Billing therapy services in support of comprehensive APC services

by Valerie A. Rinkle, MPA

CMS’ Transmittal 3523, issued May 13, is the quarterly July 1 OPPS update. In this transmittal, CMS briefly mentions billing physical and occupational therapy and speech-language pathology services provided in support of or adjunctive to comprehensive APC (C-APC) services under revenue code 0940 (general therapeutic services) rather than the National Uniform Billing Committee?defined revenue codes for these services (i.e., 042x, 043x, and 044x, respectively).

CMS refers to these therapy services as "non-therapy outpatient department services." In addition, CMS says that these services should not be reported with therapy CPT® codes.

These therapy services have been packaged into C-APCs since the inception of these per-encounter/per-claim payments in 2015. Initially, CMS implemented 25 C-APCs in 2015 for device-intensive procedures. In 2016, the agency expanded the concept to 33 surgical and procedural C-APCs covering almost 700 CPT/HCPCS procedure codes in nine clinical families. It also added one C-APC to pay for ancillary services in the case of inpatient-only procedures performed on a patient who dies prior to being admitted as an inpatient (billed with modifier ?CA).

Another C-APC is for observation services when billed for eight or more hours, with either ED, clinic, or direct admit codes and no surgery service performed. These C-APCs are defined with status indicators J1 and J2. On these claims, there is one payment associated with one primary CPT/HCPCS regardless of the number of days for the encounter. All of the other charges and codes are billed on the claim. There are a few exceptions, such as non-OPPS services like ambulance and preventive services such as vaccines and mammography.

While the transmittal does not provide much explanation, it is assumed that this instruction follows CMS’ comment in the 2016 OPPS final rule, where CMS stated at 80 FR 70326 (emphasis added):

Payment for these non-therapy outpatient department services that are reported with therapy codes and provided with a comprehensive service is included in the payment for the packaged complete comprehensive service. We note that these services, even though they are reported with therapy codes, are outpatient department services and not therapy services. Therefore, the requirement for functional reporting under the regulations at 42 CFR 410.59(a)(4) and 42 CFR 410.60(a)(4) does not apply.

Therefore, according to this statement in the 2016 OPPS final rule, CMS intended to provide administrative relief to hospitals so that they would no longer have to report functional status HCPCS G codes and modifiers when these therapy services were provided in support of C-APC services and included on the same claim.

However, since January 1, the Integrated Outpatient Code Editor (I/OCE) claim edits continue to require reporting of functional status HCPCS G codes and modifiers if therapy CPT and revenue codes are reported. Changing the reporting of these therapy services from the usual revenue codes and CPT codes to revenue code 0940 and no CPT codes will no longer trigger the claim edits that require the reporting of functional status codes and modifiers. However, there seems to be even more behind this change.

Defining therapy services

CMS described these therapy services provided during the perioperative period or in support of observation as not the same therapy services discussed in section 1834(k) of the Social Security Act (SSA). This distinction is an important one, because therapy services that meet the definition of therapy services performed by therapists under a plan of care in accordance with sections 1835(a)(2)(C) and 1835(a)(2)(D) of the SSA are excluded from OPPS by statute and paid under the Medicare physician fee schedule.

CMS implies that therapy services performed during the same encounter as C-APC services, even when performed by licensed and credentialed therapists, do not meet that same statutory definition of therapy, namely due to not being under a plan of care. Therefore, CMS no longer wants these therapy services in support of C-APCs to be reported with the same revenue and CPT codes as that used for therapy provided under a plan of care, which are required to be billed as repetitive services on monthly claims. C-APC services are required to be on an outpatient hospital claim that includes all the other charges and codes for services performed during the same encounter that are supportive or adjunctive to the C-APC service.

