AOTA Gains Victory in Passage of the Tax Extenders Legislation
By Tim Nanof
While the battle of the therapy cap seems never to end, AOTA achieved yet another victory in achieving an extension of the exceptions process through the remainder of 2012. The House and Senate have passed the Middle Class Tax Relief and Job Creation Act of 2011 (H.R. 3630), which extends the Medicare Part B Outpatient Therapy Cap Exceptions process through December 31, 2012. The law also avoids the scheduled 27.4% cut to the Medicare Physician Fee Schedule and extends current payments through 2012.
AOTA worked closely with leaders in both the House and Senate to achieve the extension of the exceptions process and succeeded in shaping several provisions in the bill. While the exceptions process has been extended through December 31, 2012, the legislation also creates some changes to the process, of which AOTA members should be aware:
- The KX modifier must now be used on all claims exceeding the statutory level of the cap, which is $1,880 for 2012. Congress included this requirement because they noted that CMS contractors were not always requiring use of the modifier on claims exceeding the cap. The KX modifier is intended to note spending beyond the level of the cap and, more importantly, to attest to the medical necessity of those services.
- Effective October 1, 2012, all therapy claims, above and below the level of the cap, must include the national provider identifier (NPI) of the physician responsible for certifying and periodically reviewing the plan of care.
- Also effective October 1, 2012, all claims exceeding $3,700 will be subject to what the new law states is a “manual medical review process.” The bill notes that this process should be similar to the manual review under the original exception process instituted in 2006. Only about 5% of Medicare beneficiaries receiving therapy exceed $3,700 in therapy per calendar year. While the 2006 manual review process required precertification, it is AOTA’s understanding that precertification was not Congress’s intent, nor did CMS want to institute precertification of therapy claims at any level. AOTA is working to clarify Congressional intent. The law requires CMS to consult with stakeholder regarding development of the review process, and AOTA will be at the table.
- No later than October 1, 2012, the therapy cap of $1,880 with exceptions will be applied to hospital outpatient department (HOPD) settings. This cap however will expire on December 31, 2012. HOPD settings were exempted from the cap to allow a safety net for beneficiaries if and when other outpatient settings were subject to the cap. Extending the temporary cap to HOPD with exceptions creates a uniform system of utilization control across all outpatient settings and does not restrict access to medically necessary care. Initially a permanent HOPD cap was proposed, but AOTA’s leading role in opposition resulted in this important victory that protects patient access. In addition the temporary cap with exceptions does not create further financial barriers to action on the cap in the future that would have been created by a permanent cap on HOPD settings.
- The legislation also requires two reports on outpatient therapy to be completed in 2013. Congress directs the Medicare Payment Advisory Commission (MedPAC) to complete a report by June 15, 2013, that recommends payment reforms that better reflect acuity, condition, and the therapy needs of the patient. MedPAC is also instructed to include an examination of private sector initiatives related to therapy benefits in their report. The Government Accounting Office (GAO) is also directed to issue a report regarding the manual medical review process instituted by the law. The report must detail the number of beneficiaries subject to the process, the number of reviews conducted, and the outcome of the reviews.
- Finally on January 1, 2013, CMS is required to begin collecting additional data on therapy claims related to patient function during the course of therapy in order to better understand patient conditions and outcomes. The use of the word “function” presents opportunities to showcase the results of occupational therapy.
AOTA believes that the legislation is a step forward in identifying an alternative payment system for outpatient therapy that will result in elimination of the arbitrary therapy cap. While several changes are included to the exceptions process, a path to accessing medically necessary care will be available for all Medicare beneficiaries and for the providers serving them.
Additional information regarding implementation of the enhanced exception process will be available as CMS releases additional information. AOTA will provide guidance to our members to ensure their Medicare clients can continue to receive the right amount of occupational therapy at the right time so that they can continue to live life to its fullest.
Tim Nanof is AOTA's Director of Federal Affairs.
Medicare Part B Outpatient Therapy Cap and Exceptions Process for 2012: FAQs