Tennessee Therapists Dish Out Dough for Putting Quantity Before Quality

A physical therapy (PT) operation in Tennessee has agreed to pay the federal government for medically unnecessary services.

Therapists have struggled with payment policies over the last three decades as legislative efforts have employed methods that “supposedly” aim to bring the cost of services down by paying for the quality, rather than quantity, of care. Lynn S. Berry, PT, CPC, said “Therapists must juggle clinical concerns with documentation burdens to meet the challenge” of reimbursement.

While most therapists are meeting these challenges, a few have bent under the pressure of lowered payments. For example, Grace Healthcare, LLC and its affiliate Grace Ancillary Services, LLC (Grace) in Chattanooga, Tenn. On March 8, the Department of Justice (DOJ) and Office of Inspector General (OIG) announced that Grace’s therapy providers agreed to pay $2.7 million, plus interest, to resolve allegations of false billing for medically unnecessary therapy services.

According to the DOJ press release:

“The settlement resolves claims that in ten nursing home facilities in which Grace provided physical, occupational, and speech therapy for periods ranging from 2007 through June of 2011, Grace pressured therapists to increase the amount of therapy provided to patients in order to meet targets for Medicare revenue that were set without regard to patients’ individual therapy needs and could only be achieved by billing for a large amount of therapy per patient.”

Don’t let this happen to you. While waiting for more positive changes in the reimbursement system, there are things therapists can do to improve the current situation.

Properly Document when Using New G Codes and Severity Modifiers

To ensure you are compliant when rendering PT services, Berry’s recommendation is to “provide an audit trail by documenting in the medical record the G codes and severity modifiers, their rationale for use, and the pertinent tests provided. After the primary impairment goal is reached, a secondary impairment may be noted and treatment continued until the goal for that impairment is met or final discharge occurs. The G codes and modifiers apply to all claims in which Medicare is the primary or secondary payer.” The G codes and severity modifiers for PT, occupational therapy, and speech-language pathology are noted in the 2013 Medicare Physician Fee Schedule (MPFS) Final Rule.

Will Payment Challenges Get Better for PTs?

There is positive action taking place on the horizon. According to Berry:

“For PT, the American Physical Therapy Association (APTA) is already working on a new payment system. Their draft of an Alternative Payment System (APS), or the Physical Therapy Classification and Payment System (PTCPS), was released to members for comment March 15, 2012. The CPT® Editorial Panel in Memphis, Tenn., Oct. 2-3, 2012, fully supported their efforts. A workgroup will be started that is open to all advisors to rewrite the Physical Medicine and Rehabilitation Section of CPT®. This is a two-part, per session payment system: One set of codes for evaluations, and another set of per-session codes for treatments. Each combines consideration of the complexity of the visit and the severity or complexity of the patient’s condition. APTA expects this system to begin Jan. 1, 2015.”

When that system goes into effect, “therapists can then move forward to provide efficient, effective care for their patients and meet the challenge of high quality care at reasonable cost,” said Berry.

For more information on capturing proper reimbursement for therapy services, read the articles “Therapy Services: The Uphill Climb to Better Codes and Reimbursement” and “PTs Rise to 2013 G code Challenge” in March 2013 Cutting Edge.

March 14th, 2013

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Therapy Services: The Uphill Climb to Better Codes and Reimbursement

By Lynn S. Berry, PT, CPC

Over the last three decades, there has been remarkable change in therapy services billing rules due to legislative efforts to bring the cost of health care down and to pay for the quality (rather than quantity) of care. Therapists must juggle clinical concerns with documentation burdens to meet the challenge.

Rules Changed Due to Costs

From 1998-2008 therapy expenditures increased 10.1 percent per year, while the number of beneficiaries receiving that therapy increased only 2.9 percent. In 2010, 7.6 million beneficiaries received outpatient services, with Medicare payments exceeding $5.6 billion. Since then, expenditures have continued to rise.

The reason for this is largely because of how physical and occupational therapists (PTs and OTs) are reimbursed. Their therapy codes include both timed codes (with multiple units) and untimed codes. Therapists use a combination of treatment codes at each visit, which could become problematic if payment is based on the number of codes billed.

