(Medicare Claims Processing Manual)

Use of the exception process does not exempt services from manual or other medical review processes as described in Pub. 100- 08.  Rather, atypical use of the exception process may invite contractor scrutiny, for example, when the KX modifier is applied to all services on claims that are below the therapy caps or when the KX modifier is used for all beneficiaries of a therapy provider.  To substantiate the medical necessity of the therapy services, document in the medical record (see P ub. 100- 02, chapter 15, sections 220.2, 220.3, and 230).   The KX modifier, described in subsection D., is added to claim lines to indicate that the clinician attests that services at and above the therapy caps are medically necessary and justification is documented in the medical record.     10.3.2 - Exceptions Process  (Rev. 3670, Issued: 12- 01-16, Effective: 01- 01-17, Implementation: 01- 03-17)  An exception may be made when the patients condition is justified by documentation indicating that the beneficiary  requires continued skilled therapy, i.e., therapy beyond the amount payable under the therapy cap, to achieve their prior functional status or maximum expected functional status within a reasonable amount of time.   No special documentation is submitted to the contractor for exceptions.  The clinician is responsible for consulting guidance in the Medicare manuals and in the professional literature to determine if the beneficiary may qualify for the exception because documentation justifies medically necessa ry services above the caps.  The clinicians opinion is not binding on the Medicare contractor who makes the final determination concerning whether the claim is payable.   Documentation justifying the services shall be submitted in response to any Additiona l Documentation Request (ADR) for claims that are selected for medical review.  Follow the documentation requirements in Pub. 100- 02, chapter 15, section 220.3.  If medical records are requested for review, clinicians may include, at their discretion, a su mmary that specifically addresses the justification for therapy cap exception.   In making a decision about whether to utilize the exception, clinicians shall consider, for example, whether services are appropriate to --   The patients condition, including t he diagnosis, complexities, and severity;   The services provided, including their type, frequency, and duration;   The interaction of current active conditions and complexities that directly and significantly influence the treatment such that it causes services to exceed caps.   In addition, the following should be considered before using the exception process:    1.  Exceptions for Evaluation Services   Evaluation.  The CMS will accept therapy evaluations from caps after the therapy caps are reached when evaluation is necessary, e.g., to determine if the current status of the beneficiary requires therapy services.  For example, the following CPT codes for evaluation procedures may be appropriate:   92521, 92522, 92523, 92524, 92597, 92607, 92608, 92610, 92611, 92612, 92614, 92616, 96105, 96125. 97161, 97162, 97163, 97164, 97165, 97166, 97167, and 97168.    These codes will continue to be reported as outpatient therapy procedures as listed in the Annual Therapy Update for the current year at: http://www.cms.gov/TherapyServices/05_Annual_Therapy_Update.asp#TopOfPage. They are not diagnostic tests.  Definitions of evaluations and documentation are found in Pub. 100- 02, chapter 15, sections 220 and 230.   Other Services.  There are a number of sources that suggest the amount of certain services that may be typical, either per service, per episode, per condition, or per discipline.  For example, see the CSC -  Therapy Cap Repo rt, 3/21/2008, and CSC  Therapy Edits Tables 4/14/2008 at www.cms.hhs.gov/TherapyServices  (Studies and Reports), or more recent utilization reports.  Professional literature and guidelines from profes sional associations also provide a basis on which to estimate whether the type, frequency, and intensity of services are appropriate to an individual.  Clinicians and contractors should utilize available evidence related to the patients condition to justi fy provision of medically necessary services to individual beneficiaries, especially when they exceed caps.  Contractors shall not limit medically necessary services that are justified by scientific research applicable to the beneficiary.  Neither contract ors nor clinicians shall utilize professional literature and scientific reports to justify payment for continued services after an individuals goals have been met earlier than is typical. Conversely, professional literature and scientific reports shall not be used as justification to deny payment to patients whose needs are greater than is typical or when the patients condition is not represented by the literature.   2.  Exceptions for Medically Necessary Services   Clinicians may utilize the process for ex ception for any diagnosis or condition for which they can justify services exceeding the cap.  Regardless of the diagnosis or condition, the patient must also meet other requirements for coverage.   Bill the most relevant diagnosis.   As always, when billing  for therapy services, the diagnosis code that best relates to the reason for the treatment shall be on the claim, unless there is a compelling reason to report another diagnosis code.  For example, when a patient with diabetes is being treated with therap y for gait training due to amputation, the preferred diagnosis is abnormality of gait (which characterizes the treatment).  Where it is possible in accordance with State and local laws and the contractors local coverage determinations, avoid using vague or general diagnoses.  When a claim includes several types of services, or where the physician/NPP must supply the diagnosis, it may not be possible to use the most relevant therapy diagnosis code in the primary position.  In that case, the relevant diagnos is code should, if possible, be on the claim in another position.  Codes representing the medical condition that caused the treatment are used when there is no code representing the treatment.  Complicating conditions are preferably used in non-primary pos itions on the claim and are billed in the primary position only in the rare circumstance that there is no more relevant code.     The condition or complexity that caused treatment to exceed caps must be related to the therapy goals and must either be the condition that is being treated or a complexity that directly  and significantly impacts the rate of recovery of the condition being treated such that it is appropriate to exceed the caps.  Documentation for an exception should indicate how the complexity (or c ombination of complexities) directly and significantly affects treatment for a therapy condition.   