Therapy Cap Exceptions Extension Helps Long-Term Care Facilities

MacKenzie Kimball, for HealthLeaders Media , March 5, 2010

The Temporary Extension Act of 2010 (H.R. 4691) that aims to help unemployed Americans, including extending unemployment insurance and premium assistance for COBRA benefits, also extends the exceptions process for Medicare therapy caps to March 31, 2010.

The therapy caps were designed to put a limit on Medicare Part B reimbursement for therapy services. In 2010, this limit is $1,860 for physical therapy (PT) and speech language pathology (SLP) combined and $1,860 for occupational therapy (OT). Under the exceptions process, which was enacted in 2006, Medicare will continue to pay for therapy services in excess of the cap if the services are deemed to be medically necessary.

"Congress has voted on the therapy cap process for years and the last time this was in review was 2008," says Karen Connor, president and CEO of Connor LTC Consulting in Haverhill, MA. "Congress gave until 2010 to review this coverage for Medicare, but in January the coverage was not voted on and the therapy caps went back into play without an exceptions process."

H.R. 4691 extends the therapy cap exceptions process through March 31, 2010, retroactive to January 1, 2010. Some nursing homes have been holding claims for therapy services provided on or after January 1 for residents who exceeded the cap, but qualified for an exception under previous law. These facilities may now submit those claims to Medicare.

Nursing homes who have submitted these claims before now and had them denied should ask their Medicare contractor to adjust the claims to add the KX modifier and ensure the appropriate exception applies.

Although the extension of the therapy cap exception process is good for providers, it is only temporary. If the process is not extended beyond March, many facilities will see declines in revenue.

"If a resident goes over the cap, the facility can bill privately. But if the resident has Medicaid, this may hurt the SNF for reimbursement purposes," Connor says.

In a statement released Wednesday, Larry Minnix, president and CEO of the American Association of Homes and Services for the Aging, commended Congress and President Obama for extending the therapy cap exceptions process and also called attention to the need for a permanent solution.

"We thank Congress and President Obama for extending the Medicare Part B therapy cap exceptions process for an additional 30 days. The exceptions process works well to ensure that Medicare beneficiaries get the therapy they need to resume their regular activities and maintain as much independence as possible," Minnix said. "We urge Congress and the administration to come to a more permanent solution to allow seniors to get essential therapy in the venue they choose, by extending the exceptions process permanently or by repealing therapy caps before the current extension ends."

MacKenzie Kimball is an associate editor in the long-term care market at HCPro. She writes PPS Alert for Long-term Care and manages MDSCentral.

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