First, it allows for misuse of codes. Some procedures and modalities are assigned higher relative value units (RVUs) than others, so they are paid at a higher rate. If there is insufficient documentation of the rationalization of each procedure, an incorrect, higher-value code may be used. Second, there could be incorrect calculation of timed code units due to insufficient documentation of minutes, or inclusion of independent treatment time (which is non-billable). For some, it could also include maximizing the number of treatments billed, as they are not bundled. These factors increase use of care and drive up costs.

Therapy Caps Limit Expenditures

In 1972, Medicare law first allowed payment of PTs in independent practice. In 1979, section 279 (b) of the Social Security Act (SSA) amendments put a limit on payment for services furnished by a PT in independent practice of no more than $100 of incurred expenses in a year. Continued legislative acts have increased the cap.

In 1987, OT in independent practice was recognized with a $500 cap for services per year (equal to the PT cap). The caps continued to rise until 1997, when the Balanced Budget Act expanded the cap to outpatient therapy services furnished in skilled nursing facilities (SNFs), physician’s offices, and home health agencies (Part B), in addition to PT private practice offices. Section 4541 (c) and (d) of the SSA increased the financial limitation to no more than $1,500 of the incurred expenses in a year, and included one cap imposed on PT and speech-language pathology (SLP) combined, and another cap on OT. Outpatient hospitals were exempt from the cap. There were moratoria on the caps (except for January – November 1999) until 2001, when they were finally applied.

Since then, the cap amount has increased each year, rising to $1,880 in 2012 and to $1,900 in 2013 for each cap, with any amount over the cap being denied. The services were tracked on claims through the use of modifier GP Services delivered under an outpatient physical therapy plan of care for PT, modifier GO Services delivered an outpatient occupational therapy plan of care for OT, and modifier GN Services delivered under an outpatient speech-language pathology plan of care for SLP.

Most years, Congress has enacted an automatic exception to the cap when there is documented medical necessity for exceeding it. The therapist is required to attest to medical necessity of the care by adding modifier KX Requirements specified in the medical policy have been met on the claim. The American Taxpayer Relief Act (ATRA) of 2012 reflects new legislation reinstating this automatic exception from Jan. 1, 2013 through Dec. 31, 2013; and it applies the $1,900 cap to the outpatient hospital setting.

Multiple Procedure Reductions and More

In 2011, the Medicare Physician Fee Schedule (MPFS) Final Rule brought therapists a multiple procedure payment reduction (MPPR), with a 25 percent reduction on the practice expense component of facility payments and a 20 percent reduction on the practice expense of outpatient services, if any one of the three therapies or any more than one unit is billed. This had an effect on payment of services, but not enough to reduce the skyrocketing costs. The Medicare Payment Advisory Commission (MedPac) advised Congress late in 2012 to increase the MPPR to 50 percent for all outpatient therapy settings. ATRA puts this into effect as of April 1, 2013.

Therapists also participate in the Physician Quality Reporting System (PQRS), which will start imposing penalties in 2015 if successful reporting standards are not attained. Therapists, like other providers, must add the non-payable G codes and modifiers to their claims in addition to the therapy modifiers.

The Middle Class Tax Relief and Job Creation Act of 2012 (MCTRJCA) added another caveat. From Oct. 1, 2012 to Dec. 31, 2012, hospital outpatient departments were added as subject to the cap process for claims from Jan. 1, 2012 to Dec. 31, 2012. For the three-month period, a manual review was required for any services over $3,700.This was a three-phased process, in which a therapist could apply for pre-approval of services up to 20 days at a time with a 10-day turnaround, or the claims were suspended and subject to pre-payment manual review with a 60-day turnaround. This has caused many problems for therapists, including delays in getting claims paid and some denials if documentation was judged inadequate to justify medical necessity. There were also glitches in the system and problems with each contractor having their own process for manual review. Many beneficiaries dropped their care because of fear they would have an increased financial burden.

MedPac also advised Congress to have the manual therapy review process continue for all outpatient settings. ATRA adopts this as part of the legislation from Jan. 1, 2013 to Dec. 31, 2013. Whether this will include a pre-approval process or just suspension with pre-payment manual review is not yet clear.

