Therapy Manual Medical Review Changes for 2015

Medicare manual medical review
September 19, 2015
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As we get closer to the end of 2015, more of you may be treating Medicare patients who are at or above the $3,700 cap for manual medical review.

Last year, every PT or OT claim above $3,700 was subject to manual medical review and you could essentially count on the claim being denied.  (Keep in mind that, like the regular Medicare cap of $1,940, the medical review cap is applied separately for PT/SP and OT and does not necessarily apply to Medicare Advantage patients.)

The SGR legislation passed earlier this year included a provision that replaced the mandatory review of claims over $3,700 with an optional review that only targets certain providers. (This legislation included suggested factors for targeted review that are listed below.) CMS was supposed to issue guidance on this targeted review process during July, but has not done so yet.  However, CMS has instructed the recovery audit contractors to stop the 100% manual review and instead conduct targeted reviews. Because the recovery audit contractors are paid based on denials, we expect that they will generally avoid reviewing claims of therapists with a low Medicare denial history.

The lack of CMS guidance on this targeted review does create some uncertainty. However, my recommendation is that if you have a patient who is at or above the $3,700 cap for 2015, you can continue to treat this patient and file claims with a KX modifier if you are confident that you can demonstrate medical necessity for continued therapy.

The factors that CMS may take into account in developing its targeted review process include:

  • The therapist has had a high claims denial percentage or is less compliant with applicable requirements.
  • The therapist has a pattern of billing that is aberrant compared to peers or otherwise has questionable billing practices, such as billing medically unlikely units of services in a day.
  • The therapist is newly enrolled or has otherwise not previously furnished therapy services.
  • The services are furnished to treat a type of medical condition.
  • The therapist is part of a group that includes another therapist identified using the factors used by CMS for targeted review.