Updated on: April 27, 2013

Drill Down – Documentation is Key for Therapy Claim Reviews

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Original story posted on: April 26, 2013

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As of April 1, the Recovery Audit Contractors (RACs) will start to review therapy claims above the $3,700 threshold cap. Several contractors have already posted both pre- and post-payment issues to their websites. All claim reviews will be done manually and requests for supporting documentation will be sent to the provider. Exceptions to the therapy cap are allowed for reasonable and necessary therapy services. Documentation will be the key to these reviews and the provider should be prepared to send all records as soon as the ADR is received.

Previously, the Medicare Administrative Contractors (MACs) conducted pre-payment reviews on claims reaching the threshold with dates of service January 1, 2013 to March 31, 2013, but as of April 1, the RACs will take over these audits.

The RACs will complete two types of review—pre- and post-payment. Pre-payment Review types for:

  • Claims submitted in the RAC Review Demonstration states will be reviewed on a pre-payment basis: Florida, California, Michigan, Texas, New York, Louisiana, Illinois, Pennsylvania, Ohio, North Carolina, and Missouri.
  • In these states, the MAC will send an ADR to the provider requesting the additional documentation be sent to the Recovery Auditor (unless another process is used by the MAC and the Recovery Auditor).
  • The RAC will conduct manual medical review within 10 business days of receiving the additional documentation and will notify the MAC of the payment decision.

Post-payment Review types for:

  • In the remaining states, CMS will grant an exception for all claims with a KX modifier and pay the claim upon receipt; the RAC will then conduct post-payment manual medical review on the claim.
  • In these states, the Recovery Auditor will request additional documentation and conduct post-payment review and will notify the MAC of the payment decision.

Providers submitting claims over the cap will need to use the KX modifier on their claims to not receive a denial. However, using the KX modifier does not exempt the provider from an audit.

Critical Access Hospitals (CAHs) are not included in the therapy cap, the manual medical review process, or the use of the KX modifier.
The American Taxpayer Relief Act of 2012 (ATRA) was signed into law by President Obama on January 2, 2013, and extends the Medicare Part B Outpatient Therapy Cap Exceptions Process through December 31, 2013.
The Medicare Part B outpatient therapy cap for Occupational Therapy (OT) is $1,900 for 2013, and the combined cap for Physical Therapy (PT) and Speech-Language Pathology Services (SLP) is also $1,900 for 2013. The therapy cap is an annual per beneficiary amount determined for each calendar year. Per beneficiary, services above $3,700 for PT and SLP services combined and/or $3,700 for OT services are subject to manual medical review.

Per CMS, the therapy cap applies to all Part B outpatient therapy settings/providers, including:

  • Therapists' private practices
  • Offices of physicians and certain non-physician practitioners
  • Part B skilled nursing facilities
  • Home health agencies (Type of Bill 34X)
  • Rehabilitation agencies (also known as Outpatient Rehabilitation Facilities–ORFs)
  • Comprehensive Outpatient Rehabilitation Facilities (CORFs)
  • Hospital outpatient departments (HOPDs)

In addition, the therapy cap will apply to outpatient hospitals:

  • TOB 12X (excluding CAHs) or 13X;
  • Revenue code 042X, 043X, or 044X;
  • Modifier GN, GO, or GP; and
  • Date of service on or after January 1, 2013.

Other RAC issues for the week of April 29–May 3, 2013:

RAC Region A Performant


 

Home Health Agency (TOB 34x) Claim Types

  • Post-payment Review - Manual Medical Review of Outpatient Therapy Claims Above the $3,700 Threshold - The Balanced Budget Act of 1997 enacted financial limitations on outpatient physical therapy, occupational therapy, and speech-language pathology services in certain settings. Exceptions to the limits were enacted by the Deficit Reduction Act, and have been extended by legislation several times. Claims for services at or above $3,700 will require a complex medical review process where the beneficiary therapy services have exceeded the threshold for the year. Claims for services furnished January 1, 2013, through December 31, 2013, are subject to this audit.

