(Medicare Claims Processing Manual)

The contractor shall use the following remittance advice messages and associated codes when rejecting/denying claims under this policy.  This CARC/RARC combination is compliant with CAQH CORE Business Scenario 2.  Group Code: CO  CARC: 4  RARC: N/A  MSN: N/A  The CMS identifies certain codes listed at: http://www.cms.hhs.gov/TherapyServices/05_Annual_Therapy_Update.asp#TopOfPage as sometimes therapy services, regardless of the presence of a financial limitation.  Claims from physicians (all specialty codes) and nonphysician practitioners, including specialty codes 50 (Nurse Practitioner), 89, (Clinical Nurse Specialist), and 97, (Physician Assistant) may be processed without therapy modifiers when they  are not therapy services.  On review of these claims, sometimes therapy services that are not accompanied by a therapy modifier must be documented, reasonable and necessary, and payable as physician or nonphysician practitioner services, and not service s that the contractor interprets as therapy services.   The CWF will capture the amount and apply it to the limitation whenever a service is billed using the GN, GO, or GP modifier.     C.  Contractor Action Based on CWF Trailer   Upon receipt of the CWF error code/trailer, contractors are responsible for assuring that payment does not exceed the financial limitations, when the limits are in effect, except as noted below.   In cases where a claim line partially exceeds the limit, the contractor must adjust the li ne based on information contained in the CWF trailer.  For example, where the MPFS allowed amount is greater than the financial limitation available, always report the MPFS allowed amount in the Financial Limitation field of the CWF record and include the CWF override code.  See example below for situations where the claim contains multiple lines that exceed the limit.   EXAMPLE:   Services received to date are $15 under the limit.  There is a $15 allowed amount remaining that Medicare will cover before the cap is reached.   Incoming claim:  Line 1 MPFS allowed amount is $50. Line 2 MPFS allowed amount is $25.  Line 3, MPFS allowed amount is $30.   Based on this example, lines 1 and 3 are denied and line 2 is paid.  The contractor reports in the Financial Limitation" field of the CWF record $25.00 along with the CWF override code.  The contractor always applies the amount that would least exceed the limit.  Since institutional claims systems cannot split the payment on a line, CWF will allow payment on the line that least exceeds the limit and deny other lines.   D.  Additional Information for Contractors During the Time Financial Limits Are in Effect With or Without Exceptions   Once the limit is reached, if a claim is submitted, CWF returns an error code statin g the financial limitation has been met.  Over applied lines will be identified at the line level.  The outpatient rehabilitation therapy services that exceed the limit should be denied.   The contractor shall use the following remittance advice messages and associated codes when rejecting/denying claims under this policy.  This CARC/RARC combination is compliant with CAQH CORE Business Scenario Three.     Group Code: CO or PR (as defined by section 10.5)  CARC: 119  RARC: N/A  MSN: 20.5  In situations where a beneficiary is close to reaching the financial limitation and a particular claim might exceed the limitation, the provider/supplier should bill the usual and customary charges for the services furnished even though such charges might exceed the limit.  The  CWF will return an error code/trailer that will identify the line that exceeds the limitation.   Because CWF applies the financial limitation according to the date when the claim was received (when the date of service is within the effective date range for  the limitation), it is possible that the financial limitation will have been met before the date of service of a given claim.  Such claims will prompt the CWF error code and subsequent contractor denial.   When the provider/supplier knows that the limit ha s been reached, and exceptions are either not appropriate or not available, further billing should not occur.  The provider/supplier should inform the beneficiary of the limit and their option of receiving further covered services from an outpatient hospit al when outpatient hospital therapy services are excluded from the limitation (unless consolidated billing rules prevent the use of the outpatient hospital setting).  If the beneficiary chooses to continue treatment at a setting other than the outpatient h ospital where medically necessary services may be covered, the services may be billed at the rate the provider/supplier determines.  Services provided in a capped setting after the limitation has been reached are not Medicare benefits and are not governed by Medicare policies.   If a beneficiary elects to receive services that exceed the cap limitation and a claim is submitted for such services, the resulting determination is subject to the administrative appeals process as described in subsection C. of sect ion 10.3 and Pub. 100- 04, Chapter 29.  10.5 - Notification for Beneficiaries Exceeding Financial Limitations  (Rev. 2736, Issued: 06 -28-13, Effective: 10 -01-12, Implementation: 10- 07-13)  A.  Notice to Beneficiaries   Contractors will advise providers/suppli ers to notify beneficiaries of the therapy financial limitations at their first therapy encounter with the beneficiary.  Prior to 2013, Medicare instructed providers/suppliers to inform beneficiaries that beneficiaries were responsible   for 100 percent of t he costs of therapy services above each respective therapy limit (cap), unless this outpatient care was furnished directly or under arrangements by a hospital when outpatient hospital therapy services were excluded from the limitation. T he American Taxpaye r Relief Act (ATRA) of 2012 amended 1833(g)(5) of the Social Security Act (the Act) providing limitation of liability protections (under 1879 of the Act) to beneficiaries with respect to outpatient therapy services that exceed therapy cap amounts, furnis hed on or after January 1, 2013. Thus, effective January 1, 2013, assignment of liability has changed for therapy services exceeding the cap that dont qualify for a coverage exception.  The provider/supplier is financially responsible when Medicare denies  payment for therapy services above the cap that dont qualify for a coverage exception unless a valid Advance Beneficiary Notice of Noncoverage (ABN), Form CMS -R-131, was issued per CMS guidelines.  Providers were previously encouraged to use either a for m of their own design or a voluntary ABN when providing therapy above the cap where no exception was applied; however, this instruction is no longer valid.  