CMS, Congress, and the Therapy Caps: Good News or Bad?

Uncertainty persists amid the looming prospect of yet another federal government shutdown.

The federal government is open for business after the House and Senate agreed on a continuing resolution to fund operations through Feb. 8, 2018 – when we presumably start all over again, ironically right after Groundhog Day.

Are you humming “I Got You Babe” yet? Legislative or regulatory relief currently seems like a pipe dream for thousands of providers, including hospitals, Skilled Nursing Facilities (SNFs), private practices, rehab agencies, and Comprehensive Outpatient Rehabilitation Facilities (CORFs) that are trying to understand not only claims submission, but perhaps more importantly how to explain to beneficiaries in their care if they will be able to continue their medically necessary physical, speech, and occupational therapy. 

So what do we know, or better put, what do we think we know? Friday afternoon appears to be the day that the Centers for Medicare & Medicaid Services (CMS) will be updating therapy providers via their “Spotlight” web page – which seems odd, because therapy providers generally don’t know why or how to access that page. Therapy providers all should bookmark the CMS therapy page, the CMS therapy cap page, as well as the CMS Jimmo Settlement page. Would it have been so hard for CMS to post critical notices on claims submission for therapy to the therapy cap page? Perhaps that’s a story for another day. 

American Physical Therapy Association – Helping Inform Their Constituents

During an American Physical Therapy Association (APTA) call last Thursday evening, listeners were updated on the significant effort that the therapy cap coalition has been expending, including a) work within the legislative process to move forward a bipartisan, bicameral agreement to permanently end the therapy cap; and b) seeking time-critical guidance from CMS on claims submission and the role of the Advanced Beneficiary Notification (ABN) of Non-Coverage in the process. Providers have urgent questions, such as: should providers issue an ABN? Is the ABN to be issued for medically necessary services that are statutorily excluded therapy services over the cap? If so, what modifier should be coded? If the cap issues are resolved, will CMS operate under the assumption of retroactivity to Jan. 1? What we knew from CMS as of Thursday was this:

“CMS is committed to implementing the Medicare program in accordance with all applicable laws and regulations, including timely claims processing. Several Medicare legislative provisions affecting providers and beneficiaries recently expired, including exceptions to the outpatient therapy caps, the Medicare physician work geographic adjustment floor, add-on payments for ambulance services and home health rural services, payments for low-volume hospitals, and payments for Medicare-dependent hospitals. CMS is implementing these payment policies as required under current law.

However, CMS is taking steps to limit the impact on Medicare beneficiaries by holding claims affected by the therapy caps exceptions process expiration for a short period of time beginning on Jan. 1, 2018. Only therapy claims containing the KX modifier are being held; claims submitted with the KX modifier indicate that the cap has been met but the service meets the exception criteria for payment consideration. Currently, if claims are submitted without the KX modifier and the beneficiary has exceeded the cap the claim will be denied.

CMS is not holding any other claims except those affected by the therapy caps. If legislation regarding the therapy caps is not enacted in this short period of time, then CMS will release and process the therapy claims accordingly. Under current law, CMS may not pay electronic claims sooner than 14 calendar days (29 days for paper claims) after the date of receipt, but generally pays clean claims within 30 days of receipt.”

CMS Update

Late Friday afternoon, the notice was updated with the following amended language:

“For a short period of time beginning on Jan. 1, 2018, CMS took steps to limit the impact on Medicare beneficiaries by holding claims affected by the therapy caps exceptions process expiration. Only therapy claims containing the KX modifier were held; claims submitted with the KX modifier indicate that the cap has been met but the service meets the exception criteria for payment consideration. During this short period of time, claims that were submitted without the KX modifier were paid if the beneficiary had not exceeded the cap but were denied if the beneficiary exceeded the cap.

Starting Jan. 25, 2018, CMS will immediately release for processing held therapy claims with the KX modifier with dates of receipt beginning from Jan. 1-10, 2018.  Then, starting Jan. 31, 2018, CMS will release for processing the held claims one day at a time based on the date the claim was received, i.e., on a first-in, first-out basis. At the same time, CMS will hold all newly received therapy claims with the KX modifier and implement a “rolling hold” of 20 days of claims to help minimize the number of claims requiring reprocessing and minimize the impact on beneficiaries if legislation regarding therapy caps is enacted. For example, on Jan. 31, 2018, CMS will hold all therapy claims with the KX modifier received that day and release for processing the held claims received on Jan. 11. Similarly, on Feb. 1, CMS will hold all therapy claims with the KX modifier received that day and release for processing the held claims received on Jan. 12, and so on.”

Challenges, Confusion, and Concern

Some current challenges and unanswered questions revolve around the applicability of therapy caps to hospital outpatient departments. Given the expiration of the therapy caps exceptions process (under MACRA, the Medicare Access and CHIP Reauthorization Act) on Dec. 31, 2017, the applicability of the therapy caps to hospitals expired. Given that, there is significant therapy provider confusion on CMS instructions to add the KX modifier to medically necessary therapy claims over the cap. 

The CMS Medicare Administrative Contractors (MACs) have also provided conflicting information on websites and in recent webinars. During a Noridian webinar last Thursday there was contradictory guidance on the application of the caps to hospitals (they said “yes,” they do apply), and contradictory discussion during the presentation and in the Q&A on adding the KX modifier. Noridian indicated that it had received “over 4,000” claims with the KX modifier, but were sorting through to differentiate between clerical errors (providers not adjusting claims to reflect a new year/new cap) or if there were beneficiaries that had exceeded one of the caps. On a frustrating note, Noridian stated that it would issue an FAQ based upon the webinar questions, and it would be posted in 30 days. Seriously, 30 days?

Next Steps

In the above-mentioned call, a discussion that was likely uncomfortable (but very necessary) was held when APTA prepped participants that another government shutdown may happen. Some untenable outcomes for therapy include a continuation of the current status quo, with no regulatory relief, and a lack of clarify and instruction on claims submission with ABN and provider/beneficiary liability provisions. Worse yet, we were told that an extension of the therapy cap process might be a “patch” rather than a full repeal of the therapy cap. 

No one in the provider community wants to contemplate another year to the 20-year campaign to #StoptheCap.” Once again, the therapy community was instructed to reach out to their elected officials in support of the elimination of the therapy cap, and its inclusion (along with the Medicare extenders) in the upcoming legislation to avert another shutdown.

For now, CMS has issued guidance material on processing claims and getting paid. Providers should ensure that claims are being submitted in accordance with CMS instructions, and if contradictory information is provided elsewhere, to default to what CMS has posted on the Spotlight page.

Stay tuned to Monitor Monday, as I’ll be reporting on this every Monday until the matter is resolved.

Program Note:

Register to listen to Monitor Monday and hear Nancy Beckley continue her reporting on this developing story.

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Nancy J. Beckley, MB, MBA, CHC

Nancy Beckley is founder and president of Nancy Beckley & Associates LLC, providing compliance planning and outsourced compliance services to rehab providers in hospitals, rehab agencies, and private practices. Nancy is certified in healthcare compliance by the Healthcare Compliance Certification Board. She is on the board of the National Association of Rehabilitation Providers and Agencies. She previously served on the CMS Professional Expert Technical Panel for Comprehensive Outpatient Rehabilitation Facilities. Nancy is a familiar voice on Monitor Mondays, where she serves as a senior national correspondent.

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