Congress Letter to CMS Re Payment Cuts for Outpatient Physical Therapy Services
As reported in Physical Therapy Products, on August 9, Rep Earl Pomeroy (D-ND) sent a letter signed by 68 members of Congress to Donald Berwick, MD, administrator of the Centers for Medicare and Medicaid Services (CMS). The letter expresses concern over CMS’s proposal to cut payment for outpatient physical therapy, occupational therapy, and speech-language pathology services in the CY 2011 physician fee schedule proposed rule.
The letter begins, “We write to you to express our concern over the significant cuts in payment for outpatient physical therapy, occupational therapy, and speech-language pathology services proposed by the Centers for Medicare and Medicaid Services (CMS) in the CY 2011 Physician Fee Schedule Proposed Rule.”
“The rehabilitation community strongly believes that a cut of 50 percent is unwarranted and is concerned that CMS’ proposed policy is based on a flawed assumption that there is duplication of services when rehabilitation services are billed. Therapy codes are unlike most other Current Procedural Terminology (CPT) codes in that the practice expense component for a typical visit is spread out among multiple codes since multiple services are typically provided to a patient during a visit,” says the letter.
The letter requests that a detailed explanation of the methodology CMS used to calculate the new rates be provided to Congress. Pomeroy also included a request that CMS work closely with stakeholders in the rehabilitation community toward the production of a final rule that will not adversely affect access to care, particularly in rural and other underserved areas.
“Given that this represents a significant cut to a group of services in the proposed Medicare Physician Fee Schedule and given the large number of Medicare beneficiaries who rely upon these therapies, we ask that CMS provide us with a detailed justification, including an explanation of the methodology used to calculate the new rates.”
2011 Proposed Physician Fee Schedule Rule Contains Proposed Pay Cuts for Outpatient Therapy Services
As reported by APTA.org, the Centers for Medicare & Medicaid Services (CMS) issued the proposed physician fee schedule rule that would implement key provisions of the Patient Protection and Affordable Care Act of 2010 and update payment rates under the physician fee schedule for services furnished on or after January 1, 2011 (CY 2011).
If this rule becomes effective, physicians, physical therapists and other health care professionals would receive a 6.1% cut to their Medicare payments starting January 1, 2011 in addition to the 21.3% reduction that has been delayed several times already this year due to the flawed Sustainable Growth Rate (SGR) formula. This reduction was replaced with a 2.2% update until November 30, 2010, when the President signed the “Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010″ on Friday, June 25.
In addition to the projected reductions due to the SGR, CMS also proposes a multiple procedure payment reduction policy (MPPR) that would result in significant reductions in payment for outpatient therapy services. Specifically, CMS proposes to make full payment for the therapy service or unit with the highest practice expense value and payment of 50 percent of the practice expense component for the second and subsequent procedures or units of the service furnished during the same day for the same patient. The work and malpractice components of the therapy service payment would not be reduced. The proposed multiple procedure payment reduction policy would apply to both the services paid under the physician fee schedule (PFS) that are furnished in the office setting and those services paid at the PFS rates that are furnished by outpatient hospitals, home health agencies (Part B), skilled nursing facilities (Part B), comprehensive rehabilitation facilities, and other entities that are paid by Medicare for outpatient therapy services. It is estimated that if the multiple procedure payment reduction policy were implemented, payment for outpatient therapy services would be reduced by approximately 13% in addition to the projected SGR payment cut for CY 2011.
The APTA believes that CMS’s proposal to apply the multiple procedure payment reduction to outpatient therapy services is based on flawed presumptions and has no justification. The APTA states that it will aggressively work to stop implementation of the proposed MPPR policy and the SGR payment reductions.
Extension of Therapy Cap Exceptions Process
According to the Centers for Medicare & Medicaid Services (CMS), on March 23, 2010, President Obama signed into law the Patient Protection and Affordable Care Act, which extends the exceptions process for outpatient therapy caps (see Section 3103). Outpatient therapy service providers may continue to submit claims with the KX modifier, when an exception is appropriate, for services furnished on or after January 1, 2010, through December 31, 2010.
