The Centers for Medicare & Medicaid Services(CMS) have clarified and expanded descriptions of the process for therapy capexceptions and contractor instructions. Physicians, providers and non-physicianpractitioners who bill Medicare contractors [fiscal intermediaries includingregional home health intermediaries, Part A/B Medicare AdministrativeContractors and carriers] under the Part B benefit for therapy services need tobe aware of these clarifications listed on CMS’ web site, http://www.cms.hhs.gov/MLNMattersArticles/downloads/MM5271.pdf.

Background.  The Balanced Budget Act of 1997 placed caps on outpatient physical, speech-language and occupational therapy services by all providers, other than hospital outpatient departments. The law required a combined cap for physical therapy and speech-language pathology, and a separate cap for occupational therapy. Due to a series of moratoria enacted by Congress, the caps were only in effect in 1999 and 2003. With the expiration of the most recent moratorium, the caps were reinstated on January 1, 2006 at $1,740 for each cap. However, through the Deficit Reduction Act, Congress has provided that exceptions to caps may be made when provisions of additional therapy services is determined to be medically necessary. As mandated by section 201 of the Tax Relief and Health Care Act of 2006, the exceptions process for therapy caps has been extended until December 31, 2007. Therapy cap amounts have been increased to $1,780. The exceptions process allows for two types of exceptions to cap for medically necessary services: 

Automatic Exceptions.  Automatic exceptions for certain conditions or complexities are allowed without a written request.  A request to the contractor for an exception is not required when services related to these conditions and complexities are appropriately provided and documented.  Beneficiaries who qualify for one of more than 100 Medicare diagnosis codes will receive automatic exceptions if the codes are on the claims for therapy services and if the carrier agrees with the assessment.  Included in this category are codes for lower limb amputation status, diabetes mellitus, neuropathies and walking difficulties.

Manual Exceptions.  Manual exceptions require submission of a written request by the beneficiary or provider and medical review by the contractor responsible for processing the claims.  If the patient does not have a specific condition or complexity that allows automatic exception, but is believed to require medically necessary services exceeding the caps--the provider/supplier or beneficiary may fax a letter requesting up to 15 treatment days of service beyond the cap.  A treatment day is a day on which one or more services are provided. The request must include certain documentation, including justification for additional care.  Contractors will make a decision on the number of treatment days they determine are medically necessary within 10 business days.   

If the contractor rejects the manual exception, physicians may prescribe the therapy and subsequently appeal the claims denial through the Medicare appeals process. Physicians should keep in mind that claims for services above the cap for which an exception is not granted will be denied as a benefit category denial, and the patient will be liable. Specific questions about all Medicare policies should be addressed to the contractors through the contact information.

A list of Medicare contractors can be found at: http://www.cms.hhs.gov/apps/contacts/incardir.asp#1.

General Medicare questions may be addressed to the Medicare regional offices http://www.cms.hhs.gov/RegionalOffices/.