Confusion in Therapy Land

There is a lot of confusion among our colleagues about how to manage a patient who is approaching the Medicare Cap or the Manual Medical Review level.  Putting aside all of the discussions about the Affordable Care Act, recent changes in ABN requirements, and other detailed discussions about compliance for just a minute, let me simplify this for all Medicare therapy providers:

If the patient has a condition that requires your skilled services under Medicare’s definition of medical necessity, you are obligated to:

  • Treat the patient
  • Bill Medicare for your skilled services
  • Substantiate the need for your services in your Plan of Care, Progress Reports, Discharge Summaries and Daily Treatment Notes.

Notice that there is nothing in the above statement discussing the Medicare Cap or Manual Medical Review, because neither of those things have anything to do with your obligations to treat the patient as a Medicare Provider.  Medically necessary PT,OT, and Speech treatment are included in the patient’s Medicare benefits. Since there is an automatic exception to the cap, medically necessary treatment should never be delayed or stopped because the patient has reached the Cap or MMR Review.

The need to substantiate medical necessity in your documentation could not be more important:

  • If, on review, Medicare finds that the clinical record does not support medical necessity the provider is liable for any over payment.
  • The rules for providing and documenting medically necessary treatment are the same, regardless of whether or not the patient has reached the cap or MMR review.

Non Medically Necessary Treatment                   

If the patient has improved to the point that continued treatment is not medically necessary, the therapist has an obligation to notify the patient and, normally, the patient should be discharged. Continued payment for treatment of a patient after your services are no longer medically necessary is no longer Medicare’s responsibility, and the charges cannot be passed to the patient unless:

  • The patient is notified in advance by a signed ABN that continued treatment no longer meets guidelines for medical necessity and further treatment will not be paid by Medicare; and
  • A GA modifier must be appended to all charges for any treatment that is not medically necessary to notify Medicare that the expectation is that the claim should be denied and that the patient has been notified that the charges are now the patient’s responsibility.

Discounting Your Services

It is equally important to understand that the patient cannot receive a discount for the same skilled services that are charged to Medicare for medically necessary treatment; except in very limited and explicit circumstances, which include:

  • when paying at the time of service
  • in cases of financial hardship.  The financial hardship must be based on a standard, established, verifiable policy

If there is not a reasonable attempt to collect payment from a patient in these circumstances, it may be considered a defacto discount.

What You Should Do Today

Don’t just take my word for it. At a minimum, you should:

  • Review these FAQs on the Therapy Cap and Use of ABNs
  • Review the Medicare Benefits Policy Manual, especially these sections:
    • Plan of Care Requirements, Section 220.1.2
    • Certification and Recertification of the Need for Treatment and Therapy Plans of Care, Section 220.1.3
    • Reasonable and Necessary Outpatient Rehabilitation Therapy Services, Section 220.2
    • Documentation Requirements for Therapy Services, Section 220.3
  • Audit your clinical documentation to make sure that your documentation supports medical necessity.
  • Have a policy and process in place for informing patients when continued care is no longer medically necessary and submitting properly completed and signed ABNs.
  • Other Clinicient blog articles are a good source of continuing information on many compliance issues.
  • Clinicient also sponsors free webinars on subjects like this.

If you still need help and advice, consider hiring a respected Compliance Expert. There are many knowledgeable experts available, and my friend and colleague Nancy Beckley is one of the best. If it prevents a compliance issue, your investment in a consultation will be the bargain of a lifetime. Nancy’s website is also a great resource and another great place to start.


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