The therapy caps are determined on a calendar year basis, so all patients began a new cap year on January 1, 2010. For physical therapy and speech language pathology services combined, the limit on incurred expenses is $1,860. For occupational therapy services, the limit is $1,860. Deductible and coinsurance amounts applied to therapy services count toward the amount accrued before a cap is reached.
PT Supervision Requirements in an Outpatient Hospital Department
According to the American Physical Therapy Association (APTA), in the 2010 Outpatient Prospective Payment System (OPPS) Final Rule, issued October 30, the Centers for Medicare and Medicaid Services (CMS) confirms that physical therapy services delivered in an outpatient hospital department do not require the direct supervision of a physician.
The OPPS is the method of payment for most services delivered in an outpatient hospital department. However, physical therapy services are considered a separate benefit covered under the Medicare physician fee schedule through the Part B benefit. Therefore, they do not fall under the therapeutic services category that requires direct physician supervision under the OPPS.
New Payment Model for Anthem Blue Cross OTs in California
As reported by the Occupational Therapy Association of California (OTAC), occupational therapy practitioners within Anthem Blue Cross’ network of providers were recently notified of a planned change in Anthem Blue Cross’ payment methodology for the reimbursement of occupational therapy services in California.
This new payment model changes the current payment system to one where providers will be paid $75 per visit regardless of the treatment(s) provided or the intensity of those treatment(s).
As this change in reimbursement could prove to be financially detrimental to occupational therapy practice, the OTAC is encouraging all of its members to be a part of their grassroots advocacy effort to ensure cost-effective and quality occupational therapy services for Anthem Blue Cross clients. They have posted sample letters to use to educate executives at Anthem Blue Cross on the high value of occupational therapy services in promoting health and disability and to voice opposition to the $75 flat rate.
Four Steps to Improve Your Therapy Revenue Cycle
This article is from IMPACT, January 2009, with permission of the Private Practice Section,
APTA. For a downloadable .pdf version of the article, click here.
Four Steps to Improve Your Revenue Cycle – Independent of Billing Systems or
Claims Clearinghouses
By Jim Hammer
The threat of a 10.6 percent Medicare payment reduction captured the attention of many
therapy practices this past summer. Ultimately, the payment reduction was voted down,
but the bill had an unanticipated impact on the industry. It prompted many practices to
evaluate how they could maximize existing revenue streams and better prepare for future
financial challenges.
One innovative approach recently implemented at many therapy practices focuses on
analyzing electronic remittance advice (ERA) to reduce denials and underpayments.
Using ERA data, as opposed to data posted in the billing system or culled from the
clearinghouse, gives therapists greater insight into denial rates, by payer, as a means of
recouping reimbursement. This wise approach allows therapy practices to:
1. Pinpoint reimbursement bottlenecks
2. Benchmark findings
3. Efficiently track and work denials to recoup revenue
4. Monitor payer contract adherence
Focusing on these four key components of the revenue cycle helps practices find missing
and overlooked reimbursements, while helping them with timely and efficient collection.
Most importantly, ERA data analysis allows practices to gain an understanding of why a
payer denied a claim so they can prevent future denials. The resulting analysis gives
power back to therapists for dealing with payers, and allows them to develop the best
possible processes to ensure the full reimbursement they are allowed with the lowest cost
of collections.
The power of Web-based applications makes this type of analysis possible, even for the
smallest of practices. Subscription-based services allow practices to upload their ERA
data to a Web application, where tools are available to analyze the data. By leveraging
Web-based applications, practices do not have to hassle with licensing, implementing and
maintaining software and hardware.
Pinpointing Reimbursement Bottlenecks
Optimizing the revenue cycle depends on identifying reimbursement bottlenecks, such as
tracking the average payment delay by payer, or documenting if above-average delays
tend to result when specific procedure codes are used in claims. Identifying bottlenecks
provides therapists, billing and collection staffers with valuable information as to where
they should focus their efforts and modify processes to reduce delays. From a manager’s
desktop, numerous probes into the practice’s data offer new ways to trend and measure
bottlenecks that impact the revenue cycle, such as tracking:
• Claim summaries by reason code and/or procedure
• Denial rates by procedure
• Days sales outstanding (DSO) by procedure
• Claims summary by reason code/procedure
• Average payment lag by procedure
• Aged claims
• Patient lag by procedure
Benchmarking Findings
Much of the value in pinpointing bottlenecks is that it allows practices to benchmark their
findings for comparisons against other peer organizations locally, regionally or
nationally. Leading Web-based analytical tools will provide benchmarking data as part of
the subscription service. Benchmarking reports allow practices to get answers to
questions, such as how long does it take a practice vs. peers to get paid for specific codes,
and how often does a payer deny claims for specific procedures?
