Insurance Industry Issue Paper: OT/PT Billing and Medicare G-Codes

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1 Issue Background and History In 2012, the United States Congress passed the Middle Class Tax Relief and Jobs Creation Act of 2012 (MCTRJCA). The MCTRJCA included a subsection Sec. 3005(g) that requires the U.S. Secretary of Health and Human Services to implement, beginning on January 1, 2013, a claims-based data collection strategy that is designed to assist in reforming the Medicare payment system for outpatient therapy services subject to the limitations of Section 1833(g) of the Social Security Act (42 U.S.C. 1395l(g)). The data collection strategy must be designed provide for the collection of data on patient function during the course of therapy services in order to better understand patient condition and outcomes. The Centers for Medicare and Medicaid Services (CMS) issued regulations on November 1, 2012 creating such a system. The CMS data collection strategy requires the reporting with 42 new non-payable functional Healthcare Common Procedure Coding System (HCPCS) G-codes and 7 new severity/ complexity modifiers on claims for Physical Therapy (PT), Occupational Therapy (OT), and Speech-Language Pathology (SLP) services. CMS has directed their Fiscal Intermediary to reject the medical bills of PTs, OTs, and speech therapists if their bills do not include the appropriate G-Codes and severity/complexity modifiers required by the new regulations. In the event bills are rejected due to not having the appropriate G-Codes and severity/complexity modifiers, the OT, PT, or speech therapist may resubmit the bills with the appropriate G-Codes and severity/complexity modifiers. On June 17, 2013, the Texas Department of Insurance s Division of Workers Compensation (DWC) published a memo titled Billing/Reporting Changes for Certain Physical Therapy, Occupational Therapy and Speech Pathology Services effective July 1, 2013 which reported that the new CMS billing and reporting requirements become effective July 1, 2013, and as a result, will also apply to services furnished on Texas workers compensation claims on or after July 1, The memo was prepared and published on the DWC website in response to a request from workers compensation system participants for clarification of the applicability of the new CMS billing and reporting requirements. The memo provided system stakeholders with a two week notice of what constitutes a significant change in billing and reporting requirements. This paper outlines some of the concerns and questions raised by workers compensation insurers in response to the DWC s June 17, 2013 memo. Discussion of Labor Code Provisions Regarding the Adoption of CMS Payment Policies Sec (a) of the Texas Labor Code (regarding Reimbursement Policies and Guidelines; Treatment Guidelines and Protocols) requires the Commissioner of Workers Compensation to adopt health care reimbursement policies and guidelines that reflect the standardized reimbursement structures found in other health care delivery systems with minimal modifications to those reimbursement methodologies as necessary to meet occupational injury requirements. The provision also requires the commissioner, in order to achieve standardization, to adopt, the most current reimbursement methodologies, models, and values or weights used by the federal

2 Centers for Medicare and Medicaid Services, including applicable payment policies relating to coding, billing, and reporting, and may modify documentation requirements as necessary to meet the requirements of Section In 2008, the agency adopted new medical fee guidelines which included language that discussed how the agency applies the federal CMS reimbursement policies. The Medical Fee Guideline (MFG) rules adoption preamble and order notes that Section (a)(5) of the MFG rules allow for the basic Medicare program provisions to be applied with any additions or exceptions necessary for adaptation to the Texas workers' compensation system. The preamble notes that the Medicare program is not a static system as Medical polices change frequently. See Pages 30 and 31 of the MFG rules adoption preamble and order. This same principle should apply in this instance in evaluating whether the CMS directions on the use of the G billing code needs to be followed here in the Texas workers compensation system. Section (a)(5) of the MFG rules appears to have been drafted and adopted with Sec (a) of the Texas Labor Code in mind as the rules adoption preamble specifically notes that the rule allows for the basic Medicare provisions to be applied with additions or exceptions necessary to provide that the only payment policies that are adopted are those which are applicable to workers compensation. The G-Codes and 7 new severity/complexity modifiers that CMS are requiring OTs, PTs, and Speech Therapists to include with their Medicare billing exist for one purpose only to allow CMS to collect the data that the U.S. Congress has directed be collected as part of a future attempt to reform the Medicare payment system for payment of outpatient therapy services subject to the limitations of Section 1833(g) of the Social Security Act (42 U.S.C. 1395l(g)). The CMS G-Codes and 7 new severity/complexity modifiers are not applicable and serve no purpose within the Texas workers compensation system. With this in mind and when applying the provisions of Sec (a) of the Texas Labor Code as it relates to the adoption of payment policies relating to coding, billing, and reporting, it is clear that the CMS requirement for OTs, PTs, and Speech Therapists to submit the appropriate G-Codes and severity/complexity modifiers with their bills to CMS intermediaries and the requirement that the intermediaries reject bills that are compliant with the new billing and reporting requirements of CMS is not applicable to the Texas system. In addition, the use of the word applicable in Sec (a) of the Texas Labor Code, referencing CMS payment policies relating to coding, billing, and reporting, is significant and indicates that the statute gives the Commissioner some ability to evaluate whether some Medicare payment policies are applicable to workers compensation. The policy in question here does not appear to be relevant to the workers compensation system but is more of an administrative and evaluation effort by CMS that has no use in Texas workers compensation system. Therefore, OTs, PTs, and Speech Therapists should not be required to submit the appropriate G- Codes and severity/complexity modifiers with their workers compensation bills. Additionally, workers compensation insurers should not be expected to be able to accept and process e-bills 2

