Medicare Compliance & Reimbursement

CMS rolls out two-pronged exceptions process.

Financial limitations on outpatient therapy services have been putting the reimbursement screws to providers and beneficiaries since Jan. 1--but finalizing an exceptions procedure that will help lighten the load has taken the Centers for Medicare & Medicaid Services a month and a half. Although providers, benes and advocacy groups are content for now, the battle to abolish the new outpatient therapy caps is not likely to fall off the radar any time soon.

The new exceptions process, which provides automatic coverage exceptions for certain conditions and permits manual exception requests for others, goes into effect March 13 and will be retroactive to Jan. 1. CMS outlines the new procedure in a recent fact sheet. The agency's exceptions process for "medically necessary" services is in line with stipulations in the Feb. 8 Deficit Reduction Act.

The process is "a good first step toward ensuring that Medicare beneficiaries continue to have coverage for the physical therapy they need," says American Physical Therapy Association president Ben F. Massey, Jr. in a recent statement. APTA and other advocacy groups, including the American Occupational Therapy Association, were concerned that without an adequate exceptions procedure, arbitrary application of the therapy caps would adversely affect providers' ability to receive payment for medically necessary services from benes who were unable to afford them.

The new outpatient therapy caps apply to Medicare Part B outpatient physical therapy, speech-language pathology and occupational therapy services. (The caps do not apply to outpatient hospital and hospital emergency room rehabilitation services.)

The caps originally went into effect with the Balanced Budget Act of 1997 to slow Medicare's rapidly rising costs for outpatient therapy, but a sequence of moratoriums kept the caps suspended for most of their history. The most recent moratorium expired Dec. 31, 2005, and two $1,740 caps went into effect for physical therapy services (including speech-language pathology services) and occupational therapy services beginning Jan. 1. This marks the first time outpatient therapy caps have been in effect since 2003.

Automatic Exceptions Catch And Cover Most Services

To streamline exceptions and reimbursement, CMS has compiled a comprehensive list of conditions and "clinically complex situations" that it will use to qualify benes for automatic exception to the therapy caps. Providers can use these situations to justify an exception for any condition that requires skilled therapy services.

The agency anticipates that most benes who require exceptions will qualify for the automatic exceptions process, minimizing coverage problems and preventing unnecessary costs. Neither providers nor benes will need to submit any formal documentation to obtain automatic exception approval for services that exceed the caps.

To acquire automatic exception for a specific service, a provider must be able to demonstrate that a bene has a qualifying, Medicare-eligible condition that's both [...]