Friday, May 03, 2013 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.