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April/May 2000

By Stuart S. Kurlander, JD, MHA

HCFA issues clarifications on outpatient rehabilitation services post PPS.

Stuart S. Kurlander, JD, MHA

In the year since the prospective payment system (PPS) implementation date, many questions remain unanswered regarding coding, billing, and payment. After several months of discussion with the rehab industry, the Health Care Financing Administration (HCFA) issued a program memorandum that addresses in question and answer format the issues raised by the changes imposed to implement PPS. The program memorandum “Questions and Answers Regarding PPS for Outpatient Rehabilitation Services and Physical Medicine Current Procedural Terminology (CPT) Coding Guidance” also clarifies coding issues for physical medicine. Below are excerpts from the memorandum along with excerpts from the memorandum on time counts and 15-minute units.

Coding-Intermediaries

If hospitals are exempt from the payment caps, why is it necessary for them to report modifiers?

HCFA has identified certain codes as therapy codes, eg, the debridement codes, which the American Medical Association classifies as surgical procedures and are routinely performed as surgery in the hospital outpatient setting. By law, these procedures must be paid when furnished as an outpatient therapy service in the hospital outpatient setting and on the ASC (ambulatory surgical center) blended payment method when provided as an outpatient surgical procedure.

When the new hospital outpatient PPS is implemented in 2000, these procedures would be paid under the hospital outpatient PPS. Therefore, when systems renovations are completed, use of the therapy discipline-specific modifiers would facilitate appropriate payment for these procedures. In the meantime, hospitals would become accustomed to properly billing therapy procedures.

Additionally, the Balanced Budget Act (BBA) of 1997 requires HCFA to submit a report to Congress by January 1, 2001, which recommends establishing coverage policy for beneficiaries based on diagnostic categories and price use of services in both inpatient and outpatient settings rather than on the current dollar limitations. Use of the discipline- specific modifiers by hospitals would greatly enhance HCFA’s collection of data for the study it must develop as required by Congress.

Coding-Intermediaries and Carriers

Explain the difference between HCPCS (HCFA Common Procedure Coding System) codes 97139 and 97799. Code 97139 is an unlisted therapeutic procedure, which the CPT defines as “a manner of effecting change through the applications of clinical skills and/or services that attempt to improve function” in one or more area, each 15 minutes. Performance of this code requires that a physician or therapist have direct (one to one) patient contact.

We understand there is a new HCPCS code G0169. Can you describe when this code should be reported?

G0169, a new HCPCS Level II code, was created for use starting January 1, 2000. It is defined to describe the type of active debridement performed by therapists. A more complete description can be found in the Federal Register, November 2, 1999, p 59426. This code can be used to describe active debridement, whether performed with a scissors, scalpel, or water jet, regardless of the depth of tissue involved. There is no global period on this code. Dressings placed on the wound after debridement are included in this code. We expect therapists to start using this code instead of 10040-4 and 97799 as soon as possible.

Billing-Carriers

When outpatient rehabilitation services are billed to the Part B carrier, is assignment mandatory?

The mandatory assignment provision does not apply to therapy services furnished by a physician, a physical therapist in a private practice, an occupational therapist in private practice, or a nonphysician practitioner. In addition, the mandatory assignment provision does not apply to therapy services furnished incident to the services of such physicians, therapists, or nonphysician practitioners.

If a patient has therapy (any type) for 3 minutes, would a provider charge for 15 minutes? No, this would constitute a therapy session. If a patient has therapy (any type) for 20 minutes, would a provider charge for 15 minutes? Yes.

Are unused minutes in excess of 15 or 30 minutes charged for future visits? No.

In regard to bundled services, does the time for the bundled service get counted in the time for the primary service? This comes up especially with hot/cold packs, 97010. For example, if a patient has a 25-minute visit with a hot pack for 10 minutes and therapeutic exercises for 15 minutes, does this get billed as 2 units of 97110? Or is the hot pack time not counted and only one unit of 97110 billed? The scenario described is one unit of therapeutic exercise, 97110. The time of the hot and cold pack is not skilled and thus does not count in the total time.

The MPFS abstract file contains a technical component price, a professional component price, and a global price for codes 92587 and 92588. Which price should intermediaries apply in making payment for these services?

Intermediaries should pay for these services based on the technical component relative value unit indicated in the file. What is the payment for outpatient rehabilitation services furnished on or after January 1, 1999?

Generally, for outpatient rehabilitation services furnished on or after January 1, 1999, Medicare payment is equal to 80% of the lesser of the actual charges for the service or the physician fee schedule amount after the Part B deductible is met. The only exception to this method of payment is for those services specifically cited in PM AB-00-01 as being paid for on a cost basis in hospital outpatient departments.

Payment-Intermediaries and Carriers

How do intermediaries obtain prices for therapy services that are not priced on the MPFS abstract file? A service with a code that is not priced on the MPFS indicates it is carrier priced. Intermediaries should request all required documentation from the provider and forward a copy of the claim with all supporting documentation to the carrier for pricing. To establish documentation requirements, contact the appropriate local carrier for the jurisdiction that is being billed. Each carrier will have discretion as to what documentation is needed to price a particular service. There are certain services that carry a restricted status on the MPFS database. If the carrier reviews the necessary documentation and determines that the service is noncovered, you will be instructed to deny the claim.

Are rehabilitation agencies and comprehensive outpatient rehabilitation facilities (CORFs) required to continue submitting cost reports? If so, will provider cost reports be revised to reflect the movement from a cost-based payment methodology to the MPFS and/or imposition of the $1,500 limitation?

Yes, providers (including rehabilitation agencies and CORFs) are required to file cost reports, notwithstanding the fact that therapy services are paid under the MPFS. A revised cost report will reflect the movement from cost-based payment to MPFS payment.

Can occupational therapist and physical therapist dressing changes for wounds be charged? No. Dressing changes are bundled into the MPFS payment for the service. ®

Stuart S. Kurlander, JD, MHA, is a health care partner at Latham & Watkins, Washington, DC.

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April/May 2000