Free 1-hour Webinar on Excessive use of the KX modifier

Florida's Medicare Admistrative Contractor (MAC) First Coast Service Options (FCSO) has identified excessive use of the KX modifier on claims submitted by providers billing outpatient therapy services.

Medicare only reimburses for services that are considered to be reasonable and necessary for the diagnosis and treatment of illness or injury or to improve the functioning of a malformed body member.

Medicare does not cover maintenance therapy.

The webinar on the Therapy cap exception process and use of the KX modifier will be held on Tuesday, May 22 at 11:30 AM-12:30 PM EST. The delivery language is English.

• Are you the person responsible for billing outpatient therapy services for your provider?
• Are you a physician, non-physician practitioner, or qualified therapist performing outpatient therapy services for Medicare beneficiaries?
• Do you know how to determine if the beneficiary qualifies for the automatic exception process?
• Are you or your billing company appending the KX modifier to all therapy claims?
• Did you know that excessive use and abuse of the KX modifier could result in a probe review of your practice?

If you've answered yes to any of these questions, then you’ll want to mark your calendars.

You do not want to miss this opportunity to learn valuable information about how and when it is appropriate to use the KX modifier on outpatient therapy claims.

During this free one hour educational event, you'll have the opportunity to learn more about:

• Results of data analysis and excessive use of the KX modifier
• The financial limitations of the therapy caps
• The automatic exception process and when it’s appropriate
• How to comply with Medicare regulations regarding the exception process
• How to determine if the Medicare beneficiary meets the criteria for the exception process
• How to take advantage of self-service tools that can help you make the most of your valuable time

Do you want answers to the questions you have?

To submit your questions in advance of the webcast, just sign-up for the webcast on FCSO University ; select the hyperlink under “Course Activities” and submit your questions.

Please submit your questions no later than May 8.

You can't afford to miss this valuable opportunity to learn and interact directly with your Medicare experts at FCSO.

To participate in this webcast, please register by Monday, May 21.

This program has the prior approval of the American Academy of Professional Coders (AAPC) for 1.0 continuing education unit (CEU).

Granting of prior approval in no way constitutes endorsement by the AAPC of the program content or the program sponsor. Please click here for CEU documentation instructions.

Register now.

Note: If you do not have a training account, please click here to learn how to create one.

What about Bob?

Heavy metals leech from chemicals used in ‘old style’ print-making processes through the skin and hands of workers and into their blood. The printing process exposed workers not only through their skin but also through the air they breathed – chemicals became aerated through heating and splashing.

Bob Smith retired from printing after thirty years of exposing himself to dozens of potentially toxic heavy metals that could have leeched into his blood and caused his rare nerve disease that weakened his muscles, deadened the sensation in his feet and caused him to stumble and fall.

Bob had a disease called peripheral neuropathy that caused the tips of the nerves in his legs to slowly begin dying. Normally, peripheral neuropathy works its way up the nerves destroying sensation and muscle control – first in the toes and feet and working its way up to the thighs. The nerves normally die in a steady, progressive pattern and should have taken years to fully rob Bob of the function of his legs.

Bob could have expected to learn to adapt slowly to the irreversible loss of muscle strength and tone in his legs following nerve death.

Except Bob didn’t have time.

Bob woke one balmy Florida morning in September 2008 to find the nerves of the left foot and leg dead.

Bob’s doctor gave him the devastating news with some puzzlement since Bob had no symptoms in the right leg. Normally, peripheral neuropathy is evenly distributed across both legs at the same time.

Even more puzzling, three weeks later Bob began to regain some function in the left leg. He could feel his toes again. He could put weight on the left foot and stand on the left leg somewhat. Bob and his wife Joann were ecstatic but the doctors were concerned – peripheral neuropathy doesn’t normally get better.

Perhaps the medical diagnosis was wrong?

By Thanksgiving, Bob was walking with only a lightweight plastic brace on his left foot and planning his holiday travel schedule up North with his family. He finished physical therapy and said goodbye to his therapists. Bob was out of therapy only a couple of weeks when devastation struck again – this time the right leg suddenly gave way and Bob reported numbness and weakness all the way to his right hip.

