CMS Comments on Billing Therapy Related to C-APCs

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 rather than the NUBC-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 also 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, there were 25 C-APCs in 2015 for device-intensive procedures. In 2016, CMS expanded C-APCs to 33 surgical and procedural C-APCs covering almost 700 CPT/HCPCS procedure codes in nine clinical families. There is also one C-APC to pay for ancillary services in the case of an inpatient only procedures performed on a patient who dies prior to being admitted as an inpatient, which is billed with modifier –CA.  Another C-APC is for observation services when billed for eight or more hours, with no surgery service performed and either ED, clinic, or direct admit codes. 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:

“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.” [emphasis added]

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.

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.

To view the complete, detailed article that appeared on Medicare Compliance Watch, click here.