evergreen rehab clinical & compliance bulletin 2012 q1

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2012 Quarte

Coding Corner

FAQ

1. Can I bill a re-evaluation each time I complete a progress note

or recertication?

No, a re-evaluation is not a routine, recurring service and should

not be billed or routine re-evaluations, including those done or

the purpose o completing an updated plan o care, a recertication

report, a progress report, or a physician progress report. Continuous

assessment o the patient’s progress is a component o the ongoing

therapy services, and is not payable as a reevaluation. Re-evaluations

provide additional objective inormation not included in other

documentation, such as treatment or progress notes and are ocused

on evaluation o progress toward current goals and making a

proessional judgment about continued care, modiying goals and/

or treatment, or terminating services.

Consider the ollowing points when billing or a re-evaluation:

1. Indications or a re-evaluation include new clinical ndings, a

signicant change in the patient’s condition, or ailure to respond tothe therapeutic interventions outlined in the plan o care.

2. I a patient is hospitalized during the therapy interval, a re-

evaluation may be medically necessary i there has been a signicant

change in the patient’s condition which has caused a change in

unction, long term goals, and/or treatment plan.

3. Terapy re-evaluations should contain all the applicable

components o an initial evaluation and must be completed by a

clinician.

2. Please explain the diference between CP code 97032,

attended electrical stimulation, and G0283, unattended

electrical stimulation.

Most non-wound care electrical stimulation treatment provided

in therapy should be billed as G0283, unattended electrical

stimulation, as it is oen provided in a supervised manner (aer

skilled application by the qualied proessional/auxiliary personnel)

without constant, direct contact required throughout the treatment.

Most electrical stimulation conducted via the application o

electrodes is considered unattended electrical stimulation. Example

o unattended electrical stimulation modalities include Intererentia

Current (IFC), ranscutaneous Electrical Nerve Stimulation

(ENS), cyclical muscle stimulation (Russian stimulation).

97032 is a constant attendance electrical stimulation modality that

requires direct (one-on-one) manual patient contact by the qualie

proessional/auxiliary personnel. Because the use o a constant,

direct contact electrical stimulation modality is less requent,

documentation should clearly describe the type o electricalstimulation provided, as well as the medical necessity o the constan

contact to justiy billing 97032 versus G0283. ypes o electrical

stimulation that may require constant attendance and should

be billed as 97032 when continuous presence by the qualied

proessional/auxiliary personnel is required include the ollowing

examples:

•Directmotorpointstimulationdeliveredviaaprobe

•InstructingapatientintheuseofahomeTENSunit

•FunctionalElectricalStimulation(FES)orNeuromuscular

Electrical Stimulation (NMES) while perorming a therapeutic

exerciseorfunctionalactivitymaybebilledas97032.Donotbill

or CP codes 97110, 97112, 97116 or 97530 or the same time

period.

3. How do I bill or time spent perorming education?

A common billing mistake is to bill all education under CP code

97535, sel care/home management. However, proper coding is to

use the CP code that best describes the ocus o the educational

activity. For example, i the instruction given is or exercises to

be done at home to improve ROM or strength use 97110; i

instructing the patient in balance or coordination activities at

home, use 97112; i instructing the patient on using a sock aide

or dressing, use 97535; i teaching the patient aquatic exercises to

use as a independent program in the community pool, use 97113;

i teaching tub transers, use 97530; and i instructing in a home

electrical stimulation unit, use 97032.

Clinical and Compliance Bulleti877.799.9595 | www.evergreenrehab.com



4. Can I use CP 29xxx codes rom the application o cast and

strapping section o the CP books when I apply an orthotic?

According to CP Assistant-February 2007, orthosis application

diers rom the purpose o an application o a cast or strapping

device. Casting and strapping codes should be used when

temporary immobilization/xation is required until there is urthertreatment disposition and should not be reported or orthotics

tting and training. Instead, 97760 and/or 97762 should be used or

orthotic tting and training perormed by therapists.

5. Is there a CP code I can use to bill or perorming a inetti or

other balance test?

CP code 97750, physical perormance testing, may be reasonable

and necessary or patients with neurological, musculoskeletal, or

pulmonary conditions. Examples o physical perormance tests

or measurements include isokinetic testing, Functional Capacity Evaluation (FCE), 6 minute walk test, and inetti or other balance

tests. Tere must be written evidence documenting the problem

requiring the test, the specic test perormed, and a separate

measurement report. CP code 97750 is not covered on the same

day as CP codes 97001-97004 (due to CCI edits).

Decoding CPT Codes

Each quarter we ocus on decoding the mystery o a specic

CP code.

Tis quarter we will ocus on CP code CP 97110 -

Terapeutic exercises.

I an exercise is taught to a patient and perormed or the purpose o

restoring unctional strength, range o motion, endurance training,

and exibility, CP code (97110) is the appropriate code. I the

ocus is not strength, range o motion, endurance or exibility then

it is likely that a dierent CP code is more appropriate.

Terapeutic exercises are used or the purpose o restoring strength,

endurance, range o motion and exibility where loss or restriction

is a result o a specic disease or injury and has resulted in a

functionallimitation.Documentationshouldincludemeasurable

indicators to support the medical necessity o therapeutic exercise

such as unctional loss o joint motion or muscle strength, but also

inormation on the impact o these limitations on the patient’s lie

and how improvement in one or more o these measures leads to

improved unction.

Many therapeutic exercises require the unique skills o a therapist to

evaluate the patient’s abilities, design the program, and instruct the

patient or caregiver in sae completion o the special technique. Ho

aer the teaching has been successully completed, repetition o the

exercise, and monitoring or the completion o the task, in the absen

additional skilled care, is non-covered.