Bob’s specialist medical doctor was stumped and referred Bob to the Mayo clinic in Jacksonville for a complete work up. Bob’s hope for a new diagnosis was ironically fufilled when the Mayo clinic doctors told him he had TWO types of neuropathy, not just one.

Bob also had neurogenic claudication from lumbar spinal stenosis – in addition to his heavy metal poisoning.

Bob struggled through Christmas and New Year’s and it wasn’t until the beginning of February that his therapists started measuring some return of function in his wasted right leg.

He stopped using the walker and began using a cane. Bob is now making steady progress and his therapists expect more from him. His wife, Joann, is at every therapy session and pushes him as hard as the physical therapists push him. Bob has never willingly missed a therapy session in eight months.

The Moral Imperative

Bob meets all of the basic requirements for physical therapy services:

• Need
• Progress and Expected Improvement
• Skilled Decisions

If anyone should get more physical therapy then Bob should.

But, Bob is also an outlier – his eight months of therapy clearly put him beyond the mean and the median number of visits for a typical outpatient therapy patient in the United States.

The Financial Imperative

Medicare spends about $3.6 billion (2006) on outpatient physical therapy and over $400 billion (2008) for all health care payments in the United States.

Prior to 2006, when annual per beneficiary financial limitations (the ‘therapy caps’) began Medicare costs for outpatient physical therapy were rising at over 35% per year.

These "piles of cash" are vulnerable to exploitation by entrepreneurial physicians, physical therapists and other, business-minded, operators.

Medicare and Medicaid comprise 50 percent of all US government improper payments in fiscal year 2008 (~$36 billion dollars).

The Pinch Point

Physical therapists are in the pinch point because we see cases like Bob’s daily – people who deserve more care but are arbitrarily limited by financial constraints imposed by a beleaguered health care marketplace.

Physical therapists are the decision makers for people like Bob – does Bob get more therapy and get better or does he get to just go home and stagnate? I know one clinic whose policy is to discharge the patient at $1,840, arbitrarily.

Bye bye. Go home.

One Man’s Answer

Here is the solution I propose: the physical therapy Justification Statement for exceeding the Therapy Cap. The following is a proposed template that is also available at BulletproofPT.com in downloadable PDF format.

Justification Statement

Since 1/05/09 Mr. Bob Smith has had 40 visits to physical therapy working on right leg 'peripheral neuropathy' and difficulty walking.

In February, Mr. Smith exceeded his annual, per beneficiary financial limitation ("therapy cap") and we recommend using a "-KX" modifier to demonstrate need and expected improvement.

He has shown measurable progress on the following standardized tools:

Self-report measures

1. Lower Extremity Functional Scale (see chart)
2. Oswestry Disablement Scale
3. OPTIMAL Scale

Performance measures

1. Functional Reach Test (see chart)
2. Berg Balance Scale
3. Timed Up and Go Test
4. Single Leg Support Test
5. Rhomberg Test

Impairment measures

1. Supine SLR (see chart)
2. Quadriceps MMT (sitting)
3. Knee Extension AROM (supine)

Additional evidence demonstrating progress and expected future improvement includes the following:

1. Bob decreased his assistive device from a walker to a 4-point quad cane over community distances.

2. His written statement, signed by Bob Smith and his wife, affirms his progressive independence in dressing, grooming and bathing at home. They both desire for Mr. Smith to continue working in physical therapy in order to attain full independence.

3. In 2008, Mr. Smith's left leg recovered from sudden onset 'peripheral neuropathy'. He had a short course of physical therapy and uses the left leg now for walking.


If you are like me and you occasionally get patients like Bob then you need a justification statement. Here is the Medicare reference (p.24) speaking to the need for a separate statement, apart from your PT notes. Use mine. Make your own.

Either way, don't send people like Bob home without their physical therapy.

Bob needs more time.

Justify your Physical Therapy

How do you 'justify' your physical therapy?

How do you 'prove' that your patient needs physical therapy and is benefiting from your care.

Many physical therapists think that the patients verbal statements "I feel better!" placed in the written chart is sufficient to justify services to Medicare patients.

Many therapists use a simple outcome measure to show progress and demonstrate need.

