Noridian Healthcare Solutions, LLC, as the Supplemental Medical Review Contractor (SMRC) for the CMS, has conducted post-payment review of claims for Medicare outpatient therapy services billed on dates of service from January 1, 2018 through December 31, 2018. Below are the review results:

Background

A series of Medicare laws defined payment rules for physical therapy (PT), occupational therapy (OT), and speech-language pathology (SLP). Beginning in 2015, the Medicare Access and Children’s Health Insurance Program (CHIP) Reauthorization Act (MACRA) was amended allowing providers to apply for exceptions to the PT, OT, and SLP legal limits on behalf of beneficiaries. MACRA also repealed the mandatory manual review requirement and instead required that claims submitted after a beneficiary’s claims reach a specified total in excess of the cap, be subject to targeted medical review described in the Social Security Act (SSA) §1833 (g)(5)(E). For PT, OT, and SLP furnished between October 1, 2012 and December 31, 2017, a provider could request an exception from the expense threshold, which was $3,700.

In January 2018, The Bipartisan Budget Act (BBA) of 2018 amended Section 1833(g) of the SSA by repealing the Medicare expense threshold for therapy services and creating limitations to ensure appropriate therapy services are furnished. The BBA of 2018 is applicable for PT, OT, and SLP services furnished after January 1, 2018. For calendar year 2018, the medical review (MR) threshold is $3,000 for PT and SLP services combined and $3,000 for OT services. When PT/SLP or OT services for a beneficiary exceed $3000, subsequent claims are subject to targeted medical review as described in SSA §1833(g)(5)(E).

The prior SMRC conducted a Specialty MR study to identify payments for PT, OT, and SLP services furnished by a physician, or incident to a physician’s services, that were in excess of legal limits established by MACRA. The prior SMRC found improper payments for selected claims continued to be a matter of concern.

Reason for Review

CMS tasked Noridian, as the SMRC, to perform data analysis and conduct medical review on outpatient therapy claims. Noridian completed medical review on a sample of claims related to outpatient rehabilitation services. The SMRC conducted reviews in accordance with applicable statutory, regulatory, and sub-regulatory guidance.

Common Reasons for Denial

• No Response to the Documentation Request
  • CMS Internet-Only Manuals, Publication 100-08, Medicare Program Integrity Manual, Chapter 3, Section 3.2.3.8 requires providers/suppliers to respond to requests for documentation within 45 calendar days of the additional documentation request. The documentation was not submitted or not submitted timely.
• Medical Necessity
  • The Social Security Act (SSA) Title XVIII, Section 1862(a)(1)(a) provides the guidance that, “no payment may be made under part A or part B for any expenses incurred for items or services which, are not reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member.” Claims were denied as such when submitted documentation did not support the level of complexity for skilled service.
• Certification
  • CMS Internet -Only Manuals, Publication 100-02, Medicare Benefit Policy Manual, Chapter 15, Section 220.1.3(A) provides guidance related to certification requirement of a dated physician signature on the plan of care or some other document that indicates approval of the plan of care. The common rationale for denials was missing certification or untimely certification without reason for delay.