Repetitive type exercises oen can be taught to the patient or a careas part o a sel-management, caregiver or nursing program. For

example,NGS’LCD26884OutpatientPhysicalandOccupational

Terapy Services states that “or many patients a passive-only exerc

program should not be used more than 2-4 visits to develop and tra

the patient or caregiver in perorming PROM.” Exercises to promot

overall tness, exibility, endurance (in absence o a complicated pa

condition), aerobic conditioning, weight reduction, and maintenan

exercises to maintain range o motion and/or strength are non-cove

In addition, exercises that do not require, or no longer require, the

skilled assessment and intervention o a qualied proessional/auxi

personnel are non-covered.

NGS’LCD26884OutpatientPhysicalandOccupationalerapy

Services provides the ollowing example o when a service that is in

skilled becomes non-skilled: “as part o the initial therapy program

ollowing total knee arthroplasty (KA), a patient may start a sessio

on the exercise bike to begin gentle range o motion activity. Initiall

patient requires skilled progression in the program rom pedal-rock

building to ull revolutions, perhaps assessing and varying the seat h

and resistance along the way. Once the patient is able to saely exerc

the bike, no longer requiring requent assessment and progression,

i set up is required, the bike now becomes an “independent” progr

and is no longer covered by Medicare. While the qualied proessio

auxiliary personnel may still require the patient to “warm up” on th

prior to other therapeutic interventions, it is considered a non-skill

unbillable service and should not be included in the total timed cod

treatment minutes.”

Supportive Documentation Recommendations or 97110:

•Objectivemeasurementsoflossofstrengthandrangeofmotion

comparison to the uninvolved side) and eect on unction

> PtwillincreaserightankleDFROMfrom-5degreesto15

degrees to normalize gait terminal stance and decrease early h

o and decrease excessive hip exion compensation during sw

leg advancement

> Patient will increase le hip abduction strength rom 2/5 to

4/5 to prevent right pelvis drop during right swing phase



•Ifusedforpainincludepainrating,locationofpain,eectofpain

on unction

•Analysisofsubstitutions

> AROM rt. Shoulder. Verbal and manual cuing during right

shoulder exion and abduction to correct shoulder elevation/

hiking substitution

•Progressions/Downgrades

> Progressed patient rom supine hip abduction to sidelying hip

abduction with knee bent to decrease lever arm. Will progress

to straight knee as strength improves.

•Techniquesusedtoensureproperperformance

> LE progressive resistive exercises. Focus on sidelying hip

abduction perormed with manual resistance to hip extension

during abduction to decrease hip exor substitution pattern

and increase hip abduction strength•InstructioninHEPorcaregivers

•Emphasizewhytherapistwasimportantintherapeuticexercise

> May include skilled cardiopulmonary monitoring including

documentation o pulse oximetry, heart rate, blood pressure,

perceived exertion, etc.

Keeping Straight on the Regulation Road:CMS Continues to Release Clarications on the Fiscal

Year (FY) 2011 Final Rule or Skilled Nursing Facility(SNF) Prospective Payment System (PPS) Changes That

Were Efective October 1, 2011

Signicant changes were proposed or the Skilled Nursing Facility

Prospective Payment System (SNF PPS) in FY 2012 in the Proposed

Rule issued by the Centers or Medicare & Medicaid Services

(CMS) in April. CMS issued the Final Rule on July 29, 2011 which

essentially implemented all o the signicant changes that had been

proposed. CMS continues to provide education and clarications

to providers on the October 1, 2011 changes. FAQs and CMS

clarications on the Fiscal Year (FY) 2012 Final Rule or Skilled

Nursing Facility (SNF) Prospective Payment System (PPS) Changes

are detailed below:

General Clarications:

FAQ:

1. Please clariy the use o the term “day o discharge”

Answer: (rom CMS Follow-up inormation rom November 3

provider training call) Te term “day o discharge” can serve two

distinct purposes. Te day o discharge may reer to the day the r

leavesthefacility,asdiscussedinChapter2oftheMDSRAIma

andascapturedwithinItemA2000ontheMDS.“Dayofdischa

may also reer to the resident’s discharge rom Medicare Part A,

iscapturedinItemA2400ContheMDS.AsnotedinChapter2

MDSRAImanual,itispossiblethatthesetwodates,thatisthedacility discharge and the date o Part A discharge, may not be th

such as in cases where a resident uses all o his or her 100 entitled

benet days but remains in the acility or some time aer that p

It is also possible that the dates listed in A2000 and A2400C may

the same, such as in cases where the resident leaves the acility pr

exhausting their SNF benet or i the resident were to expire dur

course o the stay. Whether or not these two dates overlap is imp

to understanding the potential billing impact associated with the

dates.

As noted in Chapter 3 o the Medicare Benet Policy Manual, th

date o discharge rom the acility is a Medicare non-billable day.

Tereore, in cases where A2000 (discharge rom acility) and A

(last day o Medicare Part A stay) are the same, then the last day

Medicare stay (A2400C) is a Medicare non-billable day. In cases

the resident remains in the acility aer exhausting the ull Medi

benet, then the last day o the Medicare stay, which in this case

mean that A2400C would be equivalent to 100th day o the bene

would be a Medicare billable day.

