Therapy Cap & Medicare Part B Fee Schedule Update

VHCA (3/5/2010)

Earlier this week, Congress provided nursing facilities with a little good news when they passed legislation providing short term relief for the Medicare Part B therapy cap and the Medicare physician fee schedule.  The bill extends the exceptions process for the therapy caps, and also protects the Medicare physician fee schedule from cuts that would otherwise impact not just physicians but all others who are paid on the fee schedule including therapy.  Both provisions are effective through the end of March and the therapy cap exceptions process is retroactive to January 1.

Congress is working on legislation that would provide a fix until the end of the year, and that legislation would also contain the six month extension - until June 30, 2011 - of the additional FMAP assistance provided in ARRA.

Outpatient therapy service providers may now submit claims with the KX modifier, when an exception is appropriate, for services furnished on or after January 1, 2010 through March 31, 2010.  The therapy caps are determined on a calendar year basis, so all patients began a new cap on January 1, 2010.  For physical therapy and speech language pathology services combined, the limit on incurred expenses is $1,860.  For occupational therapy services, the limit is $1,860.  Deductible and coinsurance amounts applied to therapy services count toward the amount accrued before a cap is reached.

Some therapy providers have been holding claims for services furnished on or after January 1, 2010, for patients who exceeded the cap but qualified for an exception under previous law.  These providers may submit those claims to Medicare effective immediately.  Therapy providers, who submitted claims which were denied, for services furnished on or after January 1, 2010, for patients who exceeded the cap but whose services now qualify for an exception, should contact their Medicare contractor to request that their claim be adjusted to add the KX modifier and ensure the appropriate exception applies.

A small number of therapy providers continued to submit claims with the KX modifier for services furnished on or after January 1, 2010, even though the exceptions process had expired on December 31, 2009.  Medicare contractors held these claims and will now begin to release them for processing. These providers do not need to take any action on the claims that were held.

Providers who charged beneficiaries for services that exceeded caps, which are now payable under the exception process, should refund the beneficiary’s cost, less the appropriate amount of deductible and co-insurance. Affected claims should be either submitted or, if already submitted, the provider should contact their contractor for an adjustment.