One more regulation from section 2005 (g) of MCTRJCA was implemented through the 2013 MPFS Final Rule: The establishment of a claims-based data collection system is designed to collect data on functional outcomes of patients through an entire episode of care (to determine whether therapy is effective), and to aid in the design of a new payment therapy system. The goal is to reduce the cost of care while increasing its quality.

New G Code Reporting Adds to Administrative Burden

The new, claims-based collections system (see companion article, “PTs Rise to 2013 G Code Challenge”) is effective Jan. 1, 2013, with implementation no later than July 1, 2013. Its goal is to establish an improved payment system based on quality care, which produces efficient (less costly) and effective (measurable) results for patients with similar conditions and functional limitations who have good potential to benefit from the treatment provided. It’s effective for all outpatient settings, including hospitals, critical access hospitals, SNFs, comprehensive outpatient rehabilitation facilities, rehabilitation agencies, and home health agencies (when the beneficiary is not under a home health plan of care). It applies to both therapists and therapy services furnished either personally by or incident-to physicians and certain non physician practitioners, including applicable nurse practitioners, certified nurse specialists, and physician assistants.

The imposition of these codes on initial claims, every 10 days, at discharge, with assessments that must be completed to determine which impairments and modifiers to apply, plus added documentation requirements, will cause great burden to all therapists in the outpatient setting.

On the Horizon

For PT, the American Physical Therapy Association (APTA) is already working on a new payment system. Their draft of an Alternative Payment System (APS), or the Physical Therapy Classification and Payment System (PTCPS), was released to members for comment March 15, 2012. The CPT^® Editorial Panel in Memphis, Tenn., Oct. 2-3, 2012, fully supported their efforts. A workgroup will be started that is open to all advisors to rewrite the Physical Medicine and Rehabilitation Section of CPT^®. This is a two-part, per session payment system: One set of codes for evaluations, and another set of per-session codes for treatments. Each combines consideration of the complexity of the visit and the severity or complexity of the patient’s condition. APTA expects this system to begin Jan. 1, 2015.

What It All Means for Therapy

At some point, we’ll have a new coding system for therapy acknowledging the complexity of evaluation and treatment options used, as well as the severity of the variety of patients encountered by the therapist, which reimburses accordingly. Therapists can then move forward to provide efficient, effective care for their patients and meet the challenge of high quality care at reasonable cost.

March 1st, 2013

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PTs Rise to 2013 G code Challenge

Follow physical therapy service requirements for new G code and modifier reporting.

By Lynn S. Berry, PT, CPC

A new, claims-based collections system implemented through the 2013 Medicare Physician Fee Schedule (MPFS) Final Rule calls for adding non-payable G codes with additional severity modifiers on each therapy claim—along with the normal charges and therapy modifiers and applicable Physician Quality Reporting System (PQRS) codes and modifiers.

Rule of Thumb for G Code Use

In the final rule, the Centers for Medicare & Medicaid Services (CMS) instructs us to use G codes and severity modifiers during:

• The initial treatment
• Defined progress periods
• Any subsequent evaluation or re-evaluation
• The end of care (or discharge)
• When reporting of the primary functional limitation has ended with further therapy required
• When reporting begins on a different or subsequent functional limitation

G codes signify the patient’s primary impairment as determined by the therapist. The therapist determines the severity by using a standard set of functional outcome measures denoted by a severity modifier added to the G codes. A G code with a severity modifier is also required for the projected outcome of the patient (the patient’s goal).

The measures for both the goal and the initial level of impairment should be noted in the patient’s plan of care; the goal and current level of impairment should be noted in progress reports no later than every 10 treatment days (a new definition of progress report time frames); and the goal and final level of impairment should be noted in the discharge note or when the goal is reached. For most claims, two G codes are required, with two exceptions:

• When therapy services are under multiple plans of care (physical therapy (PT), occupational therapy (OT), and/or speech-language pathology (SLP)) from the same therapy provider; or
• When it is a one-time visit and all three G codes (current status, goal status, and discharge status) must be reported.