Tracking and Working Denials to Recoup Revenue
Part of the challenge for today’s therapy practices is tracking denials, rather than letting
them slip through the cracks and lose reimbursement opportunities. Web-based solutions
are available to help, and can include decision-support tools to assist with reworking
claims for resubmission. Actual customer experience shows that the average time to
rework a claim is 45 minutes and typically costs about $73. Applications that can
expedite this process immediately reduce operational costs.
Monitor Payer Contract Adherence
Each practice loses $30,000 on average per year due to underpayments. Practices that can
systematically track payer compliance have an opportunity to substantially increase
reimbursement. To accomplish this, practices can load payer-specific fee schedules into
Web-based systems to monitor payer compliance by comparing reimbursement to
contracted amounts.
The capabilities of Web-based solutions tailored for therapy-based practices continue to
advance. The best thing is, with no new software, hardware, long-term maintenance
contracts, or lengthy implementation projects, therapists can quickly drive more cash to
their bottom lines with these new tools. And, unlike relying on billing systems, these
new-generation Web-based tools are looking at payer-generated remittance files –
analyzing data that never even makes it into the billing software.
In this day of cutting costs and maximizing productivity, it pays to look at simple, Web technologies
to augment investments, instead of creating more capital expenditures. It’s
anticipated that future generations of these solutions will even be able to provide
practices with tools to determine the expected profitability of specific procedures based
on patient diagnosis. These solutions provide practices with powerful tools to avoid lost
revenue opportunities and identify processes that can be modified to support long-term
profitability.
Jim Hammer, Chief Operating Officer of Chart Links, can be reached at
jhammer@chartlinks.com
Legislation to Repeal Therapy Caps Introduced by House and Senate
According to the American Physical Therapy Association (APTA), physical therapy services for Medicare beneficiaries would no longer be limited by arbitrary financial caps under legislation introduced this month in the Senate and House of Representatives.
The Medicare Access to Rehabilitation Services Act (S 46/HR 43) introduced calls for the repeal of the Medicare therapy caps that limit coveraege of outpatient rehabilitation services to $1840 for physical therapy and speech language pathology combined and $1840 for occupational therapy services.
The therapy caps were originally adopted by Congress in the Balanced Budget Act of 1997. The caps reduce beneficiaries’ access to critical services by limiting their choice of providers by requiring them to pay 100% of the cost of care once they exceed the cap or ration their care to avoid exhausting their benefits. Since 1997, Congress has acted to prevent implementation of the caps by passing several moratoria and authorizing an exceptions process for rehabilitation services above the financial limitation based on diagnosis and clinician evaluation and judgment. An 18-month extension of the exceptions process was included in the Medicare Improvements for Patients and Providers Act (HR 6331), which passed July 15, 2008. The exceptions process is set to expire December 31, 2009.
The repeal of the therapy caps protects Medicare beneficiaries, ensuring they receive the rehabilitation services they need as they recover from serious injury or suffer from debilitating diseases.
Therapy Documentation Software Return On Investment
When it comes to automating therapy documentation, funding is one of the biggest challenges outpatient rehab facilities face.
If you’re struggling to make a compelling business case for electronic medical records to your hospital board of directors, consider all of the operational areas that will yield quantifiable results. As you build your case, marry up metrics to timeframes as a part of your formula for return on investment.
Efficiency Improvements
When you automate therapy appointments, appointment reminders, referral management, authorization tracking, evaluations, plans of care, progress notes, flow sheets, and more; information can be called up and acted on almost immediately. List out and quantify all of the administrative task time this saves. Consider improvements in communications alone as it relates to time spent on referrals, authorizations and appointment reminders. The staff productivity gained allows for major improvements in therapist work flow which, over time, allows more patients to be seen in the same amount of time.
