How will the Medicare Outpatient Therapy Financial Cap's affect you?
Medicare clients, with significant physical impairments which require extended therapy services, are faced with the potential of serious limitations on those Therapy services because of the reactivation of financial therapy Cap's.

Financial limitations on Medicare covered therapy services (therapy caps) were originally initiated by the Balanced Budget Act of 1997 and were implemented in 1999. Over the insuing years, Congress became aware that those arbitrary Caps were unreasonable and issued a temporary moratoria on those limits for 2004 and 2005. Despite attempts to create legislative changes that would  permanently eliminate the financial Caps - the last moratoria expired at the end of 2005 and the Caps were again implemented on January 1, 2006. Congress continues to debate legislation that will hopefully eliminate the Cap permanently.

In an attempt to soften the harsh effects created by the financial Caps - Congress  issued an edict to the Center Medicare Services (CMS) to establish a process and criteria for granting exceptions to this dollar limitation - when the provision of additional therapy services is determined to be medically necessary and documented by the therapist.

For 2006, the annual combined limit on the allowed amount for outpatient physical therapy and speech-language pathology in a private office  is $1740. The Deficit Reduction Act of 2006 directs CMS to develop a process to allow for exceptions to the Caps in cases where continued therapy services are medically necessary. Certain conditions and complexities are accepted, when supported by documentation justifying the need for therapy. The documentation must indicate that the beneficiary requires therapy beyond the amount payable under the therapy cap for continued safe and effective rehabilitation of health status and/or function within a reasonable amount of time based upon unique physical Conditions and Complexities.

Park Physical Therapy’s staff is well trained in the process of assessing and requesting exceptions from the CAP for our Medicare clients who demonstrate the need for continued care. Our therapist's will secure an exception for you if you qualify!     DO NOT STOP your Physical Therapy out of FEAR! If you are in need of physical therapy and are concerned that you may be denied the extended care you deserve - feel free to contact our Practice Manager - Kathy Fulham for more details: 732-828-0700

How it works
In New Jersey The Medicare Intermediary is Empire. Empire is where all Medicare claims are sent for services rendered by recognized Health Care Providers of service. Medicare has created a “coding system” that assigns a number ( ICD-9) classification to every medical diagnosis/condition.. Each “category” of medical diagnoses also has subsections. The provider of service MUST establish which of these codes (diagnoses) are relevant for each client that receives billable health service.

In the past – there was no question on the diagnosis for a client to qualify for medical care – as long as that diagnosis was recognized by Medicare and billable with appropriate billing codes (CPT codes). . What has evolved now is that in order for a Medicare beneficiary to continue on therapy services beyond the dollar Cap. ($1740.00 combined for PT and Speech Pathology in an out patient private practice) the client must present with additional Conditions (medical diagnoses) and Complexities (medical conditions that cause a delay in physical restoration of function from the original diagnosis because of these complications.)

If a Beneficiary presents with these additional Conditions and Complexities AND they directly impact upon the course of rehabilitation – then the physical therapist may continue treating the beneficiary as long as the physical therapist can document medical necessity and progress toward restorative goals that will improve function and establish safe return to activities of living for the Beneficiary

There are TWO distinct approaches available to the therapist to intervene on behalf of the Beneficiary to continue on care beyond the financial Cap - Automatic Exception Manual Exception. The following descriptions and comments are taken directly from the Empire website:

• Automatic Exceptions.  Automatic exceptions for certain conditions or complexities are allowed without a written request.  A request to the contractor (Empire) for an exception is not required when services related to these conditions and complexities, which are described below, are appropriately provided and documented. We anticipate that the majority of beneficiaries who require services in excess of the caps will qualify for the automatic exceptions. The automatic Exception is granted up to 15 treatment sessions - for documented, medically necessary services beyond the financial Cap date.

• Manual Exceptions.   Manual exceptions require submission of a written request by the beneficiary or provider (physical therapist) and medical review by the contractor (Empire) responsible for processing the claims.  If the patient does not have a condition or complexity that allows automatic exception, but is believed to require medically necessary services exceeding the caps--the provider/supplier or beneficiary may fax a letter requesting up to 15 treatment days of service beyond the cap.  A treatment day is a day on which one or more services are provided.  The request must include certain documentation, including a justification for the request.  Contractors will make a decision on the number of treatment days they determine are medically necessary within 10 business days.  These requests for cap exceptions should be submitted prior to the date the cap is expected to be surpassed to avoid placing the beneficiary at risk of incurring the costs of treatment if the request is denied.

ICD-9-CM Codes That Qualify for the Automatic Therapy Cap Exception Process Based Upon Clinical Condition or Complexity  

According to Empire:
“The presence of a diagnosis on the code list for excepted conditions or complexity does not mean that all services for this condition or complexity are excepted from caps. Exception requires that a beneficiary be currently being treated for a condition or complexity on the list. ALSO, the severity of the condition or related therapy disorder for which that patient is treated is such that the skills of a therapist are required for services to address the medical needs above therapy caps that meet the qualifications for reasonable and necessary services. Documentation in the record must always justify the medical necessity of the services both before the cap is reached and after the cap has been reached. “

“It is very important to recognize that most of the conditions on this list would not ordinarily result in services exceeding the cap. Providers must bill for services by indicating the Exception process on the bill by using the KX modifier only in cases where the condition of the individual patient is such that services are APPROPRIATELY provided in an episode that exceeds the cap. In most cases, the severity of the condition, co morbidities, or complexities will contribute to the necessity of services exceeding the cap, and these should be documented. Routine use of the KX modifier for all patients with these conditions will likely show up on data analysis as aberrant and invite inquiry. Be sure that documentation is sufficiently detailed to support the use of the modifier.”

“The following ICD-9 codes describe the conditions (etiology or underlying medical conditions) that may result in excepted conditions and complexities (marked *) that may cause medically necessary therapy services to qualify for the automatic therapy cap exception. If a diagnosis code is not listed here, then the disorder may still qualify for an exception by approval of a Medicare contractor. These codes are grouped only to facilitate reference to them. The codes apply to all therapy disciplines, but may be used only when the code is applicable to the condition being actively treated. For example, an exception should not be claimed for a diagnosis of hip replacement when the service provided is for an unrelated dysphagia. ( and visa-versa)

When using this table, refer to the ICD-9 code book for coding instructions. Exceptions apply only to the codes listed. When two codes are listed in the left cell in a row, all the codes between them are also excepted. If one code is in the cell, only that one code is excepted. Complexities are identified in the list below with asterisks (*).

If a medical condition is not listed above – it does not mean the beneficiary will be denied an Exception to continued care. The KEY factor is in the documented NEED for specialized skilled care of a therapist and that documentation demonstrates progress toward appropriate goals.

It is the function of the therapist to essentially “fight” for the Beneficiary – to substantiate the skilled need for service.