Change o Terapy (CO) OMRA

Te Centers or Medicare and Medicaid Services (CMS) clarie

the November 3rd, 2011 national provider call both verbally and

theirhandout(slide23)that“IftheARDofaScheduledPPSM

isONorBEFOREtheARDoftheCOT;noCOTisrequiredbu

is allowed.” Te RAI manual only states that the Scheduled PPS

MDSARDneedstobe“before”theARDofCOTforaCOTto

be required. However, CMS clarication stated “on or beore.” It

important to note that the CO is “allowed” per CMS, so provid

shouldevaluatewhetherornottocombinethescheduledMDS

with the CO OMRA and i the RUG increases, it may prove to

benecialtocombinethescheduledMDSandCOTOMRA.H

two examples that illustrate this clarication:

1. 5 day assessment is completed on day 8 resulting in an RH. T

dayassessmentiscompletedonday15resultinginanRU.Day7

COTobservationperiodisalsoday15whichfallsontheARDo

scheduled PPS assessment so the CO is not required but is allo

this scenario, it would benet the acility to combine the CO w

14 day so that the RU RUG can be billed retroactively beginning



Day 8 9 10 11 12 13 14 15 16

5 day 14 day assessment assessment

+ CO

P 30 45 40 50 50 45

O 30 50 50 50 50 50

S 60 45 45 45 50

RUG 5 day RH RH RH RH RH RH RH RU

RUG rom CO RH RU RU RU RU RU RU RU RU

2. 5 day assessment is completed on day 6 resulting in an RU. Te 14 day assessment is completed on day 13 and results in an RH or

paymentdays15-30.Day7oftheCOTobservationperiodisalsoday13whichfallsontheARDofthescheduledPPSassessmentsoth

CO is not required but is allowed. In this scenario the CO is not required as the scheduled PPS assessment was completed on day 7 o

CO. Te RH does not begin until day 15.

Day 6 7 8 9 10 11 12 13- 14 15

5 day 14 day assessment assessment

P 60 35 35 30 35 35O 60 30 30 30 35 30

RUG 5 day RU RU RU RU RU RU RU RU RU RH

FAQ

1.Please clariy the relationship between the CO OMRA and

the day o discharge


provider training call) Te term “day o discharge” can serve two

distinct purposes. Te day o discharge may reer to the day the

residentleavesthefacility,asdiscussedinChapter2oftheMDS

RAImanualandascapturedwithinItemA2000ontheMDS.

“Dayofdischarge”mayalsorefertotheresident’sdischargefrom

MedicarePartA,whichiscapturedinItemA2400ContheMDS.

AsnotedinChapter2oftheMDSRAImanual,itispossiblethat

these two dates, that is the date o acility discharge and the date

o Part A discharge, may not be the same, such as in cases where

a resident uses all o his or her 100 entitled SNF benet days but

remains in the acility or some time aer that point. It is also po

that the dates listed in A2000 and A2400C may be the same, suc

cases where the resident leaves the acility prior to exhausting th

benet or i the resident were to expire during the course o the s

Whether or not these two dates overlap is important to understathe potential billing impact associated with these dates.

In cases where the resident is discharged rom the acility on or p

toDay7oftheCOTobservationperiod,thennoCOTOMRA

required. More precisely, in cases where the date coded or Item

isonorpriortoDay7oftheCOTobservationperiod,thenno

OMRA is required. Facilities may choose to combine the CO O

with the discharge assessment under the rules outlined or such

combinationinChapter2oftheMDSRAImanual.



In cases where the last day o the Medicare Part A benet, that is

thedateusedtocodeA2400ContheMDS,ispriortoDay7ofthe

CO observation period, then no CO OMRA is required. I the

datelistedinA2400CisonoraerDay7oftheCOTobservation

period, then a CO OMRA would be required i all other

conditions are met.

Is the day o d/c rom the acility

(A2000) day 7 or prior to day 7

o the CO observation period?

No CO Req’d

Is the last day o Part A

(A2400C) prior to day 7 o the

CO observation period?

No CO Req’d CO Req’d

Yes No

No

Yes

Yes

Is patient discharged rom

the acility?

Finally, in cases where the date used to code A2400C is equa

date used to code A2000, that is cases where the discharge r

Medicare Part A is the same day as the discharge rom the a

andthisdateisonorpriortoDay7oftheCOTobservation

then no CO OMRA is required. Facilities may choose to c

the CO OMRA with the discharge assessment under the r

outlinedforsuchcombinationinChapter2oftheMDS

RAI manual.



2. When does the rst CO observation period begin?


provider training call) As noted in the FY 2012 SNF PPS proposed

andnalrules,theARDforaCOTOMRAistobeset7days

followingtheARDsetforthemostrecentPPSassessmentused

forpayment.Additionally,asnotedinSection2.9oftheMDS

RAImanual,theARDforaCOTOMRAmaynotprecedethe

ARDoftherstscheduledorunscheduledPPSassessmentof

the Medicare stay used to establish the patient’s current RUG-IV

therapy classication. As such, i an assessment does not yet exist or

a resident which includes sufcient therapy to classiy the resident

or a therapy RUG, regardless o the RUG used or billing in the

case o index maximization, then acilities may not complete a

CO OMRA or this resident. Te practical implication o this is

that a CO OMRA may not be used as the rst assessment that

would classiy a resident into a RUG-IV therapy group. Tis initial

classication must be done using one o the regularly scheduled

assessments or by completing a Start o Terapy OMRA.

3. Is a CO OMRA necessary when a resident misses 3

consecutive days o therapy and Day 7 o the CO observation

period alls on one o the 3 missed days. For example, a resident

misses therapy Days 36-38 and Day 7 o the CO observation

period is Day 37.

Answer: (From CMS Follow-up inormation rom August 23providertrainingcallandSeptember1OpenDoorForum)Incases

as described above, the necessity o a CO OMRA will depend on

whatdayisusedfortheARDoftheEOTOMRA.Inthisexample,

iftheARDoftheEOTOMRAissetforeitherDay36orDay37,

thenaCOTOMRAwouldnotbenecessary.IftheARDoftheEOT

OMRAissetforDay38,then,inadditiontotheEOTOMRA,the

CO OMRA would need to be completed, assuming there has been

a sufcient change in the intensity o therapy.

