With reimbursement rates and profit margins shrinking and unfunded mandates and regulations increasing, home health agencies must look for ways to diversify services all while increasing revenue. One home health service that agencies can offer is home health outpatient therapy, despite it not always being provided in a clinic, hospital or private practice.
What is Home Health Outpatient Therapy?
Home health outpatient therapy differs from therapy services provided under a home health episode of care. Therapy provided to a patient under a home health episode of care is included in consolidated billing under the Patient Driven Groupings Model (PDGM). Payment for outpatient therapy services is not paid under PDGM; instead, reimbursement is calculated using the Medicare Physician’s Fee Schedule (MPFS). In the end, patients do not need to meet the home health definition of homebound status.
Since the reimbursement is calculated using the MPFS, the agency will be reimbursed for 80% of the allowable amount, with the remaining 20% being reimbursed by either supplemental insurance or the patient.
Claims are submitted under Medicare Part A and reimbursed from Medicare Part B. Therefore, the patient must have both Medicare Part A and Medicare Part B.
Medicare Part B reimburses outpatient PT, OT and SLP services if the services are:
It is a Medicare requirement that the therapist conduct a thorough evaluation of the patient prior to treatment and that all progress notes be signed by the treating therapist. According to Medicare guidelines, the plan of care must contain all of the following:
Outpatient therapy services furnished to a beneficiary by a provider are payable only when furnished in accordance with certain conditions. The following conditions apply:
Outpatient therapy claims are billed using the CMS-1450 (UB40) form with a type of bill – 34X – which designates the claim as a home health visit provided on an outpatient basis. The claim requires the use of a CPT/HCPCS code for each date of service.
Additionally, the therapy cap applies to home health outpatient services. The current annual per-beneficiary therapy cap amount is $2,080 for physical therapy and speech therapy services combined and $2,080 for occupational therapy services.
The Agency's Responsibility
The provider must assume professional responsibility for the services, whether the services are provided by a staff or contracted therapist. The provider must:
There are several possible reasons why home health outpatient therapy has not been widely pursued in home health care. Many agencies are unaware that they can provide these services. There are also those who are aware but do not understand the reimbursement and billing procedures, because they are completely different from traditional home health episodic billing. Additionally, many home health care agencies may be avoiding providing this Medicare Part B service because the reimbursement is based on the MPFS and is considerably lower than the home health episode per visit rate.
Many agencies do not have therapists on staff and must use contracted therapists; therefore, those agencies cannot afford to pay the same rates for outpatient therapy visits as they do for home health episode visits. Nevertheless, if an agency seeks a way to expand and diversify its service offerings, outpatient therapy is an option worth exploring.
A patient does not have to be homebound and there is no face-to-face requirement. Remember that the patient must be completely discharged from Part A home health care services. This means that they cannot be receiving nursing or any therapy or aide services through their home health benefit.
Home Health Outpatient Therapy Coverage Guidelines
Beneficiary Fact Sheet on Medicare Limits on Therapy Services
Medicare Benefit Policy Manual
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