If the contractor has determined that certain codes do not characterize patients who require medically necessary services, providers/suppliers may not use those codes, but must utilize a billable diagnosis code allowed by their contractor to describe the patients condition.  Contractors shall not apply therapy caps to services based on the patients condition, but only on the medical necessity of the servic e for the condition.  If a service would be payable before the cap is reached and is still medically necessary after the cap is reached, that service is excepted.   Contact your contractor for interpretation if you are not sure that a service is applicable for exception.  It is very important to recognize that most conditions would not ordinarily result in services exceeding the cap.   Use the KX modifier only in cases where the condition of the individual patient is such that services are APPROPRIATELY provi ded in an episode that exceeds the cap.  Routine use of the KX modifier for all patients with these conditions will likely show up on data analysis as aberrant and invite inquiry.  Be sure that documentation is sufficiently detailed to support the use of t he modifier.  In justifying exceptions for therapy caps, clinicians and contractors should not only consider the medical diagnoses and medical complications that might directly and significantly influence the amount of treatment required.  Other variables (such as the availability of a caregiver at home) that affect appropriate treatment shall also be considered.  Factors that influence the need for treatment should be supportable by published research, clinical guidelines from professional sources, and/or clinical or common sense.  See Pub. 100- 02, chapter 15, section 220.3 for information related to documentation of the evaluation, and section 220.2 on medical necessity for some factors that complicate treatment.   NOTE:   The patients lack of access to out patient hospital therapy services alone, when outpatient hospital therapy services are excluded from the limitation, does not justify excepted services.  Residents of skilled nursing facilities prevented by consolidated billing from accessing hospital serv ices, debilitated patients for whom transportation to the hospital is a physical hardship, or lack of therapy services at hospitals in the beneficiarys county may or may not qualify as justification for continued services above the caps.  The patients co ndition and complexities might justify extended services, but their location does not.  For dates of service on or after October 1, 2012, therapy services furnished in an outpatient hospital are not excluded from the limitation.      10.3.3 - Use of the KX Modifier  (Rev.  4214, Issued: 01- 25-19, Effective: 01- 01-19, Implementation: 02- 26-19)   NOTE :  Effective for dates of service on or after January 1, 2018, the KX modifier continues to be used.  It no longer represents an exception request  but serves as a confirmation that services are medically necessary after the beneficiary has exceeded the KX modifier threshold of incurred expenses.  Medicare claims systems process claims with and without the KX modifier in the same manner described bel ow and in section 10.4.  When exceptions are in effect and the beneficiary qualifies for a therapy cap exception, the provider shall add a KX modifier to the therapy HCPCS code subject to the cap limits.  The KX modifier shall not be added to any line of s ervice that is not a medically necessary service; this applies to services that, according to a local coverage determination by the contractor, are not medically necessary services.   The codes subject to the therapy cap tracking requirements for a given ca lendar year are listed at: http://www.cms.hhs.gov/TherapyServices/05_Annual_Therapy_Update.asp#TopOfPage.  The GN, GO, or GP therapy modifiers are currently required to be appended to therapy services.  In addition to the KX modifier, the GN, GP and GO modifiers shall continue to be used.  Providers may report the modifiers on claims in any order.  If there is insufficient room on a claim line for multiple mod ifiers, additional modifiers may be reported in the remarks field.  Follow the routine procedure for placing HCPCS modifiers on a claim as described below.    For professional claims, sent to the A/B MAC(B), refer to:  o Pub.100- 04, Medicare Claims Processing Manual, chapter 26, for more detail regarding completing Form CMS 1500, including the placement of HCPCS modifiers.  NOTE :  The Form CMS 1500 currently has space for providing four modifiers in block 24D, but, if the provider has more than four to report, he/she can do so by placing the -99 modifier (which indicates multiple modifiers) in block 24D and placing the additional modifiers in block 19.  o The ASC X12N 837 Health Care Claim: Professional Implementation Guide f or more detail regarding how to electronically submit a health care claim transaction, including the placement of HCPCS modifiers.  The ASC X12N 837 implementation guides are the standards adopted under the Health Insurance Portability and Accountability A ct of 1996 (HIPAA) for submitting health care claims electronically.  The 837 professional transaction currently permits the placement of up to four modifiers, in the 2400 loop, SV1 segment, and data elements SV101- 3, SV101- 4, SV101- 5,   and SV101- 6.  Copies  of the ASC X12N 837 implementation guides may be obtained from the Washington Publishing Company.   o For claims paid by a carrier or an A/B MAC(B), it is only appropriate to append the KX modifier to a service that reasonably may exceed the cap.  Use of the  KX modifier when there is no indication that the cap is likely to be exceeded is abusive.  For example, use of the KX modifier for low cost services early in an episode when there is no evidence of a previous episode that might have exceeded the cap is in appropriate.    For institutional claims, sent to the A/B MAC(A):  o When the cap is exceeded by at least one line on the claim, use the KX modifier on all of the lines on that institutional claim that refer to the same therapy cap (PT/SLP or OT), regardless of whether the other services exceed the cap.  For example, if one PT service line exceeds the cap, use the KX modifier on all the PT and SLP service lines (also identified with the GP or GN modifier) for that claim.  When the PT/SLP cap is exceeded by PT services, the SLP lines on the claim may meet the requirements for an exception due to the complexity of two episodes of service.   o Use the KX modifier on either all or none of the SLP lines on the claim, as appropriate.  In contrast, if all the OT lines on the claim are below the cap, do not use the KX modifier on any of the OT lines, even when the KX modifier is appropriately used on all of the PT lines.  Refer to Pub.100- 04, Medicare Claims Processing Manual, chapter 25, for more detail.