End-o-Therapy (EOT) OMRA

FAQ

1. I a patient does not receive therapy or three consecutive days

during the ARD window or the 5 day scheduled PPS assessment

is an EO OMRA required?


provider training call) For residents who do not receive therapy or

threeconsecutivecalendardaysduringtheallowableARDwindow

or the 5-day scheduled PPS assessment, acilities are not required to

adjustthedateoftheARDforthe5-dayassessmentortocombine

the 5-day assessment with an EO OMRA.

2. Is the EO OMRA necessary or patients who miss three

days consecutive days o therapy who are not classied into a

Rehabilitation or Rehabilitation plus Extensive Services

RUG category?


providertrainingcall)InaccordancewiththeMDSRAImanu

EO OMRA is necessary in cases where a resident classied in

Rehabilitation or Rehabilitation plus Extensive Services RUG c

and does not receive any therapy services or three or more con

calendar days. As such, an EO OMRA is not necessary or res

who have not yet been classied into such a RUG category on a

scheduled or unscheduled PPS assessment

3. Please clariy the relationship between the End o Terapy

and the Day o Discharge


provider training call) In cases where a resident classied into a

Rehabilitation or Rehabilitation plus Extensive Services RUG c

and does not receive any therapy services or three or more con

calendar days and the resident is discharged rom the acility on

third day o missed therapy services, then no EO OMRA is re

More precisely, in cases where the date coded or Item A2000 is

third consecutive day o missed therapy services, then no EO

is required. Facilities may choose to combine the EO OMRA

discharge assessment under the rules outlined or such combinChapter2oftheMDSRAImanual.

In cases where the last day o the Medicare Part A benet, that i

dateusedtocodeA2400ContheMDS,ispriortothethirdco

day o missed therapy services, then no EO OMRA is require

date listed in A2400C is on or aer the third consecutive day o

therapy services, then an EO OMRA would be required.

Finally, in cases where the date used to code A2400C is equal to

used to code A2000, that is cases where the discharge rom Me

Part A is the same day as the discharge rom the acility, and thi

is on or prior to third consecutive day o missed therapy service

no EO OMRA is required. Facilities may choose to combine t

OMRA with the discharge assessment under the rules outlined

combinationinChapter2oftheMDSRAImanual.



Leave o Absence

FAQ:

1. Please clariy the efect o Leave o Absence (LOA) days on

scheduled PPS assessments.

Answer: (From CMS Follow-up inormation rom August 23

providertrainingcallandSeptember1OpenDoorForum)

For scheduled assessments, pursuant to the policy outlined in

Chapter 2, page 2-64, o the MDS 3.0 RAI Manual, the Medicare

assessment schedule is adjusted to exclude the LOA when

determining the appropriate ARD or a given assessment. For

example, i a resident leaves a SNF at 6:00pm on Wednesday, which

isDay27oftheresident’sstayandreturnstotheSNFonursday

at 9:00am, then Wednesday becomes a non-billable day and

ursdaybecomesDay27oftheresident’sstay.erefore,afacility

thatwouldchooseDay27fortheARDoftheir30-dayassessment

wouldselectursdayastheARDdateratherthanWednesday,as

Wednesday is no longer a billable Medicare Part A day.

2. Please clariy the efect o Leave o Absence (LOA) days on

unscheduled PPS assessments.

Answer: (From CMS Follow-up inormation rom August 23

trainingcallandSeptember1OpenDoorForum)For unsched

PPS assessments, the ARD o the relevant assessment is not af

the LOA because the ARDs or unscheduled assessments are n

directly to the Medicare assessment calendar or to a particular

the resident’s stay.

EO example:

An EO OMRA must be perormed i a resident does not rece

therapy or three consecutive calendar days, which may include

days during which the resident experienced a LOA. For examp

a resident were to miss therapy on Monday and uesday, go to

emergency room at 9:00pm on Wednesday, return to the acilit

Tursday at 10:00am and receive therapy on Tursday, then an

OMRAwouldberequiredwithanARDsetforMonday,Tuesda

Wednesday.

Is the date the patient leaves

the acility (A2000) the third

consecutive day o missed therapy?

No EO Req’d

Is the date o d/c rom Part A

(A2400C) prior to the third

consecutive day o missed therapy?

No EO Req’d EO Req’d

Yes No

No

Yes

Yes

Is patient discharged rom

the acility?



With regard to payment, the EO OMRA would control payment

or those Medicare-billable days during which the resident did

not receive therapy while those non-Medicare billable days would

remain non-billable to Medicare. We would note that, in the

example above, the provider could complete the Resumption o

Terapy items to resume therapy aer the patient’s return, assuming

the resumption was completed consistent with existing policies

governing the denition o a resumption o therapy.

CO example:

InthecaseofaCOTOMRA,Day7oftheCOTobservationperiod

occurs7daysfollowingtheARDofthemostrecentPPSassessment

used or payment, regardless i a LOA occurs at any point during the

COTobservationperiod.Forexample,iftheARDforaresident’s

30-day assessment were set or November 7 and the resident went

to the emergency room at 11:00pm on November 9, returning at

2:00pmonNovember10,Day7oftheCOTobservationperiod

would remain November 14.

With regard to payment, consistent with current policies related to

the CO OMRA, the CO OMRA would set payment or those

MedicarebillabledaysbeginningonDay1oftheCOTobservation

period and orward until the next scheduled or unscheduled

assessment. Any days during which the resident was out on the

LOA would remain non-billable to Medicare.

CMS released Calendar Year 2012 Final Rule or thePhysician Fee Schedule on November 1, 2011

On November 1st, 2011, the Centers or Medicare & Medicaid

Services (CMS) issued a nal rule that will update payment policies

and rates or physicians and nonphysician practitioners (NPPs) or

services paid under the Medicare Physician Fee Schedule (MPFS) in

calendar year (CY) 2012. Tis is the same ee schedule used to pay

or Part B therapies in outpatient and nursing acilities. Highlights

o provisions in the nal rule or the physician ee schedule that will

impact therapy are discussed below.