Is one simple outcomes measure and patient "subjective" statements sufficient to exceed the $1,840 therapy cap?

Probably not.

Centers for Medicare and Medicaid (CMS) Transmittal 88 states the following:

"It is encouraged but not required that narratives that specifically justify the medical necessity of services be included in order to support approval when those services are reviewed."(p.23)

A narrative is a statement that says "Here is why I am putting the '-KX' modifier on my charges - here is why I think my patient qualifies for Medicare Part B benefits over the therapy cap."

A separate justification statement may be included either as a separate document or within the other documents if the provider/supplier wishes to assure the contractor understands their reasoning for services that are more extensive than is typical for the condition treated. A separate statement is not required if the record justifies treatment without further explanation. (p.24)"

If the record justifies...

That is a big IF...

This Justification Statement is the one my facility uses to PROVE our patient deserves their rightful Medicare benefits.

It also protects me from unfair fines or repayments if I get audited.

Disclaimer: I am a physical therapist in private practice - not a Medicare auditor. You should make your own decision as to the veracity of my statements and the extent to which my recommendations fit with your own compliance program.
I do not give individual compliance advice.

Note in the Justification Statement how various levels of clinical evidence support and reinforce each other:

• outcomes measures
• performance measures
• impairment measures
• written patient statements

"Documentation should establish through objective measurements that the patient is making progress toward goals. Note that regression and plateaus can happen during treatment. It is recommended that the reasons for lack of progress be noted and the justification for continued treatment be documented if treatment continues after regression or plateaus." (p.26)

Your patients deserve the therapy they need.

Some facilities automatically discontinue physical therapy when allowed charges hit $1,840 - regardless of whether patient goals are met.

Is that fair?

A Blow to Autonomous Practice

How much therapy is enough?

Who decides? You?

Maybe not.

The recently published Transmittal 1678 (February 13, 2008) details resources you should use that...

"suggest the amount of certain (physical therapy) services that may be typical, either

• per service
• per episode
• per condition
• per discipline...

The resources are the following...

1. Computer Services Corporation (CSC) Therapy Cap Report, 3/21/2008
2. Computer Services Corporation (CSC) Therapy Edit Tables, 4/14/2008

To summarize:

One in eight physical therapy patients received a -KX modifier in 2006 ($1,740 capped amount).

Florida, New York and New Jersey were the three states with the highest percentage of therapy users over the cap.

These are the three most common physical therapy diagnoses billed to Medicare in 2006.

• 781.2 Abnormality of gait
  
• 724.2 Lumbago
  
• 719.7 Difficulty in walking
  

However, the diagnoses most likely to exceed the cap were different:

• 438.22 - Hemiplegia affecting nondominant side - 31.3%
  
• 438.21 - Hemiplegia affecting dominant side - 30.9%
  
• 438.0 - Cognitive deficits - 30.6%

"In other words, some beneficiaries with diagnoses, although less commonly observed, are more likely to surpass the cap threshold."

Only 2% of physical therapy users who exceeded their capped amounts accessed the hospital to continue their therapy.

Transmittal 1678 suggests that if your billing profile deviates much from these parameters then you may have some explaining to do.

Who wins?

CSC touts the therapy cap exception process as a win for patients (improved access) and for Medicare (lower costs).

Physical therapists, however, are micro-managed, clinical decision-making is aborted and financial risk is shifted to the provider.

Is this sustainable?

No.

Not without the use of financially-motivated third parties (RACS) that treat health care providers as a revenue source.

Does Physical Therapy Cost Too Much?

Some physical therapists over-treat their patients.

The most expensive Medicare physical therapy patient in America received $114,799 in services in 2004.

By 2006, the most expensive Medicare physical therapy patient in America only cost $37,543.

The difference in 2006 vs. 2004 was the implementation of the 'per beneficiary caps' on outpatient rehabilitative services.

The chart header below reads 'Annual Per Beneficiary Payment Threshold Change Per Percentile' and it shows the amount of physical therapy received, in dollars, broken down by percentile.
The next chart is the same data set, with the 100th percentile removed.

