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  • The Post-Therapy Cap System: 5 Basics You Need to Know

    When Congress adopted a federal spending package that included the elimination of the hard cap on Medicare therapy services, it didn't just remove a rule—lawmakers also adopted a new system of payment thresholds and triggers, and a differential payment rate for physical therapist assistants (PTAs) and occupational therapy assistants (OTAs), among other things.

    APTA supported an end to the hard cap, which is a significant win for the most vulnerable Medicare patients, but other parts of the system that replaced it are problematic.

    The elimination of the hard cap is retroactive to January 1, 2018, but not all details of the post-cap system have been worked out, and it's possible that some may change before their implementation dates. In the meantime, here are the basic elements of the new system.  

    1. It boils down to a threshold for using KX modifiers and a trigger for possible medical review.
    The basic idea is this: outpatient therapy under Medicare now has a $2,010 threshold; services delivered beyond that require a KX modifier indicating that the service meets the criteria for a payment exception. When therapy reaches $3,000, it's subject to possible targeted medical review—although CMS didn't receive any additional funding to conduct these reviews.

    2. Physical therapy and speech-language pathology still are lumped together in the thresholds.
    Just as in the previous payment system that included a hard cap and exceptions process, the new system doesn't separate physical therapy from speech-language pathology in establishing thresholds. Those $2,010 and $3,000 limits are for physical therapy and speech-language pathology therapy combined—another element opposed by APTA.

    3. The thresholds apply to all part B outpatient therapy services—including services provided by hospital outpatient departments.
    For the brief time beginning in January when the therapy cap was in place, hospital outpatient facilities were not subject to the cap. That changed with the adoption of the budget package, and now these departments or clinics are subject to the thresholds: $2,010 for use of the KX modifier and $3,000 for potential targeted medical review.

    4. The PTA payment differential will start in 2022—along with a special claims designation.
    In the post-cap payment system, outpatient therapy services performed by physical therapist assistants (PTAs) and occupational therapy assistants (OTAs) will be reimbursed at 85% of the Medicare physician fee schedule—a change opposed by APTA. However, that's not set to happen until 2022.

    For now, claims do not include a way to designate whether a service was delivered by a PTA, but that too will change by 2022, when CMS will develop a modifier to make that distinction. Between now and then, look for opportunities to comment on proposed rules around this process, along with guidance and more details as they develop.

    5. Home health also will be subject to the PTA payment differential, absent a plan of care.
    The 85% payment differential for services provided by a PTA or OTA will apply to home health care provided to Medicare part B beneficiaries—but only when a home health plan of care is not in effect. The budget deal that resulted in the end to the hard cap also established other new rules for home health.PT in Motion News recently reported on these additional changes.

    Now Available: Recording of 'Insider Intel' Session on Therapy Cap, Home Health, More

    The budget deal reached by Congress earlier this month included changes that affected not only the hard cap on therapy services under Medicare but also a host of other health care-related issues, including home health. Are you ready for what's coming?

    "Insider Intel" to the rescue.

    Now available: a recording of an APTA "Insider Intel" phone-in session devoted to the Medicare landscape since the budget deal. Hosted by staff from the APTA regulatory affairs unit, the 30-minute session covered where things stand and included a question-and-answer session.

    CMS Offers Settlement Option for Providers With Denial Appeals in Limbo

    The US Centers for Medicare and Medicaid Services (CMS) is offering some providers a chance to settle backlogged claims denial appeals at 62% of net allowed amounts, but there are limits and deadlines involved.

    Called the "Low Volume Appeals Initiative," the program is part of a CMS attempt to clear a glut of Medicare appeals piling up at the Office of Medicare Hearings and Appeals (OMHA) and the Medicare Appeals Council levels.

    The program is limited to providers who have fewer than 500 appeals with no single appeal exceeding $9,000. Providers begin the process by submitting an "expression of interest" form to CMS. Providers with National Provider Identifiers (NPIs) ending in an even number have from between now and March 9 to turn in the form; the window for providers with NPIs ending in odd numbers will open on March 12 and close on April 11.

    To qualify for the settlement, the appeal must meet certain criteria:

    • The appeal was pending before the OMHA and/or council level of appeal as of November 3, 2017.
    • The appeal has a total billed amount of $9,000 or less.
    • The appeal was properly filed at the OMHA or council level as of November 3, 2017.
    • The claims included in the appeal were denied by a Medicare contractor and remain in a fully denied status in the Medicare system.
    • The claims included in the appeal were submitted for payment under Medicare Part A or Part B.
    • The claims included in the appeal were not part of an extrapolation.
    • The appeal is still at the OMHA or council level of review when an administrative agreement is fully executed.

    The final agreement would cover all claims that are approved for settlement. Once finalized by CMS and the provider, Medicare Administrative Contractors (MACs) will total the claim amounts and make a single total payment within 180 days of CMS' signature on the agreement.

    Questions about the initiative can be emailed to MedicareSettlementFAQs@cms.hhs.gov.