CY 2012 payment rates ace a 27.4% reduction

CMS announced in the nal rule the physician ee schedule

update or CY 2012 is projected to be negative 27.4 percent. Tis

is slightly less than the 29.5 percent cut that CMS estimated in the

proposed rule because the Medicare cost growth has been lower

than expected. Over the last ew years Congress has taken action to

avertthesecutspriortotheireectivedate.OnDecember23,2011,

HR 3765 Te emporary Payroll ax Cut Continuation Act o 2011

was signed into law which averts the 27.4% cut to the physician

schedule until February 29, 2012. I Congress does not interven

to February 29, 2012, the Medicare payment rates will be reduc

percent beginning March 1, 2012.

Terapy Cap Limitations

Te dollar amount o the therapy cap in CY 2012 will be $1880

Congressional action is necessary to extend the exceptions proc

OnDecember23,2011,HR3765eTemporaryPayrollTaxC

Continuation Act o 2011 was signed into law which extends th

exception process until February 29, 2012. I Congress does no

intervene prior to February 29, 2012, the cap exception process

longer be in eect beginning March 1, 2012.

Multiple Procedure Payment Reduction (MPPR)

No revisions were made to CMS’s policy regarding application

MPPR to outpatient therapy services. MPPR is a reduction to t

practice expense portion o the payment or a therapy procedu

more than one unit or procedure is provided to the same patien

the same date o service. Te MPPR o 25% or services urnish

in an institutional setting and 20% or services urnished in a n

institutional setting remains unchanged.

CGS J15 MAC LCDs Issued

Eective October 17, 2011 Medicare Part A Ohio and Kentuck

workloads transitioned rom NGS to CGS, the J15 MAC (Med

Administrative Contractor). CGS has issued Local Coverage

Determinations(LCDs)thatimpactthedeliveryoftherapyser

ListedbelowistheinformationontheLCDsthatcontaindetai

diagnosis(ICD-9)codesthatsupportmedicalnecessity:

LCD Codes that SupportMedical Necessity

LocalCoverageDetermination

(LCD)forSwallowEvaluation

andDysphagiaTreatment

(L31905)LocalCoverageDetermination

(LCD)forSpeech-Language

Pathology (L31899)

438.82, 464.01, 464.51, 478.3

478.34, 478.6, 507.0, 787.20

787.29

307.0, 315.00-315.02, 315.09

315.2, 315.31, 315.32, 315.34

315.39, 315.5, 315.8, 352.1-3

389.00, 389.01-389.06, 389.0

389.18, 389.20- 389.22, 438.0

438.14, 438.19, 438.6, 438.83

478.34, 478.5, 784.3, 784.40-

784.51, 784.52, 784.59, 784.6

996.79, V40.1, V41.2, V41.3

V43.81, V52.8, V72.83



2012 Therapy Cap Limitations

Te Balanced Budget Act o 1997, P.L. 105-33, Section 4541(c)

set annual caps or Part B Medicare therapy patients. Tese limits

change annually. Terapy caps or 2012 will be $1880 or physical

therapy and speech therapy combined and $1880 or occupational

therapy.

Therapy Cap Exceptions Process Expires Feb. 29, 2012Unless Congress Acts

Section 4541(a)(2) o the Balanced Budget Act (BBA) (P.L.

105-33) o 1997, which added §1834(k)(5) to the Act, required

payment under a prospective payment system (PPS) or outpatient

rehabilitation services (except those urnished by or under

arrangements with a hospital). Section 4541(c) o the BBA required

application o nancial limitations to all outpatient rehabilitation

services (except those urnished by or under arrangements witha hospital).

Since the creation o therapy caps, Congress has enacted several

moratoria.eDecitReductionActof2005directedCMSto

develop exceptions to therapy caps or calendar year 2006 and the

exceptions have been extended periodically. Exceptions to caps

based on the medical necessity o the service are in eect only when

Congress legislates the exceptions. In 2006, the Exception Processes

ell into two categories, Automatic Process Exceptions, and Manual

Process Exceptions. Beginning January 1, 2007, there is no manualprocess or exceptions. All services that require exceptions to caps

shall be processed using the automatic process. All requests or

exception are in the orm o a KX modier added to claim lines.

Te KX modier is added to claim lines to indicate that the clinician

attests that services are medically necessary and justication is

documented in the medical record.

OnDecember23,2011,HR3765eTemporaryPayrollTaxCut

Continuation Act o 2011 was signed into law which extends the

exception process until February 29, 2012. Te automatic processor exceptions will expire on February 29, 2012 i congress does

not act to extend the exception process. Tis will result in Medicare

Part B therapy patients being limited to a cap o $1880 or physical

therapy and speech therapy combined and $1880 or occupational

therapy in 2012.

2012 Medicare Copays and Deductibles

CMS released inormation on the copays and deductibles or

Medicare Part A and Part B services in 2012. Te Part A deduc

paid by a beneciary when admitted as a hospital inpatient will

be $1,156 in 2011, an increase o $24 rom this year’s $1,132

deductible. Te Part A deductible is the beneciary’s cost or uto 60 days o Medicare-covered inpatient hospital care in a bene

period. Beneciaries must pay an additional $289 per day or d

61 through 90 in 2012, and $578 per day or hospital stays beyo

the 90th day in a benet period. For beneciaries in skilled nur

acilities, the daily co-insurance or days 21 through 100 in a be

period will be $144.50 in 2012, compared to $141.50 in 2011. In

2012, the Part B deductible will be $140, a decrease o $22 rom

2011 and the Part B copay will remain 20%.

