Tuesday, May 01, 2012 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.