First Quarter 2014 Medicare Part B Rate Calculation Tool

President Obama has signed the Pathway for SGR Reform Act of 2013 into law. This new law prevents a scheduled payment reduction in the Medicare Physician Fee Schedule (MPFS). The MPFS includes Medicare Part B rates for therapy and other ancillary services provided by nursing homes, home health agencies, and suppliers.

The new law contains three important features:

·         Section 101 of the new law overrides the previously announced 20.1 percent reduction in Medicare Part B rates and substitutes an overall 0.5 percent increase in the MPFS for the period of Jan. 1, 2014 through March 31, 2014;

·         Section 103 extends the therapy caps exceptions process and application of the KX modifier through March 31, 2014 (for the CMS therapy caps and the exceptions process website, please click here); and

·           By extending certain provisions of the  American Taxpayer Relief Act of 2012, Section 103 also extends the mandate that Medicare perform manual medical review of therapy services for the same period of Jan. 1, 2014 through March 31, 2014. This review applies when the exceptions process is triggered and the beneficiary has reached a dollar aggregate threshold amount of $3,700, including hospital outpatient department therapy services. The two separate $3,700 aggregate annual thresholds remain unchanged: (1) physical therapy and speech-language pathology services combined and (2) a separate threshold for occupational therapy services.

Please note that the therapy caps dollar limits for services not triggering the exceptions process remain in place for calendar year 2014, but are adjusted upwards as beneficiaries begin a new benefit period on Jan. 1. For 2014, the new cap for physical therapy and speech language pathology services combined is $1,920. The separate cap for occupational therapy services is $1,920. Deductible and coinsurance amounts applied to therapy services count toward the amount accrued before a cap is reached, and also apply for services above the cap where the KX modifier is used.

Finally, as the new law's title states, it sets the stage for reform of the sustainable growth formula methodology, which continues to call for reductions in Medicare Part B rates and which resulted in the previously announced 20.1 percent reduction noted above. While the language remains very general, it is yet another mandate on CMS to reform the payment system, a process generally referred to as the "Doc Fix."

Please click here for the Medicare Part B Rate Calculation Tool.

Contact: Patrick Cucinelli, pcucinelli@leadingageny.org, 518-867-8827