Knowledge Base Article

The 2011 Medicare Physician Fee Schedule (MPFS) final rule, which was released by CMS earlier this week, contains two rules that affect hospitals.

The first concerns the application of a multiple procedure payment reduction for therapy services. Specifically, beginning CY 2011, CMS will apply a 25% payment reduction to the practice expense (PE) component of the Physician Fee Schedule (PFS) payment rate for the second and subsequent "always therapy" services that are furnished to a single patient by a single provider on one date of service. Note that this will not be a reduction of 25% to the total payment amount for the additional multiple services, but only a reduction to one of three components used to calculate the payment rate. The “always therapy” service with the highest PE component will pay at 100% of the payment rate and other “always therapy” services provided the same day will be paid at a reduced rate calculated using the reduced PE component. Without final payment rates and component ratios, we are unable to determine what the final impact will be; we also note that the percent reduction will vary based on the number and combination of services furnished. When the final PFS rates are available, MMP, Inc. will provide some example reduction scenarios.

This policy applies to:

• services provided to the same patient, by the same provider, on the same day of service;
• multiple units of the same therapy service, as well as to multiple different services;
• all settings where outpatient therapy services are paid under Part B at PFS rates, which includes hospital outpatient therapy services;
• services furnished in different sessions on the same day by the same provider; and
• services provided by different therapy disciplines, such as physical therapy, occupational therapy and/or speech therapy.

The “always therapy” CPT codes to which the policy applies are: 92506, 92507, 92508, 92526, 92597, 92607, 92609, 96125, 97001, 97002, 97003, 97004, 97012, 97016, 97018, 97022, 97024, 97026, 97028, 97032, 97033, 97034, 97035, 97036, 97110, 97112, 97113, 97116, 97124, 97140, 97150, 97530, 97533, 97535, 97537, 97542, 97750, 97755, 97760, 97761, 97762, G0281, G0283, and G0329. The policy does not apply to add-on, bundled, or contractor-priced codes.

The other rule effective for CY 2011 concerns signature requirements for laboratory requisitions. Previous guidance from CMS stated that a signature was not required on a laboratory requisition because the requisition was only “ministerial paperwork” and although a signature on a laboratory requisition was one way of documenting the treating physician ordered the test, it was not the only way. CMS believes this guidance was causing a lot of confusion about when signatures were and were not required. Providers were also having problems when Medicare reviewers, such as CERT, required them to produce a signed order to support payment if the requisition was not signed.   In the 2011 MPFS rule, CMS finalized their policy to require a physician’s or non-physician practitioner’s (NPP) signature on requisitions for clinical laboratory diagnostic tests paid under the Clinical Laboratory Fee Schedule (CLFS). Note that for hospitals paid under OPPS, diagnostic laboratory tests are paid under the CLFS (status indicator “A”). Physicians and NPPs may also continue to request laboratory tests by means other than a requisition, such as a written, signed order; a copy of annotated medical records; telephonically; or electronically. (Note: If an order is communicated via telephone, both the treating physician/practitioner, or his or her office, and the testing facility must document the telephone call in their respective copies of the beneficiary's medical records. Under the Hospital Conditions of Participation, verbal orders must be countersigned by the ordering physician/NPP within 48 hours.)

For more detail on both issues, see the complete 2011 MPFS Final Rule. The discussion concerning the therapy payment reduction is on pages 207-240 and the laboratory requisition signature requirements are discussed on pages 1021-1035.