Wisconsin Physicians Service Insurance Corporation(WPS) Awarded the Jurisdiction 8 A/B MAC Contract

On September 30, 2011 CMS announced that Wisconsin Phys

Service Insurance Corporation (WPS) was awarded the Jurisdi

8 A/B MAC contract or the administration o the Part A and

Part B Medicare ee-or-service claims in the states o Indiana a

Michigan. WPS is the incumbent or the Part B Carrier contrac

in Michigan. Over the next several months, CMS will oversee t

transer o the Part A workload or Indiana and Michigan and P

B workload or Indiana rom the incumbent contractor, Nation

Government Services Inc. (NGS), to WPS.

National Government Services Inc. (NGS) Awarded t Jurisdiction 6 A/B MAC Contract

On September 30, 2011 CMS announced that National

Government Services, Inc. (NGS) was awarded the Jurisdiction

6 A/B MAC contract or the administration o the Part A and

Part B Medicare ee-or-service claims in the states o Illinois,

Minnesota, and Wisconsin. NGS is the incumbent or the Part

A Fiscal Intermediary contracts in Illinois and Wisconsin. Ove

the next several months, CMS will oversee the transer o thePart B workload or Illinois, Minnesota, and Wisconsin rom th

incumbent, Wisconsin Physicians Service Insurance Corporati

(WPS), and the part A workload or Minnesota rom the

incumbent, Noridian Administrative Services (NAS), to NGS.



Zone Program Integrity Contractor (ZPIC) Zones 3 and 6Awarded to Cahaba Saeguard Administrators

eMedicarePrescriptionDrugImprovementandModernization

Act o 2003 called or CMS to realign the Program Saeguard

Contractors (PSCs) into seven jurisdictions and be renamed

Zone Program Integrity Contractors (ZPICs). Te intent o thesealignments is to have each ZPIC be responsible or the detection,

deterrence and prevention o raud, waste, and abuse across all

claim types in their jurisdiction. ZPICs detect, investigate and gather

evidence o suspected raud and abuse to be turned over to the

Ofce o Inspector General (OIG) or criminal or civil prosecution.

Tese cases may result in prison sentences, monetary penalties, or

certain orms o administrative sanction.

CMS announced that the remaining two ZPICs (#3 and #6)

have been awarded to Cahaba Saeguard Administrators, LLC.Zone 3 consists o the states o Minnesota, Wisconsin, Illinois,

Indiana, Michigan, Ohio and Kentucky. Zone 6 consists o the

statesofPennsylvania,NewYork,Maryland,DistrictofColumbia,

Delaware,Maine,Massachusetts,NewJersey,Connecticut,Rhode

Island, New Hampshire, and Vermont.

Recovery Audit Contractor (RAC) Program DemandLetters to be Issued by Medicare AdministrativeContractor (MAC) Beginning January 3, 2012

As o January 3, 2012, the Centers or Medicare & Medicaid Services(CMS) is transerring the responsibility or issuing Recovery Audit

Contractor (RAC) demand letters to providers rom its Recovery

Auditors to its claims processing contractors. Tis change was made

to avoid any delays in demand letter issuance. As a result, when a

RAC nds that improper payments have been made to a provider,

they will submit claim adjustments to the provider’s Medicare

(claims processing) contractor. Te Medicare contractor will then

establish receivables and issue automated demand letters or any

RAC identied overpayment. Te Medicare contractor will ollow

the same process as is used to recover any other overpayment romproviders.

Te Medicare contractor will then be responsible or elding any

administrative concerns providers may have such as timerames or

payment recovery and the appeals process. However, the Medicare

contractor will include the name o the initiating RAC and his/her

contact inormation in the related demand letter. Providers should

continue to contact the RAC or any audit specic questions, such as

their rationale or identiying the potential improper payment.

All Eyes on TherapyTerapy remains the ocus o many Medicare Administrative

Contractors (MACs)/Fiscal Intermediaries (FIs) as well as the

Regulatory and Law Enorcement Agencies o the Federal

Government as the commitment to deterring raud, waste and

abuse in the Medicare and Medicaid systems has increased.

Obama Administration Announced Recovery o Ove

$5.6 billion in Fraudulent Payments in Fiscal Year 20

OnDecember13,2011,theObamaAdministrationannounce

recovery o over $5.6 billion in raudulent payments in scal

year 2011, a 167 percent increase rom 2008. O the $5.6 billion

recoveredbyDOJin2011,over$2.9billionwasinhealthcare

alone. Tis was driven in part by expansion o the Medicare Fr

Strike Forces, specialized teams o agents and prosecutors who

on catching health care raud. At the start o the Administrationthere were two Strike Force teams. Now, there are Strike Force t

in nine dierent cities. In 2008, they brought cases involving $3

million in raudulent claims. Tis year, they brought cases invo

over $1 billion in raudulent claims. For every dollar spent on t

eort, the Administration has recovered seven dollars.

RAC Programs Expand to Medicaid January 1, 2012

CMS has issued a nal rule implementing the Medicaid Recov

Audit Contractor program eective January 1, 2012. CMS

published the proposed rule last November, and set April 1, 20

as the date by which states had to implement their Medicaid RA

programs. However, in February CMS delayed the implement

date to allow states more time to set up their programs. Te

Medicaid RAC program beginning January 1, 2012 is based on

the Medicare Recovery Audit Contractor program, which has

recovered nearly $670 million and counting in 2011 – increasin

taxpayer dollars recovered by nearly 800 percent compared to 2

Te Medicaid RAC program is intended to identiy overpayme

and underpayments within each state’s Medicaid program, and

recover all overpayments. CMS expects to see savings o $2.1 b

during the next ve years, o which $900 million will be returne

states. Provisions in the nal rule include the ollowing:



• Statesmustreferanysuspectedfraudorabusetolocallaw

enorcement or the appropriate Medicaid Fraud Control Unit

(MFCU).

• RequirestatestocoordinateMedicaidRACoperationswith

other auditing organizations operating within the state.

• RequiretheMedicaidRACtohireatleastonefull-time medical director.