Notice how the chart scale shifts and the differences between 2006 vs. 2004 are made apparent.
These two charts are taken from data provided by the Outpatient Therapy Alternative Payment Study 2 (OTAPS 2)

The data for these charts is available in the OTAPS 2 report as Table 3.

I extracted and re-formatted the data as two separate charts to illustrate the impact of the 100th percentile cost outliers.

If these charts are too hard to read I have put them as PDF files at www.BulletproofPT.com.

Falling Costs

Note how costs for physical therapy have fallen across the board.

The exceptions to falling costs are those patients whose costs are below the 50th percentile (median).

Their costs are rising.

At the 50% percentile costs increased at about the same rate of growth as the overall Medicare population (3.5%).

At the 25% percentile costs increased at double the rate of growth of the overall Medicare population.

Why?

Who cares?

At $227 per beneficiary per year Medicare can afford lots and and lots of physical therapy for these people.

At $37,543 per beneficiary per year Medicare can't afford much physical therapy.

The problem is this:

How can Medicare get physical therapy to those patients who need it most while preventing egregious cost outliers like in the first chart?

What to do?

Current legislation has the caps (and their exceptions process) in place until December 31st, 2009.

An alternative payment system is expected to replace the Medicare therapy cap within the next five years.

A pilot study will get underway in May 2009.

Current patients are facing hardships when their $1,810 physical therapy dollar limit is met.

Many physical therapists are uncomfortable appending the -kx modifier if they believe it raises the risk of a Medicare audit (it does).

Do the right thing

If your patient needs therapy and you can show they get better in a timely manner, do it.

If you are unsure or scared about how to document your findings then check out some of the free resources at www.BulletproofPT.com, your source for outpatient Medicare documentation and compliance knowledge.

Can Physical Therapists go over the PT Cap with an X-Ray?

Does an X-ray demonstrate medical necessity for physical therapy?


...or does an axial CT myelogram?


These images are examples that have in common a clear pathology that many patients and physical therapists confuse with medical necessity for physical therapy.

Right now (November 17th 2008) I have several physical therapy patients who have exceeded their $1,810 Medicare benefit and are asking me for continued physical therapy services in my outpatient clinic.

Many of these patients have chronic conditions such as the following:

• degenerative spinal stenosis
  
• massive rotator cuff tears
  
• knee osteoarthritis

These conditions show up well on sophisticated imaging scans such as X-ray, CT scans and MRI.

These conditions often require extended courses of physical therapy or multiple episodes of physical therapy in the course of a calendar year.

In my clinic, the $1,810 Medicare cap is usually reached by 16-18 visits.

It would not be unusual for degenerative spinal stenosis to take 20 visits. I'm pretty sure my experience is typical.

Who needs PT?

For an exception to the Medicare cap the physical therapist would have to show three criteria:

• Need
  
• Progress
  
• Skill

Need is often shown with physical findings.

The above X-ray and CT myelogram show physical findings based on anatomy.

Physical therapists should show physical findings based on function.

Diagnosis: Process or Label?

An epiphany in own my practice has been the use of disablement models: most recently the International Classification of Function (ICF Model) that describes the link between Body Structure and Function and Activity Limitations.

The ICF classification framework is to physical therapists what the ICD-9 diagnostic labels are to physicians.

Note the ICF model describes any health condition - for instance, your patient with degenerative spinal stenosis who has 'run out' of Medicare physical therapy benefits but asks you to append the -KX modifier to continue their care.

What do you do?

Do you ask the doctor for another script?

Perhaps you consider using another diagnosis from the old 'diagnosis list' from 2006.

Don't.

The Therapy Cap

The purpose of the therapy cap is to cut costs without limiting patient access to necessary care.

There is a large POPTs in my town that automatically cuts off therapy to every patient approaching the $1,810 Medicare Cap - regardless of need or progress.

They perceive that, as a POPTs, they are in the Medicare audit crosshairs and they refuse to add 'risk' to their caseload by appending the -KX modifier.

They are limiting care to their patients.

The Caps Work

Data for this table comes from the Outpatient Therapy Alternative Payment Study 2 (OTAPS 2) Task Order - Utilization Report.

