Manual Medical Reviews: Guidance for Outpatient Therapy Providers
The American Taxpayer Relief Act of 2012, signed into law by President Obama on January 2, 2013, contains a number of provisions affecting the outpatient therapy cap ($1,900) and manual medical review threshold ($3,700) under Medicare.
The Therapy Cap
The statutory Medicare Part B outpatient therapy cap in CY2013 is $1,900 for occupational therapy and $1,900 for physical therapy and speech-language pathology, combined. This is an annual per beneficiary therapy cap amount for each calendar year. The exceptions process to the therapy cap has been extended through December 31, 2013, meaning that occupational therapists may affix the KX modifier on claims for above-the-cap therapy services that are reasonable and necessary.
The therapy cap applies to all Part B outpatient therapy settings and providers including:
- Therapists’ private practices
- Offices of physicians and certain nonphysician practitioners
- Part B skilled nursing facilities (Type of Bill (TOB) 42X, 43X,44X)
- Home health agencies (TOB 34X)
- Rehabilitation agencies (also known as Outpatient Rehabilitation Facilities (ORFs))
- Comprehensive Outpatient Rehabilitation Facilities (CORFs)
- Hospital outpatient departments (HOPDs) (TOB 12X or 13X)
The Threshold
Outpatient therapy services above $3,700 for occupational therapy and $,3700 for physical therapy and speech-language pathology, combined, are subject to manual medical review. As always, the Medicare program and its contractors may still review claims for therapy services below this threshold. The Centers for Medicare & Medicaid Services (CMS) has announced that Medicare Administrative Contractors (MACs) will continue to conduct prepayment review of claims above $3,700 until March 31. These review are to be completed within 10 business days. On April 1, Recovery Audit Contractors (RACs) will take over the process, conducting a prepayment review demonstration for Florida, California, Michigan, Texas, New York, Louisiana, Illinois, Pennsylvania, Ohio, North Carolina and Missouri and postpayment review in all other states.
Outpatient therapy services furnished in a Critical Access Hospital (CAH) now count toward a beneficiary’s annual cap and threshold amount under the Medicare Physician Fee Schedule rate; electronic systems will convert cost-plus payment to fee schedule payment for cap purposes. CAHs themselves, however, are not subject to the therapy cap, the manual medical review process, or the use of the KX modifier.
Additional information will be provided on the MAC websites, and AOTA encourages all outpatient therapy providers to sign-up for their MAC’s listservs to receive updates as they become available. AOTA is concerned about these new rules and the involvement of the RACs, and is in contact with CMS staff to further clarify this guidance. Please email AOTA's Regulatory Affairs Department at regulatory@aota.org or email CMS directly at therapyservicesnpc@cms.hhs.gov with questions and concerns.
Related Resources:
New CMS Rules on Manual Medical Reviews in Outpatient Therapy
CMS Therapy Cap Page on Manual Medical Review
Functional Data Collection Requirements for Outpatient Therapy (CY 2013)
Recent Fiscal Cliff Legislation and the Implications for Occupational Therapy