When providing therapy services above the cap that dont qualify for the exceptions process, the pr ovider/supplier must now issue a mandatory ABN in order to transfer financial responsibility to the beneficiary. When the ABN is used as a mandatory notice, providers must adhere to the ABN form instructions and guidance published  in Chapter 30, Section 50 of this manual. The ABN and instructions can be found at:  http://www.cms.gov/Medicare/Medicare -General -Information/BNI/ABN.html .  When issuing the ABN for therapy in excess of therapy caps, the following language is suggested for the Reason Medicare May Not Pay section: Medicare wont  pay for physical therapy and speech -language pathology services over (add the dollar amount of the cap) in (add the year or the date s of service to which it applies) unless you qualify for an exception to this cap amount. Your services dont qualify for an exception.  Providers should use similar language for occupational therapy services when appropriate.  A cost estimate for the ser vices should be included per the ABN form instructions. Therapy cost estimates can be listed as a cost per service or as a projected total cost for a certain amount of therapy provided over a specified time period.  ABN issuance remains mandatory before th e cap is exceeded when services arent expected to be covered by Medicare because they are not medically reasonable and necessary. When the clinician determines that skilled services are not medically necessary, the clinical goals have been met, or there i s no longer potential for the rehabilitation of health and/or function in a reasonable time, the beneficiary should be informed.  If the beneficiary will be getting services that dont meet the medical necessity requirements for Medicare payment, the ABN m ust be issued prior to delivering these services.  The ABN informs the beneficiary of his/her potential financial obligation to the provider, allows him/her to choose whether or not to get the services, and provides information regarding appeal rights.  When a provider/supplier expects that Medicare will deny payment on a claim for therapy services because they are not medically reasonable and necessary, regardless of   whether or not therapy limits are met, the ABN must be issued before providing the services in order to transfer financial responsibility to the beneficiary.   10.6 - Functional Reporting  (Rev.  4214, Issued: 01- 25-19, Effective: 01- 01-19, Implementation: 02- 26-19)  A.  General   Section 3005(g) of the Middle Class Tax Relief and Jobs Creation Act  (MCTRJCA) amended Section 1833(g) of the Act to require a claims -based data collection system for outpatient therapy services, including physical therapy (PT), occupational therapy (OT) and speech -language pathology (SLP) services.  42 CFR 410.59, 410.60, 410.61, 410.62 and 410.105 implement this requirement.  The system will collect data on beneficiary function during the course of therapy services in order to better understand beneficiary conditions, outcomes, and expenditures.  Beneficiary function info rmation is reported using 42 nonpayable functional G -codes and seven severity/complexity modifiers on claims for PT, OT, and SLP services.  Functional reporting on one functional limitation at a time is required periodically throughout an entire PT, OT, or  SLP therapy episode of care.   The nonpayable G -codes and severity modifiers provide information about the beneficiarys functional status at the outset of the therapy episode of care, including projected goal status, at specified points during treatment, and at the time of discharge.  These G -codes, along with the associated modifiers, are required at specified intervals on all claims for outpatient therapy services  not just those over the cap.   In the CY 2019 Physician Fee Schedule final rule, CMS -1693-F, after consideration of stakeholders requests for burden reduction, a review of all of the MCTRJCA requirements, and in light of the statutory amendments to section 1833(g) of the Act, via section 50202 of Bipartisan Budget Act of 2018 to repeal the the rapy caps, CMS concluded that continued collection of functional reporting data through the same format would not yield additional information to inform future analyses or to serve as a basis for reforms to the payment system for therapy services.  The rul e ended the functional reporting requirements to reduce burden of reporting for providers of therapy services and revised regulation text at 42 CFR 410.59, 410.60, 410.61, 410.62, 410.105, accordingly.   The instructions below apply only to dates of servic e when the reporting requirement was effective, January 1, 2013 through December 31, 2018.   B.  Application of Coding Requirements   This functional data reporting and collection system is effective for therapy services with dates of service on and after J anuary 1, 2013 and before January 1, 2019.    C.  Services Affected     These requirements apply to all claims for services furnished under the Medicare Part B outpatient therapy benefit and the PT, OT, and SLP services furnished under the CORF benefit. They also apply to the therapy services furnished personally by and incident to the service of a physician or a nonphysician practitioner (NPP), including a nurse practitioner (NP), a certified nurse specialist (CNS), or a physician assistant (PA), as applicabl e.  D.  Providers and Practitioners Affected.   The functional reporting requirements apply to the therapy services furnished by the following providers:  hospitals, CAHs, SNFs, CORFs, rehabilitation agencies, and HHAs (when the beneficiary is not under a home health plan of care).  It applies to the following practitioners: physical therapists, occupational therapists, and speech- language pathologists in private practice (TPPs), physicians, and NPPs as noted above.  The term clinician is applied to these practitioners throughout this manual section.  (See definition section of Pub. 100- 02, Chapter 15, section 220.)   E.  Function -related G -codes   There are 42 functional G -codes, 14 sets of three codes each.  Six of the G -code sets are generally for PT and O T functional limitations and eight sets of G -codes are for SLP functional limitations.   The following G -codes are for functional limitations typically seen in beneficiaries receiving PT or OT services.  The first four of these sets describe categories of f unctional limitations and the final two sets describe other functional limitations, which are to be used for functional limitations not described by one of the four categories.   NONPAYABLE G -CODES FOR FUNCTIONAL LIMITATIONS