Know Therapy G Codes and Severity Modifier Requirements

To provide an audit trail, the G codes and severity modifiers, their rationale for use, and the pertinent tests provided need to be documented in the medical record. After the primary impairment goal is reached, secondary impairments may be noted and treatment continued until the goal for that impairment is met or final discharge occurs. The G codes and modifiers apply to all claims in which Medicare is the primary or secondary payer. The G codes and severity modifiers for PT, OT, and SLP are noted in the final rule (and shown in Table A).

Select only one impairment as primary. If a specific category does not apply, or if using a composite functional measurement tool, select the “other” category. Each impairment category has three applicable codes.

Note: The SLP G codes are aligned with their functional reporting system, the National Outcomes Measurement System (NOMS). For SLP, the “other” category is used for any of the eight remaining NOMS categories not specified in the rule.

Table A: G codes  for 2013

Table B: Severity modifiers for reporting therapy G codes

The severity/complexity modifiers for reporting each functional G code on the claim are shown in Table B.

Here is an example of how to use G codes on a claim:

A 66-year-old patient presents at the clinic and receives a full initial evaluation, including specific impairment and functional measures testing and administration of three PQRS outcome measures: falls, body mass index, and pain level. A plan of care is developed (with specific goals based on the patient’s impairments, co-complexities, and severity) to submit to the physician for certification. Treatment is initiated as specified in the plan. Documentation is completed, and includes all of the tests and measures used and the rationale for the treatment and severity modifier chosen. G codes and modifiers are added to the documentation. The claim is filed for the patient for the date of service with the following entries:

97001 GP X1      $XX.00

97112 GP X1        XX.00

97116 GP X1        XX.00

G8978 GPCL         0.00

G8979 GPCI          0.00

1101F                   0.00

G8731                   0.00

G8417                   0.00

Note: Modifier GP Services delivered under an outpatient physical therapy plan of care (or “other therapy” modifier) must be added to the data codes because they are always therapy codes. The order does not matter when assigning the therapy or severity modifier. Therapy modifiers are not required to be added to PQRS codes. Neither modifier KX Requirements specified in the medical policy have been met nor modifier 59 Distinct procedural service can be used with these G codes. These codes are not only added for 2013, but CMS notes they will continue to require data code submission until a new payment system is developed.

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ASC Coding and Billing: Know What’s Important

By Brenda Chidester-Palmer, CPC, CPC-I, CEMC, CASCC

October 1st, 2012

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Physician Self Referrals and Compliance: What You Should Know

To keep designated health services in the clear, know Stark regulations and their exceptions.

By Julie E. Chicoine, Esq., RN, CPC

Physicians and their practices are undergoing increased government scrutiny with regard to their referrals and financial relationships for health care services. At the heart of this scrutiny lies the physician self-referral law, known as the Stark law (provided in full detail at section 1877 of the Social Security Act, and codified at 42 U.S.C. section 1395nn). As a coding professional, you should understand the basic principles of Stark law so that you are able to recognize when a possible infringement may be taking place.

Self Referrals Pose Conflict of Interest in Patient Care

Congress originally passed the Stark law in 1989 in response to a growing concern about physicians referring patients to laboratories where the physician had a financial interest. This posed a conflict of interest; Congress’ concern was that physicians who stood to benefit financially from ordering laboratory tests were likely to order more tests, including more complex tests, even when such services were unnecessary .

Following enactment, Congress expanded the Stark law’s prohibition to include additional designated health services (DHS) and extended its application to the Medicaid program. In 1997, Congress added a provision authorizing the secretary of the Department of Health & Human Services (HHS) to issue written advisory opinions concerning whether a referral relating to DHS (other than clinical laboratory services) is prohibited under the Stark law. Congress also authorized the secretary in 2003 to publish an exception to the physician self-referral prohibition for certain arrangements in which the physician receives necessary non-monetary remuneration used solely to receive and transmit electronic prescription information. They established a temporary moratorium on physician referrals to certain specialty hospitals in which the referring physician has an ownership or investment interest, as well.

The Centers for Medicare & Medicaid Services (CMS) has published a number of regulations interpreting the physician self-referral statute over the years. These rules were published in phases and are referred to as “Phase I, II, and III.” An overview of the Stark law’s regulatory history can be found on the CMS website.