The transmittal also refers to the status indicator for this revenue code (0940) being changed from B to N. Status indicator B means codes that are not recognized when submitted on an OPPS claim. One way to remember this is that B stands for "better code." Status indicator N means items unconditionally or always packaged, or stated another way, services never separately paid. Heretofore, status indicators were preserved for CPT/HCPCS codes and APC groupings and not assigned to revenue codes.

However, CMS maintains a list of packaged revenue codes. Previously, revenue code 0940 was not included in the list of packaged revenue codes (Table 4 in the 2016 OPPS final rule at 80 FR 70320). CMS appears to be changing revenue code 0940 to be included in the list of packaged revenue codes.

If the services are no longer to be reported with CPT codes, then this revenue code will become packaged. As is the case with all packaged revenue codes, if the service is defined by a CPT/HCPCS code, and all other CPT/HCPCS coding and NCCI policies are followed, the CPT/HCPCS codes should be reported in addition to the revenue code irrespective of the fact that the revenue code is packaged.

Setting a precedent

This transmittal is the first time that CMS appears to suggest that services that meet the definition of CPT/HCPCS codes should not be reported at all, even when all other CPT/HCPCS coding conventions and NCCI policies are followed; it appears to be a precedent for CMS.

Once this change occurs, CMS will not use hospital therapy cost center cost-to-charge ratios from hospital cost reports to reduce the billed charges for therapy under revenue code 0940, but rather hospitals’ "other" cost center cost-to-charge ratios. It will likely result in a mismatch of revenue and expense that could adversely impact future rate setting.

It is interesting to note that rehabilitation services are optional hospital services under CMS’ Conditions of Participation (CoP) at 42 CFR 482.56, which states:

Physical therapy, occupational therapy, speech-language pathology or audiology services, if provided, must be provided by qualified physical therapists, physical therapist assistants, occupational therapists, occupational therapy assistants, speech-language pathologists, or audiologists as defined in part 484 of this chapter.

There are a few services that CMS defines as "sometimes therapy services" which can either be performed by therapists or nurses, namely wound care services. The CoPs, which are different than conditions of payment, do not require a plan of care, but do require orders. Therefore, it appears that hospital therapy services can be provided without a plan of care, and presumably, these services are now packaged under OPPS and do not qualify for physician fee schedule payment. Requirements for therapy plan of care for coverage can be found at 42 CFR 410.61 and 42 CFR 424.24.

To implement this change, hospitals will likely have to duplicate therapy charges in the chargemaster under the different revenue code that would only be used for Medicare outpatients and not for Medicare inpatients, and commercial or Medicaid accounts that are not likely to follow this billing instruction. This implementation step will likely complicate charge capture and increase the likelihood of errors.

Providers should evaluate this CMS instruction and provide feedback to the agency. Consider the following:

• Is this proposal more or less burdensome than continuing to report therapy under the current revenue codes and also reporting the functional status codes and modifiers?
• Do hospitals currently develop plans of care for therapy, whether or not it is in support of a C-APC service?
• Will it alleviate a different type of burden on therapists if plans of care are not required?

Providers should comment to CMS if this solution is more burdensome or creates more confusion. CMS may be able to find other ways to change the I/OCE edits for functional status codes and modifiers and allow therapy services to continue to be reported with the usual revenue codes and CPT codes.

One of the most significant impacts may be to the accuracy of future payment rates. If this instruction continues without change, then a fundamental principle of cost reporting and rate setting seems to have been changed. This new policy may create a critical precedent for future rate setting. If CMS does not hear from many providers, then it is not likely to change the requirement and providers will need to work toward implementation as of July 1.

Editor’s note: Rinkle is a lead regulatory specialist and instructor for HCPro’s Medicare Boot Camp®?Hospital Version, Medicare Boot Camp®?Utilization Review Version, and Medicare Boot Camp®?Critical Access Hospital Version. Rinkle is a former hospital revenue cycle director and has over 30 years in the healthcare industry, including over 12 years of consulting experience in which she has spoken and advised on effective operational solutions for compliance with Medicare coverage, payment, and coding regulations.

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