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Why Physical Therapists Need to Understand Medicare

Understanding Medicare compliance and requirements is key to understanding your professional future.

Medicare is the most sophisticated payer for our profession, and its policies are widely copied and adopted by other payers. Watch Medicare and you can predict the future. Even if you plan on a career in pediatrics, it is important to understand Medicare.

Unfortunately, Medicare requirements are byzantine and not well understood by most of our colleagues. This is a brief summary of some of the more important Medicare requirements including:

  • Functional Limitation Reporting
  • PQRS
  • Counting Timed Procedures
  • Plans Of Care
  • Continuing Time Procedures
  • Progress Report
  • Medicare Cap
  • Manual Medical Review
  • Medical Necessity Requirements

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Understanding Medicare compliance and requirements is key to understanding your professional future.

Medicare is the most sophisticated payer for our profession, and its policies are widely copied and adopted by other payers. Watch Medicare and you can predict the future. Even if you plan on a career in pediatrics, it is important to understand Medicare.

Unfortunately, Medicare requirements are byzantine and not well understood by most of our colleagues. This is a brief summary of some of the more important Medicare requirements.

 

 

Functional Limitation Reporting:

Put simply, this is a mandatory program designed to create a crude measurement of outcomes. This article from CMS describes it like this: “Functional Reporting collects data on patient function during the therapy episode of care to understand beneficiary functional limitations and outcomes.” [i]

Here is how it works:

  • At the initial visit, for the case, PTs are required to classify a patient’s functional impairment based Medicare’s classification system. The PT must provide an assessment of the patient’s level of impairment from 0% to 100%, and provide a goal level of impairment on the same scale.
  • Physical therapists are required to provide interim updates of the level of impairment and goal level of impairment at interim visits. An interim visit is any visit when a re-evaluation is required, and must fall at least every 10 visits.
  • PTs are also required to provide an update at patient discharge. Medicare has made an allowance for not reporting discharge impairment ratings “[if] discharge data is unavailable, e.g., when the beneficiary discontinues therapy unexpectedly.”[ii]

There are special codes for the impairment categories that begin with the letter “G”. And, there are special code modifiers that describe current, goal, and discharge impairment ratings. These “G codes” are included on Medicare claims. 

Please don’t call these “G Codes”. Both Functional Limitation Reporting and PQRS use special codes that begin with the letter G. Using the term “G Codes” to describe Functional Limitation Reporting tends to create confusion.

There are many more useful resources on Functional Limitation Reporting on the Clinicient website.

PQRS:

The Physician’s Quality Reporting System is an optional quality assurance reporting program designed to provide incentives for performing certain screening tests or tasks that are designed to improve quality. There are complex rules on which PQRS measures may be performed for a given patient visit. Such rules are based on the patient’s age, other procedures that are performed during the visit, and, sometimes, the patient’s diagnosis. For example, there is a measure to specify whether or not you obtained a list of the patient’s current medications. As with Functional Limitation Reporting, there are special codes that begin with “G” are used to report PQRS measure completion that are included with the procedure codes used for billing the services provided during the visit.

Again, the Clinicient website has great resources that explain PQRS in depth.

Counting Timed Procedures:

Many of the procedures used in physical therapy and occupational therapy are reported on claims as 15 minute timed codes. In other words, you may bill for 1 unit of service for every 15 minutes spent providing these timed services. It sounds simple, but there is a complex set of rules about aggregating timed procedures for Medicare that are slightly different than the rules for aggregating timed procedure codes for other payers.

Just saying 15 minutes definitely simplifies things, but there’s a whole “8 minute rule” to billing, and it’s an extremely detailed topic.

Plans of Care:

The therapist is required to establish a plan of care for every Medicare Patient. That plan of care must be approved by a physician. There are specific requirements that spell out what must be included in a plan of care, and POC can be no longer than 90 days.[v]

Progress Reports:

There is a separate requirement for interim progress reports that are to be completed at least every 10 visits during the plan of care.[vi]

Medicare Cap:

There is an annual cap on medically necessary charges for physical therapy and speech services combined along with a separate annual cap for occupational therapy. Currently, the cap is $1940 for Speech and PT with a separate $1940 cap for OT. The cap is based on allowed charges for these services and extends across all services provided for the current year. So, if a Medicare patient has already received services for a totally unrelated condition earlier in the year those prior services will count against the total annual cap. Fortunately, there is an automatic exception to the cap for all medically necessary services, but you are required to put a special code, called a KX modifier, on all medically necessary services that exceed the annual cap.[vii]

Manual Medical Review:

Congress has also mandated a review of all services that exceed $3700 in allowed Medicare charges.

Medical Necessity Requirements:

There are also a number of requirements that spell out what services are medically necessary. In general, you must provide documentation that the services are both reasonable and necessary to assist the patient to return to a reasonable level of function.[viii]

Navigating These Requirements

There are more, but you get the idea. Medicare requirements are incredibly complex and it is no wonder that they are not generally well understood. It is critically important that you have a system that supports you while navigating this minefield of requirements and equally important that you are able to look up the requirements and understand them in depth.

Remember, understanding these concepts is key to understanding your future and ensuring that you have the tools necessary to succeed in our often complicated healthcare system.

[i] https://www.cms.gov/outreach-and-education/medicare-learning-network-mln/mlnmattersarticles/downloads/se1307.pdf

[ii] Ibid Section 220.1.2

[iii] http://www.clinicient.com/functional-limitation-reporting/products/functional-limitation-reporting

[v] https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/downloads/bp102c15.pdf Section 220.1.2

[vi] Ibid Section 220.3 D

[vii] https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/downloads/MM8970.pdf

[viii] Ibid Section 220.1 “Conditions of Coverage and Payment…”

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About Jerry Henderson

Jerry Henderson
Jerry has been a Physical Therapist for over 25 years. In addition to his role as Chief Therapist advising Clinicient, Jerry maintained an active private practice and was President of PhysioCare Corp. which provides management and financial services for independent physical therapy clinics. Prior to PhysioCare, Jerry founded Physical Therapy Clinics, Inc. (PTCI) a multi-clinic physical therapy operation. In 1995, he co-founded PT Link Corporation, which developed physical therapy documentation software. PT Link was acquired by The Pathways Group. In 1993, Jerry co-founded the Independent Private Practice Physical Therapy Association, a non-profit corporation to organize independent physical therapists for local legislative action. Jerry has a BS in Physical Therapy from the University of Utah.

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