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:
provided to a beneficiary who has Part B of the Medicare benefit
furnished under the care of a physician, who is certifying the services are medically necessary
reasonable and necessary to the treatment of the illness or injury, or to the restoration or maintenance of function affected by the illness or injury, and furnished under a written plan of care (POC)
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:
Treatment modalities or procedures being used for each specific problem
The type, amount, frequency and duration of each therapeutic modality
Outpatient therapy services furnished to a beneficiary by a provider are payable only when furnished in accordance with certain conditions. The following conditions apply:
Services are or were required because the individual needed therapy services.
A plan for furnishing such services has been established by a physician/NPP or by the therapist providing such services and is periodically reviewed by a physician/NPP.
Services are or were furnished while the individual is or was under the care of a physician.
In certifying an outpatient plan of care for therapy, a physician/NPP is certifying that the above three conditions are met. Certification is required for coverage and payment of a therapy claim.
Claims submitted for outpatient PT, OT and SLP services must contain the National Provider Identifier (NPI) of the certifying physician identified for a PT, OT and SLP plan of care.
Claims submitted for outpatient PT, OT and SLP services must contain the required functional reporting.
The patient functional limitations(s) reported on claims as part of the functional reporting must be consistent with the functional limitations identified as part of the therapy plan of care and expressed as part of the patient’s long-term goals.
The provider must document the number of minutes for each code being billed (as opposed to home health billing in which providers bill for each visit).
A progress report must be prepared for every 10 visits or immediately prior to the 30th calendar day (whichever is first).
The provider must document every treatment that is provided.
PTAs/COTAs can perform services, but they must be supervised.
The bill type to be used is 34X on a UB-04.
Rev codes are the same as home health.
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:
Accept the patient for treatment in accordance with its admission policies
Maintain a complete and timely clinical record on the patient which includes diagnosis, medical history, orders and progress notes relating to all services received
Maintain liaison with the attending physician or non-physician practitioner with regard to the progress of the patient and to assure that the required plan of treatment is periodically reviewed by the physician
Secure from the physician or non-physician practitioner the required certifications and recertifications
See to it that the medical necessity of such service is reviewed on a sample basis by the agency’s staff or an outside review group
Check the patient’s eligibility in the common working file to make certain that they are not in an active home health episode. Remember that even if a patient is no longer receiving home health services, the agency must discharge and close the episode of care or outpatient therapy services will be denied as not covered.
Always check eligibility and benefits. Medicare has caps on benefits, so make sure your staff knows about them and understands the key details.
Therapists should always ask their patient if they are currently receiving home health services or if they have received these services in the recent past. If so, call the HHA to make sure it has completely discharged the patient.
Although there is no Medicare requirement for an order, when documented in the medical record, an order provides evidence that the patient both needs therapy services and is under the care of a physician.
Most Part B services come with copays, so it’s important to have a process in place to collect. It is easier to collect up front, and doing so reduces the risk of bad debt.
Copays will create additional work and bills, so educate and train your staff on how to handle this.
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