Outpatient Hospital Claim Types

  1. Post-payment Review - Manual Medical Review of Outpatient Therapy Claims Above the $3,700 Threshold - The Balanced Budget Act of 1997 enacted financial limitations on outpatient physical therapy, occupational therapy, and speech-language pathology services in certain settings. Exceptions to the limits were enacted by the Deficit Reduction Act, and have been extended by legislation several times. Claims for services at or above $3,700 will require a complex medical review process where the beneficiary therapy services have exceeded the threshold for the year. Claims for services furnished January 1, 2013, through December 31, 2013, are subject to this audit.
  2. CPT and HCPCS Code, Duplicate Billing -J13 - Potential incorrect billing occurred for claims billed with the same CPT/HCPCS code more than once per day with the same or different revenue code.

Outpatient Rehabilitation Facility Claim Types

  • Post-payment Review - Manual Medical Review of Outpatient Therapy Claims Above the $3,700 Threshold - The Balanced Budget Act of 1997 enacted financial limitations on outpatient physical therapy, occupational therapy, and speech-language pathology services in certain settings. Exceptions to the limits were enacted by the Deficit Reduction Act, and have been extended by legislation several times. Claims for services at or above $3,700 will require a complex medical review process where the beneficiary therapy services have exceeded the threshold for the year. Claims for services furnished January 1, 2013, through December 31, 2013, are subject to this audit.

Physician/Non-Physician Practitioner Claim Types

  • Cardiac Monitoring, Outpatient, Real-time - J12, DOS on or after 6/29/2011 - The use of real-time, outpatient cardiac monitoring is only allowable under a very select set of conditions. Reviews will determine whether the use of real-time monitoring meets the coverage criteria as outlined in the Novitas Local Coverage Determination (LCD) L27520.
  • Cardiac Monitoring, Outpatient, Real-time - J12 for DOS through 6/28/2011 - The use of real-time, outpatient cardiac monitoring is only allowable under a very select set of conditions. Reviews will determine whether the use of real-time monitoring meets the coverage criteria as outlined in the Novitas (Formerly Highmark) Local Coverage Determination (LCD) L27520.
  • Darbepoetin Alfa - Maximum Units - J12 - Potential incorrect billing occurred for claims billed with dosing amounts not supported in the Darbepoetin Alfa FDA-approved prescribing information, when no additional supporting documentation is received from the provider for complex review within the 45-day response period.

Private Practice Claim Types

  • Post-payment Review - Manual Medical Review of Outpatient Therapy Claims Above the $3,700 Threshold - The Balanced Budget Act of 1997 enacted financial limitations on outpatient physical therapy, occupational therapy, and speech-language pathology services in certain settings. Exceptions to the limits were enacted by the Deficit Reduction Act, and have been extended by legislation several times. Claims for services at or above $3,700 will require a complex medical review process where the beneficiary therapy services have exceeded the threshold for the year. Claims for services furnished January 1, 2013, through December 31, 2013, are subject to this audit.

 


 

Rehabilitation Agency (Comprehensive Outpatient Rehabilitation Facility) Claim Types

  • Post-payment Review - Manual Medical Review of Outpatient Therapy Claims Above the $3,700 Threshold - The Balanced Budget Act of 1997 enacted financial limitations on outpatient physical therapy, occupational therapy, and speech-language pathology services in certain settings. Exceptions to the limits were enacted by the Deficit Reduction Act, and have been extended by legislation several times. Claims for services at or above $3,700 will require a complex medical review process where the beneficiary therapy services have exceeded the threshold for the year. Claims for services furnished January 1, 2013, through December 31, 2013, are subject to this audit.