3 and paper medical bills with the appropriate G-Codes and severity/complexity modifiers or return bills that are not compliant with CMS new payment policy. CMS has adopted other payment policies that are not applicable to workers compensation health care treatment and are not currently being applied by health care providers who treat injured employees or enforced by workers compensation insurers and the Division of Workers Compensation. This practice is in line with the provisions of Sec (a) of the Texas Labor Code and Rule (a)(5) and should be followed in the case of the CMS G-Code payment policy. In our opinion, the DWC has the authority under the provisions of Sec (a) of the Texas Labor Code and Rule (a)(5) to evaluate the applicability of the new CMS G-Code payment policy and notify stakeholders of the fact that the CMS payment policy in question is not applicable to workers compensation and therefore under the provisions of the statute and rule were not adopted by the Commissioner of Workers Compensation. The evaluation and determination of the applicability of the new CMS G-Code payment policy does not constitute ad hoc rule-making, but rather is the application of the provisions of Sec (a) of the Texas Labor Code as provided for by the Texas Legislature. This is not to suggest that the DWC should make exceptions to CMS payment policies that are in fact applicable to the Texas workers compensation system. In an instance where it is clear that a payment policy is applicable to workers compensation, the DWC can only provide for an exemption to a CMS payment policy if the DWC, through the rule-making process, adopts an exception to the payment policy. Other Issues of Concern Many in the insurance industry haves other issues of concern that will be discussed during the meeting with Commissioner Bordelon. Those issues include: (1) The ability of OTs, PTs, and Speech Therapists to generate both E-bills and paper medical bills with the appropriate G-Codes and severity/ complexity modifiers; (2) The ability of clearinghouses that handle OT, PT, and Speech Therapist E-bill submissions to transmit E-bills that include G-Codes and severity/ complexity modifiers; (3) The possible increase in the number of paper bills that will be received by insurers in the event a clearinghouse is either unable to transmit an E-bill or receive an E-bill that includes the CMS mandated G-Code and severity/complexity modifiers; (4) If the DWC maintains its position as announced in the June 17 memo, the DWC should provide insurers with any guidance as to how to handle OT, PT, and Speech Therapist bills that do not comply with the CMS G-Code policy; 3

4 (5) If the DWC intends for insurers to reject non-compliant bills, concern exists about rejecting OT, PT, and Speech Therapist that are otherwise payable but do not include the CMS G-Codes and severity/ complexity modifiers; (6) What is the DWC s position and expectation on rejection and not paying for OT and PT bills that do not comply with the CMS G-Code Payment Policy when those bills have been preauthorized; (7) Possible future enforcement action taken by TDI against insurers and/or their bill review company if medical bills from OTs, PTs, and Speech Therapists are accepted and processed when those bills do not include the CMS mandated G-Codes and severity/ complexity modifiers; (8) The ability of the DWC to accept state medical billing and payment data that includes OT, PT, and/or Speech Therapist bills with G-Codes; and costs that insurers, OTs, PTs and their respective E-bill vendor companies may incur to comply with the new payment policy and process of G-codes in the E-bill system; (9) Concerns about the injection of uncertainty about the payment of OT, PT, and Speech Therapy bills beginning July 1, 2013, given the short notice to stakeholders; (10) System friction between the OT, PT, and Speech Therapist communities and the insurance industry that will occur as the result of the enforcement of the CMS G-Code payment policy by insurers when the medical bills do not include the G-Codes and severity/ complexity modifiers required by the CMS policy; (11) The introduction of additional costs to insurance carrier operations caused by the need to make claims system programming changes to allow for the acceptance, collection and reporting of G-Codes and severity/complexity modifiers to the DWC; and (12) Increased bill review costs associated with the inclusion of G-Codes and severity/ complexity modifiers on OT, PT, and Speech Therapy bills. While the insurance industry does not know for certain the degree in which the foregoing issues of concern will materialize and impact E-bill, bill processing and review, we are concerned that these issues could present billing and compliance problems after July 1.These concerns will be discussed in greater detail during the course of the meeting with Commissioner Bordelon. Request for Memo to Be Rescinded and Clarification Provided that The CMS G-Code Payment Policy Is Not Applicable to Workers Compensation We respectfully request that the DWC memo of June 17, 2013 be rescinded and that the DWC use its authority provided by Sec (a) of the Texas Labor to inform system stakeholders that CMS s Medicare payment policy is not applicable. We also ask that OTs, PTs, and Speech Therapists be informed that there is no requirement for the submission of G-Codes and severity/ complexity modifiers with their workers compensation bills. 4

5 We urge that the DWC note in the requested new notice to system stakeholders that insurer carriers shall process and pay OT, PT, and Speech Therapy bills in accordance with current expectations for the Texas system. Further, the memo should note that insurers should not reject the medical bills of OTs, PTs, and Speech Therapists that do not submit the CMS G-Codes and severity/ complexity modifiers for Texas workers compensation claims. 5