Medicare Compliance & Reimbursement

As long as the therapy caps are in place, many patients will be shuffled to outpatient settings upon reaching their limit - but rehab providers must be careful how they handle the switch. The caps are likely to "spawn a whole new set of arrangements between hospitals and nursing facilities, and those arrangements unless carefully constructed could be a source of significant problems for providers," warns attorney Donna Thiel with Morgan Lewis & Bockius in Washington. Hospital outpatient departments aren't subject to the therapy caps, so many providers will be inclined to ink agreements whereby patients are transported to the hospital for treatment, Thiel predicts. Another option will be for therapists from the hospital to provide services in the skilled nursing facility. These arrangements will make the patient no longer subject to the caps, she notes. The problem is that these so-called conduit or external provider relationships are tricky to construct in such a way as to render them kosher, Thiel emphasizes. It can be done, but providers must proceed with extreme caution to ensure that all their ducks are in a row. Take the example of a hospital therapist providing services in a SNF: "If the hospital sends its own therapist into the nursing home and the hospital bills, that is technically a hospital outpatient visit and therefore wouldn't be subject to the cap," Thiel explains. However, in order for this arrangement to fly, several caveats must be met: The patient must be in a non-certified bed. The patient has to be accepted as an outpatient at the hospital. The hospital must handle all billing. The patient's original records must be retained at the hospital, not the SNF. "You can imagine the problems this creates: where the bill is coming from, where the service is being rendered, where the medical record is kept, etc.," Thiel warns. However, as long as you've structured the arrangement carefully and meet all necessary requirements, arrangements like this can be a way to manage the caps, she concludes.