Skilled Nursing Facility (Part B Only) Claim Types

  • Post-payment Review - Manual Medical Review of Outpatient Therapy Claims Above the $3,700 Threshold - The Balanced Budget Act of 1997 enacted financial limitations on outpatient physical therapy, occupational therapy, and speech-language pathology services in certain settings. Exceptions to the limits were enacted by the Deficit Reduction Act, and have been extended by legislation several times. Claims for services at or above $3,700 will require a complex medical review process where the beneficiary therapy services have exceeded the threshold for the year. Claims for services furnished January 1, 2013, through December 31, 2013, are subject to this audit.

RAC Region D HDI

HHA Claim Types

  • Post-payment Review – Manual Medical Review of Outpatient Therapy Claims above the $3,700 Threshold - In accordance with The American Taxpayer Relief Act of 2012 (ATRA) signed into law by President Obama on January 2, 2013, reviews will be conducted on outpatient therapy claims in Home Health settings reaching the $3,700 threshold for PT and SLP services combined and/or $3,700 for OT services.
  • Home Health Services for 5 to 9 Visits - The unit of payment under home health PPS is a national 60-day episode rate with applicable adjustments. An episode with four or fewer visits is paid the national per visit amount by discipline adjusted by the appropriate wage index based on the site of service of the beneficiary. Such episodes of four or fewer visits are paid the wage-adjusted per visit amount for each of the visits rendered instead of the full episode amount. These payment adjustments, and the episodes themselves, are called Low Utilization Payment Adjustments (LUPAs). Medical documentation will be reviewed to determine that services for only five to nine services within a 60-day episode were medically reasonable and necessary and not subject to the LUPA adjustment.

Outpatient Hospital Claim Types

  • Post-payment Review – Manual Medical Review of Outpatient Therapy Claims above the $3,700 Threshold - In accordance with The American Taxpayer Relief Act of 2012 (ATRA) signed into law by President Obama on January 2, 2013, reviews will be conducted on outpatient therapy claims in Outpatient Rehabilitation Facility settings reaching the $3,700 threshold for PT and SLP services combined and/or $3,700 for OT services.
  • Medical Necessity of Vagus Nerve Stimulation - Vagus Nerve Stimulation (VNS) is reasonable and necessary for patients with medically refractory partial onset seizures for whom surgery is not recommended or for whom surgery has failed. VNS is not reasonable and necessary for all other types of seizure disorders which are medically refractory and for whom surgery is not recommended or for whom surgery has failed. VNS is not reasonable and necessary for resistant depression. Medical documentation will be reviewed to determine that services were medically reasonable and necessary.

Other FI Biller Claim Types

  • Pre-payment Review – Outpatient Therapy Claims above the $3,700 Threshold - In accordance with The American Taxpayer Relief Act of 2012 (ATRA) signed into law by President Obama on January 2, 2013, reviews will be conducted on outpatient therapy claims in outpatient settings reaching the $3,700 threshold for PT and SLP services combined and/or $3,700 for OT services.

 


 

Physician Claim Types

  • Post-payment Review – Manual Medical Review of Outpatient Therapy Claims above the $3,700 Threshold - In accordance with The American Taxpayer Relief Act of 2012 (ATRA) signed into law by President Obama on January 2, 2013, reviews will be conducted on outpatient therapy claims in Comprehensive Outpatient Rehabilitation Facility settings reaching the $3,700 threshold for PT and SLP services combined and/or $3,700 for OT services.

SNF Claim Types

  • Post-payment Review – Manual Medical Review of Outpatient Therapy Claims above the $3,700 Threshold - In accordance with The American Taxpayer Relief Act of 2012 (ATRA) signed into law by President Obama on January 2, 2013, reviews will be conducted on outpatient therapy claims in SNF settings reaching the $3,700 threshold for PT and SLP services combined and/or $3,700 for OT services.

About the Author

Dr. Margaret Klasa is the medical director for Context4 Healthcare. She is responsible for the company's business knowledge discovery unit for medical context as it relates to the daily development of data products and software for medical claims editing and coding with an emphasis on clinical and regulatory guidelines for Medicare and Medicaid and commercial payers.

Contact the Author

Margaret.Klasa@context4.com

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Margaret Klasa, DC, APN, Bc

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