Outpatient Physical Therapy
	2004	2006	Per cent change
Mean dollars paid per user	$864	$788.06	-8.8%
Mean dollars paid per episode	$748	$682	-8.9%
Standard deviation paid per episode	$1,047	$782	-25.4%

"The Balanced Budget Act of 1997 enacted financial limitations (therapy caps) on outpatient physical therapy (PT) and speech-language pathology (SLP) combined... In 2006 the Automatic Exceptions Process to the caps began, enacted by the Deficit Reduction Act of 2005." (OTAPS 2)

The result of the caps has been the observed decrease in per user and per episode dollars paid.

Read the full blog entry here.

Note that cost reductions occurred from 2004 to 2006.

There was no cap in 2004. The cap exceptions process began in 2006.

The Caps work - so, work with the Caps

Get better at showing need.

Show that your patients have Activity Limitations using a functional scale.

I recommend the OPTIMAL scale (free) or the AM-PAC (small $$).

Show Progress.

I've designed a neat pen-and-paper graph that easily and quickly shows functional progress over 1, 2 or 3 months.

No more discharges after 20 visits whether the patient is better or not.

Now, patients come back to me because they know I can 'go to bat' for them.

If they are getting better I can prove it.

Get a copy of the Functional Progress Graph here.

Make skilled decisions.

Use the ICF model to link impairments in Body Structure and Function with the measured Activity Limitations.

The link is your Physical Therapist's Diagnosis.

What do YOU need to go to bat for your patients?

Not fancy x-rays or 'alphabet soup' imaging.

Get better at describing your own skills using simple tools.

Get the free tools I've described in this post.

Also, get a free tutorial called Bulletproof PT to learn more.

Older physical therapy patients are worried

Every day I answer questions from older Americans about their physical therapy.

"Will I run out of Medicare physical therapy benefits?"

"What will happen to me - will I have to go into a nursing home?"

Medicare provides physical therapy treatment up to $1,810 in billed charges for the purpose of preventing a loss of independance in older Americans.

Americans living at home, cared for by their loved ones, consume fewer healthcare dollars than Americans living in institutions.

Medicare pays for much of the institutional care in the United States.

Sarah

Today, I treated Sarah, an 86-year old lady with arthritis.  

Sarah is legally blind and cannot walk far because of pain in her back and legs due to a condition called spinal stenosis.

Sarah's husband died a few years ago and now she is alone. 

Sarah can clean her home and care for herself with minor accomodations - she rides the handy bus to church, groceries and physical therapy.  

She doesn't go out much but she lives in a trailer park where neighbors are close by.

But, Sarah is not far from needing more help.

She has been in physical therapy for her spinal stenosis for a month now and we have gotten her back to walking and single-stair climbing (we live in Florida). 

Sarah is much more comfortablenow moving around and doing light lifting.

Friday, November 7th is Sarah's projected discharge date and she is worried that physical therapy will not continue.

She is afraid that she will decline without therapy and require more help to live alone.

Soon, she believes, she will need to move out of her trailer and into a nursing home.

Sarah believes physical therapy can help prevent this decline.

So do I.

Medicare depends on me to prevent Sarah from losing her independance and going to live in a nursing home.  But, for that, I have to make decisions that expose me to the threat of a Medicare audit if it is determined that I gave Sarah 'too much' physical therapy.

What do I do?

I must show that I can help Sarah, that Sarah needs my help and that only a physical therapist, such as I, could help Sarah.

For that I need help.  I need two tools.  Both are free tools.

The first tool is the OPTIMAL.

I use the OPTIMAL to show that Sarah needs physical therapy.

The OPTIMAL also shows that Sarah can now walk further and move around better than she did one month ago.  It shows she makes progress in physcal therapy.

But, I also need one more tool.  I need to append a '-kx modifier' to my physical therapy charges that I send to Medicare.  

I want to show any Medicare auditor that my decision to append that modifier is based on results, not just a one-time event or measurement.

So, I graph my OPTIMAL scores.

Here is the graph template.

What happens to Sarah?

Friday I take my follow-up measurements.  

Sarah's need and progress is evident.

My skill and decisions are well-documented with the graph template.

This time, I think she will qualify for the extra month of physical therapy.