Cost Savings
One of the greatest cost savings brought by electronic therapy documentation is the elimination of transcription costs. Because therapists enter clinical documentation directly into the system, traditional paper-based methods are greatly reduced, if not eliminated. Determine your current cost per therapist or per page for transcription. Estimate, conservatively, a reduction in transcription costs. This will likely be one of the most significant contributors to your overall cost savings with an electronic therapy documentation system. Don’t forget to consider other paper chart costs in the ROI equation:
- supplies for creating and storing charts (from folders, stickers and dividers to cabinets)
- labor expenses for managing chart pulls, filing and audits
- copying expenses for documentation to attorneys, payers and physicians
Revenue Enhancements
Electronic therapy documentation opens new doors for driving revenue that should be considered as a part of return on investment. Consider how much more compliant, complete and accurate documentation becomes when it has the checks and balances of automation. Coding levels and claim errors correlate directly to documentation of the encounter. When therapy documentation occurs electronically, therapists report greater confidence levels as it pertains to Correct Coding Initiative (CCI) Edits, Medicare time tracking (or the eight minute rule), authorization tracking, and other compliance issues that can help or inhibit proper reimbursement. Consider improvements in billing accuracy as a part of your ROI analysis.
Quality Improvements
Some of the less tangible returns of electronic therapy documentation include quality. In most cases, electronic documentation allows for quicker, more legible, better organized and more comprehensive patient documentation overall. Across the outpatient rehab facility, automation standardizes clinical documentation, reducing inconsistencies in structure, poor handwriting, and lag time in documentation and approvals. Patient education sheets are readily accessible and up to date. Plan of care reports are auto-generated from the evaluation, able to be monitored, electronically signed, and faxed from the desktop. These and many other improvements in quality should be considered in ROI.
Summary
In an outpatient setting, electronic therapy documentation impacts both the therapist and staff productivity. A good business case for return on investment should focus on
- efficiency improvements
- cost savings
- revenue enhancements
- quality improvements
If you need help putting together your Return on Investment business case for an electronic therapy documentation system, please contact us.
Chart Links at APTA PPS Booth #512
Chart Links will exhibit at the American Physical Therapy Association Private Practice Section 2008 Annual Conference and Exposition, Booth #512, in Orlando, FL on November 6-8, 2008.
Please stop by to visit John Rea and learn about our web-based reimbursement tools and/or our therapy web design services for private practices.
For a complete listing of tradeshows at which Chart Links will exhibit, please view our schedule.
Payers Getting the Best of Your Bottom Line?
The threat of a 10.6 percent Medicare payment reduction captured the attention of many therapy practices this past summer. Ultimately, the payment reduction was voted down, but the bill had an unanticipated impact on the industry. It prompted many practices to evaluate how they could maximize existing revenue streams and better prepare for future financial challenges.
One innovative approach that has been implemented at therapy practices focuses on analyzing electronic remittance advice (ERA) to reduce denials and underpayments. Using ERA data as opposed to data posted in the billing system or culled from the clearinghouse gives therapists greater insight into denial rates, by payer, as a means of recouping reimbursement.
ERA data analysis allows practices to gain an understanding of why a payer denied a claim so they can prevent future denials. The resulting analysis gives power back to therapists for dealing with payers, and allows them to develop the best possible processes to ensure the full reimbursement they are allowed with the lowest cost of collections.
Therapy Reimbursement Tool to Offer Benchmark Data for Rehabilitation
Chart Links will soon offer reimbursement tools and benchmark data to physical therapy, occupational therapy, speech-language pathology and audiology practices.
Payer claims data will be aggregated and analyzed from a Web-based suite of management reports and workflow tools that the therapist will use alongside any existing practice management or billing system.
By allowing therapists to identify and reduce denials and underpayments from electronic remittance advice, the solution will help to make therapy practices more profitable. It will also allow them to compare reimbursement data against regional and national averages.
Get more information about this Web-based tool for therapy reimbursement that will help manage denials and underpayments.
Read the press release about our partnership to provide these physical therapy reimbursement tools.