References/Resources

• Social Security Act (SSA) Title XVIII, SectionPayment to Provider of Services
• SSA Title XVIII, Section 1833(e).Payment of Benefits
• SSA Title XVIII, Section 1833(g)(7)(A) and 1833(7)(B)(ii).Payment of Benefits
• SSA Title XVIII, Section 1833(g)(5)(E).Payment of Benefits
• SSA Title XVIII, Section 1835(2) (C, D, E).Procedure For Payment of Claims of Providers of Services
• SSA Title XVIII, Section 1861(g).Outpatient Occupational Therapy Services
• SSA Title XVIII, Section 1861(p).Outpatient Physical Therapy Services
• SSA Title XVIII, Section 1861(s)(2)(D).Medical And Other Health Services
• SSA Title XVIII, Section 1862(a)(1)(A).Reasonable and Necessary
• SSA Title XVIII, Section 1862(a)(20).Exclusions from Coverage and Medicare as Secondary Payer
• SSA Title XVIII, Section 1879(a)(1).Limitation on Liability of Beneficiary where Medicare Claims are Disallowed
• Balance Budget Act (BBA) 2018, Division E, Title II, Section 50202.Repeal of Medicare Payment Cap for Therapy Services; Limitation to Ensure Appropriate Therapy
• 42 Code of Federal Regulations (CFR) §409.17.Physical Therapy, Occupational Therapy, and Speech-Language Pathology Services
• 42 C.F.R. §409.32.Criteria for Skilled Services and the Need for Skilled Services
• 42 C.F.R. §59.Outpatient Occupational Therapy Services: Conditions
• 42 C.F.R.§410.60.Outpatient Physical Therapy Services: Conditions
• 42 C.F.R. §410.61.Plan of Treatment Requirements for Outpatient Rehabilitation Services
• 42 C.F.R. §410.62.Outpatient Speech-Language Pathology Services: Conditions and Exclusions
• 42 C.F.R. §424.24.Requirements for Medical and Other Health Services Furnished by Providers Under Medicare Part B
• CMS Internet Only Manual (IOM), Publication 100-02, Chapter 12, Section 40.2.Physical Therapy Services
• CMS IOM, Publication 100-02, Chapter 12, Section 40.3.Occupational Therapy, Services
• CMS IOM, Publication 100-02, Chapter 12, Section 40.4.Speech-Language Pathology Services
• CMS IOM, Publication 100-02, Chapter 15, Section 220.Coverage of Outpatient Rehabilitation TherapyServices (Physical Therapy, Occupational Therapy, and Speech-Language Pathology Services) Under Medical Insurance
• CMS IOM, Publication 100-02, Chapter 15, Section 230.Practice of Physical Therapy, Occupational Therapy, and Speech-Language Pathology
• CMS IOM, Publication 100-02, Chapter 16, Section 20.Services Not Reasonable and Necessary
• CMS IOM, Publication 100-02, Chapter 16, Section 110.Custodial Care
• CMS IOM, Publication 100-3, Chapter 1, Part 3, Section 170.3Speech-Language Pathology Services for the Treatment of Dysphagia.Effective October 1, 2006
• CMS IOM, Publication 100-04, Chapter 5, Section 20.HCPCS Coding Requirement
• CMS IOM, Publication 100-04, Chapter 5, Section 40.Special Claims Processing Rules for Institutional Outpatient Rehabilitation Claims
• CMS IOM, Publication 100-08, Chapter 3, Section 3.3.2.7.Review Guidelines for Therapy Services
• CMS IOM, Publication 100-08, Chapter 13, Section 13.5.4.Reasonable and Necessary Provisions in an LCD
• Local Coverage Determination (LCD) L34049Outpatient Physical and Occupational Therapy Services.Effective October 1, 2015
• LCD L33631Outpatient Physical and Occupational Therapy Services.Effective October 1, 2015
• LCD L34427Outpatient Occupational Therapy.Effective October 1, 2015
• LCD L34428Outpatient Physical Therapy.Effective October 1, 2015
• LCD L34429Outpatient Speech Language Pathology.Effective October 1, 2015
• LCD L33580Speech Language Pathology.Effective October 1, 2015
• LCD L34043Dysphagia/Swallowing Diagnosis and Therapy.Effective October 1, 2015
• LCD L34046Speech Language Pathology.Effective October 1, 2015
• LCD L35036Therapy and Rehabilitation Services (PT, OT).Effective October 1, 2015
• LCD L35070Speech – Language Pathology (SLP) Services: Communication Disorders.Effective October 1, 2015
• Local Coverage Article (LCA) A52773:Billing and Coding: Therapy Evaluation, Re-Evaluation and Formal Testing.Effective October 1, 2015
• LCA A52775:Billing and Coding: Medical Necessity of Therapy Services.Effective October 1, 2015
• LCA A52776:Billing and Coding: Therapy Students and Aides.Effective October 1, 2015
• LCA A53064: Billing and Coding: Outpatient Occupational Therapy.Effective October 1, 2015
• LCA A53065:Billing and Coding: Outpatient Physical Therapy.Effective October 1, 2015
• LCA A53304:Billing and Coding: Medical Necessity of Therapy Services.October 1, 2015
• LCA A53339:Billing and Coding: Therapy Students and Aides.Effective October 1, 2015
• LCA A54111: Billing and Coding:Speech Language Pathology (SLP) Services: Communication Disorders.Effective October 1, 2015
• LCA A57675:Billing and Coding: Dysphagia/Swallowing Diagnosis and Therapy.Effective October 1, 2015

Last Updated Feb 17, 2022