This FAQ was developed December 21, 2011. As further details regarding legislation and administrative claims processing issues emerge, this document will be updated.
December 23, 2011: Legislation Passed Today to Prevent Caps and Cuts for 2 Months.
What is the therapy cap amount for 2012?
In 2012, the therapy cap amount is $1,880 for PT and SLP combined. A separate $1,880 amount is allotted for OT services.
Is there an exceptions process in 2012?
The exceptions process expired December 31, 2011. Congress must pass legislation to extend the exceptions process in 2012. APTA continues to aggressively advocate for an extension of the exceptions process for 2012. To remain informed of congressional action related to the extension of the therapy cap exceptions process, sign up for APTA's advocacy updates at www.apta.org/pteam. These updates can also be found at www.apta.org/LegislativeAction/.
Background
Have speech language pathologists been given their own cap or are they still combined with physical therapy? If so, why and what are the implications for physical therapists now that speech language pathologists have their own billing privileges under Medicare?
Speech language pathology services and physical therapy services are still combined under the same therapy cap due to language included under the Medicare statutes. Prior to receiving their own billing benefit under the Medicare program in July 2009, services provided by speech language pathologists in skilled nursing facilities, home health agencies, and hospitals under the Part B benefit did accrue toward this cap, and it did not appear to have a significant impact. Although we do not expect a significant difference due to the small number of speech language pathologists enrolled in private practice, the implications for the cap now that speech language pathologists are billing the Medicare program directly will need to be monitored.
Why do the therapy caps not apply in outpatient hospital departments?
When Congress passed the Balanced Budget Act of 1997, outpatient hospital departments were excluded from the therapy cap. Congress wanted to create a "safety net" for Medicare patients who exceed the cap. There was no specific rationale for Congress choosing outpatient hospitals as the "exempt" setting.
How do I determine if my facility is considered an outpatient hospital?
The outpatient hospital setting is exempt from the therapy cap financial limitations. In order to bill the services through the main provider (hospital) and thus be exempt from the therapy cap limit, the facility must have "provider-based status." This means the relationship between the main hospital and the provider-based entity or department of the provider must meet certain requirements set forth in the Medicare regulations (42 CFR section 413.65). These requirements relate to common licensure; operation under the ownership and control of the main provider (eg, same governing body; same bylaws, administration, and supervision); location (eg, must be within 35 miles of main provider or serve same patient population); integration of clinical services; financial integration; management contracts; and other areas.
Can a SNF resident receive services from an outpatient hospital after the cap has been exceeded?
Patients who are residents in a Medicare-certified part of a SNF may not use outpatient hospital services for therapy services over the financial limits, because consolidated billing rules require all services to be billed by the SNF.
Coding and Billing
Can I continue to use the KX modifier after January 1, 2012, to obtain an exception to the therapy cap for my patients?
The exceptions process expired December 31, 2011, which means that therapists may no longer use the KX modifier to obtain an exception. Congress must pass legislation to extend the exceptions process and allow the use of the KX modifier in 2012.
Does the cap amount "reset" for each diagnosis? For instance, if a patient receives PT services January-March for a hip replacement and is discharged, then returns in September as a result of a stroke, is there 1 cap for the first episode of treatment and a new cap for the second episode of treatment?
No, the therapy cap is an annual per-beneficiary cap.
With the cap for 2012 of $1,880 for Part B PT/SLP benefits, how does the cap count toward the patient responsibility of 20%? For example, for outpatient services, the patient is responsible for 20% of allowable charges.
Medicare will pay 80% of the allowed charges ($1,504), and the patient will be responsible for the remaining 20% ($376).
Where do I find information about the dollar amount that my patient has accrued toward the therapy cap?
All providers and contractors may access the accrued amount of therapy services from the ELGA screen inquiries into CWF. Providers/suppliers may access the remaining therapy services limitation dollar amount through the 270/271 eligibility inquiry and response transaction. Providers who bill to FIs will find the amount a patient has accrued toward the financial limitations on the HIQA. Some suppliers and providers billing to carriers may, in addition, have access to the accrued amount of therapy services from the ELGB screen inquiries into CWF. Suppliers who do not have access to these inquiries may call the contractor to obtain the amount accrued.
If the cap exemption ends, and Medicare no longer is covering services beyond the cap, can we use GA/GY/GX codes and bill the secondary insurance plans for reimbursement?
Yes. You should provide the patient with an ABN explaining that services beyond the cap amount are not covered, and submit the claim to Medicare with the modifier for a denial.
If a Medicare beneficiary chooses to continue treatment in a setting that is not an outpatient hospital, and there is not an exceptions process in place, at what rate can the services be billed?
If the beneficiary chooses to continue treatment at a setting other than the outpatient hospital where medically necessary services may be covered, the services may be billed at the rate the provider/supplier determines. However, be aware that provision of free or deeply discounted services can potentially be a violation of the anti-kickback statutes.
Practice Administration
If there is no exceptions process in 2012, what are my options for delivery of services to my Medicare patients who exceed the $1,880 cap amount?
If Congress does not extend the exceptions process, Medicare beneficiaries have 2 options. They can either continue to receive services through their current physical therapists and pay for these services out of pocket, or they can elect to receive services through an outpatient hospital department.
If the patient elects to pay out of pocket, it is advisable to obtain a signed Advanced Beneficiary Notice (CMS-R-131) (ABN) from the patient, although the use of the ABN is voluntary. Then the therapist can collect cash from the patient or bill the patient’s secondary insurance. The secondary insurance may require a denial from the Medicare program before it will cover these services. If a patient would like to continue to receive coverage under Medicare for outpatient physical therapy services he or she must be discharged and go to an outpatient hospital department to receive those services.
Is it okay to offer Medicare patients an "aftercare" program if they use up the cap at a reduced rate or flat fee?
If a patient has exceeded the cap and there is no exceptions process, a physical therapist can continue treatment; however, the patient will be financially responsible for these services. CMS recommends that you give the patient an Advanced Beneficiary Notice (ABN); however, it is not mandatory that you provide an ABN. If the patient exceeds the cap, the provider is not required to bill Medicare. If the service is statutorily non-covered, the claim could be submitted using the GY modifier indicating the service is non-covered by statute.
When charging patients out of pocket, it is very important to have a set fee schedule that applies to all patients regardless of their insurer (Medicare or private insurance). Additionally, any discounts offered should be offered to all patients regardless of their source of insurance coverage, and all discount policies should be established in writing. For instance, you may have a policy that offers a 20% discount to patients with income less that a certain dollar amount in a given year or for patients with medical costs that exceed a set limit in a given year.