Get to the Core of Stark Law

At its core, the Stark law prohibits physician referrals to entities providing certain DHS in which the physician (or his or her family member) has an ownership or compensation interest, unless an exception applies. The law further prohibits the entity from presenting, or causing to be presented, a claim to bill Medicare or Medicaid for any DHS provided pursuant to a prohibited referral. Due to this broad language, the law also establishes many exceptions.

Under Stark (42 CFR at § 411.351), physician means:

• A doctor of medicine or osteopathy
• A doctor of dental surgery or dental medicine
• A doctor of podiatric medicine
• A doctor of optometry
• A chiropractor

A referral is a request by a physician for, or ordering of, or certifying necessity for, any designated health service for which payment be made under Medicare Part B. DHS personally performed or provided by the referring physician are specifically excluded from the referral definition; however, the service is not considered to be personally performed by the referring physician if the designated health service is performed or provided by the referring physician’s employees, independent contractors, or group practice members.

DHS cover a broad range of health care items and services including:

• Clinical laboratory services
• Physical therapy services
• Occupational therapy services
• Outpatient speech-language pathology services
• Radiology and certain other imaging services
• Radiation therapy services and supplies
• Durable medical equipment (DME) and supplies
• Parenteral and enteral nutrients, equipment, and supplies
• Prosthetics, orthotics, and prosthetic devices and supplies
• Home health services
• Outpatient prescription drugs
• Inpatient and outpatient hospital services

CMS Identifies DHS Codes

Because the regulations define certain DHS by CPT® and HCPCS Level II codes, CMS maintains a list of CPT® and HCPCS Level II codes identifying those items and services included within the categories referenced above. CMS updates this list annually to correspond with CPT® and HCPCS Level II manual updates in Medicare coverage and payment policies. The updated code list is also published in the Federal Register as an addendum to the annual Physician Fee Schedule final rule, which is published annually in November with a Jan. 1 effective date for the following year.

The DHS categories defined by the code list include:

• Clinical laboratory services
• Physical therapy services, occupational therapy services, outpatient speech-language pathology services
• Radiology and certain other imaging services
• Radiation therapy services and supplies

The following DHS categories are defined without reference to the code list (42 CFR §411.351):

• DME and supplies
• Parenteral and enteral nutrients, equipment, and supplies
• Prosthetics, orthotics, and prosthetic devices and supplies
• Home health services
• Outpatient prescription drugs
• Inpatient and outpatient hospital services

Bottom Line: Stay Stark Compliant

When analyzing physician referral activity, physicians and entities must ask two questions:

• Is there a physician referral of a Medicare or Medicaid patient for the provision of a designated health service?
• Is there a financial relationship (a compensation arrangement or an ownership interest) between the referring physician (or his or her family member) and the entity that will provide the designated health service?

If the answer to both of these questions is “yes,” the referral is prohibited under Stark law unless one of the statutory exceptions applies. Stark exceptions are generally divided into three categories, including:

1. General exceptions

2. Ownership/investment interest exceptions

3. Certain compensation arrangements

Learn more about these exceptions by visiting CMS’ physician self-referral website. Stark law exceptions can be viewed in their entirety.

Seek Professional Advice on Referrals

Penalties for referrals violating the Stark law can be substantial. If a referral is made violating the Stark law and payment is received by the entity providing the designated health service, penalties can include: civil penalties up to $15,000 for each illegal referral, exclusion from participation in federal health care programs, denial of payment for services, refunding of payments received, a fine of up to $100,000 for each illegal cross-referral arrangement, and civil penalties up to $10,000 per day for failing to report violations. Physician and entity compliance with the Stark law is mandatory.

Because non-compliance with the Stark law requirements poses financial impact, physicians and entities developing arrangements that include referrals for DHS should retain legal counsel to make sure these referrals fit within one of the Stark exceptions.

Julie E. Chicoine, Esq., RN, CPC, is senior attorney for Ohio State University Medical Center. Ms. Chicoine earned her Juris Doctor degree from the University of Houston Law Center. She also holds a Bachelor of Science and a nursing degree from the University of Texas Health Sciences Center at Houston. She has written and spoken widely on health care issues, and is an active member of the AAPC community.

April 1st, 2012

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