• SetlimitsonthenumberofmedicalrecordsaMedicaidRAC

can review.

• RequireMedicaidRACstoworkwiththestatetocreate

education and outreach programs.

• ProhibitMedicaidRACsfromreviewingclaimsolderthanthree

years, unless granted an exemption rom the state.

• RequireMedicaidRACstoreturntheircontingencyfeeifany

overpayment determination is reversed during theappeals process.

• EnsurethatMedicaidRACsdonotauditclaimsthathave

already been audited, or are currently being audited by

another organization.

CMS Announces New Demonstrations to Help CurbImproper Medicare, Medicaid Payments

In 2010, the President announced three goals or cutting improper

payments by 2012: reducing overall payment errors by $50

billion, cutting the Medicare ee-or-service error rate in hal, and

recovering $2 billion in improper payments. o help achieve these

goals, the Centers or Medicare & Medicaid Services (CMS) has

announced it will launch demonstration programs beginning in

January 2012 targeting some o the most common actors that lead

to improper payments.

Recovery Audit Prepayment Review January 1, 2012-

December31,2014

Te Recovery Audit Prepayment Review demonstration will allowMedicare Recovery Auditors (RACs) to review claims beore they

are paid to ensure that the provider complied with all Medicare

payment rules. Te RACs will conduct prepayment reviews

on certain types o claims that historically result in high rates o

improper payments. Tese reviews will ocus on seven HEA

states with high populations o raud- and error-prone providers

(FL, CA, MI, X, NY, LA, IL) and our states with high claims

volumes o short inpatient hospital stays (PA, OH, NC, MO) or a

total o 11 states. Tis demonstration will also help lower the error

rate by preventing improper payments rather than the tradition

“pay and chase” methods o looking or improper payments a

they have been made.

Reviews will begin with reviews o short inpatient hospital stay

(twodaysorless)andtheplannedMS-DRGsforrevieware:

January1 MS-DRG312SYNCOPE&COLLAPSE

March1 MS-DRG069TRANSIENTISCHEMIA

MS-DRG377G.I.HEMORRHAGEWM

May1 MS-DRG378G.I.HEMORRHAGEWC

MS-DRG379G.I.HEMORRHAGE

W/O CC/MCC

July1 MS-DRG637DIABETESWMCC

MS-DRG638DIABETESWCC

MS-DRG639DIABETESW/OCC/MCC

Prior Authorization or Certain Medical Equipment

Te second demonstration will require Prior Authorization or

certain medical equipment or all people with Medicare who re

in seven HEA states with high populations o raud- and error

prone providers (CA, FL, IL, MI, NY, NC and X). It is elt tha

this is an important step toward paying appropriately or certain

medical equipment that has a high error rate. Tis demonstrat

will help ensure that a beneciary’s medical condition warrantsmedical equipment under existing coverage guidelines. Moreo

the program will assist in preserving a Medicare beneciary’s ri

to receive quality products rom accredited suppliers.

Te Prior Authorization demonstration will be implemented in

phases.Duringtherstphase(therstthreetoninemonths),

Medicare Administrative Contractors will conduct prepayme

reviews on certain medical equipment claims. Te second phas

or the remainder o this three-year demonstration, will implem

prior authorization, a tool utilized by private-sector health care

payers to prevent improper payments and deter the raudulent

provision o items or services.

Part A to Part B Rebilling

Te third initiative will allow hospitals to rebill or 90 percent o

the Part B payment when a Medicare contractor denies a Part A

inpatient short stay claim as not reasonable and necessary due t

hospital billing or the wrong setting. Currently, when outpatie

services are billed as inpatient services, the entire claim is denie

in ull.



Tis demonstration will be limited to a representative sample o 380

hospitals nationwide that volunteer to be part o the program. Tis

demonstration will allow hospitals to resubmit claims or 90 percent

o the allowable Part B payment when a Medicare Administrative

Contractor, Recovery Auditor, or the Comprehensive Error

Rate esting Contractor nds that a Medicare patient met the

requirements or Part B services but did not meet the requirements

or a Part A inpatient stay. In addition, this demonstration is

expected to lower the appeals rate which will protect the trust und

and reduce hospital burden. Beneciaries will be held harmless

with respect to changes in hospital coinsurance liability.

OIG Workplan or 2012

Te Ofce o Inspector General Work Plan or Fiscal Year 2012

provides brie descriptions o activities that the Ofce o Inspector

General (OIG) plans to initiate or continue with respect to theprogramsandoperationsoftheDepartmentofHealth&Human

Services in scal year 2012. For each review, the Work Plan

describes the subject, primary objective, and criteria related to the

topic. In 2012, the areas o therapy services that will be a ocus are:

Nursing Home Compliance Plans (New)

Te OIG will review Medicare- and Medicaid-certied nursing

homes’ implementation o compliance plans as part o their day-to-

day operations and whether the plans contain elements identied in

OIG’s compliance program guidance. Te OIG will assess whetherCMS has incorporated compliance requirements into Requirements

o Participation and oversees provider implementation o

plans. Section 6102 o the Aordable Care Act requires nursing

homes to operate a compliance and ethics program, containing

at least 8 components, to prevent and detect criminal, civil,

and administrative violations and promote quality o care. Te

Aordable Care Act requires CMS to issue regulations by 2012 and

SNFs to have plans that meet such requirements on or aer 2013.

