language that will be fair to providers and patients.

      Posted by Benjamin Soliman, RPT, MOPT, DPT, FAAMOPT on 5/8/2013 11:31 PM

    • At recent course I attended by Helene Ferone, she stated that the recent ruling by Medicare stated that the patient IS NOT liable for any charges that are denied in a RAC audit. We are no longer allowed to bill the client if it gets denied after the fact. The PT clinic will have to pay back and eat the cost. So now many of my colleagues in private practice are flat refusing to treat over the cap. I do not feel this is ethical or in the patients best interest, but they are feeling forced into it.

      Posted by Melanie Brennan on 5/12/2013 10:35 PM

    • I work in a hospital based outpatient clinic, thus all of our patients are registered in the hospital's outpatient registration department at their first visit. Our facility (the hospital in general) has included the ABN in the consent to treat forms that patients sign at the initial visit, thus every patient is signing an ABN form no matter what. Anyone else doing this? Not sure how much of a difference it makes as most of our patients who can't afford to pay their bills file for "financial assistance." I would hope that if therapists truly feel their services are no longer necessary they would discontinue care.

      Posted by Christine Copeland, PT, CWS on 6/5/2013 8:45 PM

    • If a patient has a secondary insurance that will cover any services not paid by Medicare (regardless of the reason) if the explanation of benefits indicates PR119 why would Medicare indicate CO119 which prevents the secondary from paying the amount not covered by Medicare? Since this does NOT adversely affect Medicare why has Medicare created a situation in which the provider can no longer save Medicare money by allowing the secondary (which premiums are paid by the beneficiary) to pay for the financial balance of services provided to a patient????? This seems like an intentional waste of Medicare money that could otherwise be saved for future beneficiaries!!! How can we, as providers, facilitate a change in this rule/law??

      Posted by Randy Veroline on 10/14/2013 10:14 AM

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