OIG’s compliance program guidance is at 65 Fed. Reg. 14289 and 73

Fed. Reg. 56832. (OEI; 00-00-00000; expected issue date: FY 2013;new start; Aordable Care Act)

Medicare Part A Payments to Skilled Nursing Facilities

Te OIG will review the extent to which payments to SNFs meet

Medicare coverage requirements. Te OIG will conduct a medical

review to determine whether claims were medically necessary,

sufciently documented, and coded correctly during calendar year

(CY) 2009. In a prior report, OIG ound that 26 percent o claims

had RUGs that were not supported by patients’ medical records

Te percentage represented $542 million in potential overpaym

or FY 2002. (OEI; 02-09-00200; expected issue date: FY 2012; w

in progress)

Independent Terapists: Outpatient Physical Terapy Services

Te OIG will review outpatient physical therapy services provi

by independent therapists to determine whether they were in

compliance with Medicare reimbursement regulations. Previou

OIG work has identied claims or therapy services provided

by independent physical therapists that were not reasonable,

medically necessary, or properly documented. Te OIG ocus

is on independent therapists who have a high utilization rate o

outpatient physical therapy services. Medicare will not pay or i

or services that are not “reasonable and necessary.” (Social Secu

Act,§1862(a)(1)(A).)Documentationrequirementsfortherapservices are in CMS’s Medicare Benet Policy Manual, Pub. 100

ch. 15, § 220.3.

OIG Released Report on Addressing VulnerabilitiesReported by Medicare Benet Integrity Contractors

On 12/16/2011 the Ofce o Inspector General (OIG) released

report entitled Addressing Vulnerabilities Reported by Medicar

Benet Integrity Contractors. One way that Medicare benet

integrity contractors help prevent raud, waste, and abuse is

by identiying program vulnerabilities. For this study, the OIGidentied the actions that CMS took to resolve vulnerabilities

reported by Program Saeguard Contractors, Zone Program

IntegrityContractors,andMedicareDrugIntegrityContractor

in 2009. Te OIG also determined the monetary impact o thes

vulnerabilities and reviewed CMS’s policies and procedures or

tracking, reviewing, and resolving reported vulnerabilities.

Te OIG ound that contractors reported monetary impact or

only one-third o vulnerabilities, but their estimated impact wa

$1.2 billion. None o these vulnerabilities had been ully resolve

as o January 2011. Because contractors reported monetary impinconsistently or not at all, the actual monetary impact o the

vulnerabilities reported in 2009 could be signicantly greater th

$1.2 billion.

Te OIG ound that as o January 2011, CMS had not resolved

or taken signicant action to resolve 77 percent o vulnerabilitie

reported by contractors in 2009. CMS took signicant action to

resolve 14 o the 62 vulnerabilities, but only 2 o these had been

resolved by January 2011.



Te OIG ound that although CMS has procedures to consistently

track and review vulnerabilities, it lacks procedures to ensure

that vulnerabilities are resolved. Te three CMS divisions that are

responsible or tracking and reviewing vulnerabilities each have

procedures that outline the general steps they take to track and

review vulnerabilities. However, although contractors have been

submitting vulnerability reports since at least 2007, CMS did not

begin developing procedures until 2010. Furthermore, only one o

the three divisions has developed procedures to ollow up on the

implementation o corrective actions.

Tereore, the OIG recommend that CMS (1) determine the status

o all vulnerabilities that have not been resolved and take action to

address them; (2) require all benet integrity contractors to report

monetary impact, when calculable, in a consistent ormat; and

(3) ensure that vulnerabilities are resolved by establishing ormal

written procedures that include timerames or ollow up and that

outline CMS and contractor responsibilities regarding vulnerability

resolution. CMS concurred with the rst recommendation, did not

concur with the second recommendation, and partially concurred

with the third recommendation.

OIG Released Report on South Florida MedicareComprehensive Outpatient Rehabilitation Facilities

On 11/22/2011 the Ofce o Inspector General (OIG) released a

report entitled South Florida Medicare Comprehensive Outpatient

Rehabilitation Facilities. CORFs provide multidisciplinary

outpatient rehabilitation services at a single location. Medicare

allowed approximately $70 million or almost 40,000 beneciaries

nationwide who received CORF services in 2010. O this amount,

more than $22 million was or claims by South Florida CORFs.

In 2010, over 25 percent o all CORFs were in South Florida. Te

OIG ound that eighteen o the one hundred one Comprehensive

Outpatient Rehabilitation Facilities (CORF) in South Florida were

not operational. en were not at the location on le with CMS.

Eight were not open during business hours.

As a result o a special enrollment project and routine oversight

CMS took action against 16 o the 18 nonoperational CORFs in

the months aer the OIG completed their site visits. Te specia

enrollment project resulted in actions against 10 nonoperationa

CORFs, and routine oversight resulted in 6 such actions.

Co-owners o Pocatello Physical Therapy, P.A.

Sentenced in Federal Court

OnDecember12,2011theAUSAannouncedthattheco-own

ofPocatelloPhysicalerapy,P.A.,weresentencedinU.S.Distr

Courtforalteringrecordsinafederalhealthcareaudit.DesFos

and Benedetti were each sentenced to three years o probation.

DesFosseswasned$1,000andorderedtopay$9,757.66in

restitution. Benedetti was ordered to pay $2,442 in restitution. B

will be required to do 300 hours o community service.

Te charges arose out o changes made to patient records reque

or audit by the Western Integrity Center (WIC), a program

saeguard contractor or Medicare. According to court docume

in March 2006, Pocatello Physical Terapy Clinic, P.A. was aske

to provide randomly selected documents to the WIC’s Marylan

location.Atthetime,DesFossesandBenedettiwerebusiness

partners and licensed physical therapists in Idaho. According to

courtdocuments,DesFossesandBenedettimadeadditionalen

to some o the patient les submitted or the March 2006 audit

comparison o unaltered les showed that seven patient les wealtered. Te alterations, or additional entries, were consistent w

amounts previously billed to Medicare.

Liz Barlow

Vice-President of Clinical Services

502.400.1619

[email protected]

Shawn Halcsik

Director of Compliance

414.791.9122

[email protected]

Contact Inormation:

evergreen rehab clinical & compliance bulletin 2012 q1

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