Expiration of Moratorium That Allowed Independent Laboratories to Bill for the Technical Component of Physician Pathology Services Furnished to Hospital Patients and Expiration of Therapy Cap Exceptions

1. Expiration of Moratorium That Allowed Independent Laboratories to Bill for the TC of Physician Pathology Services Furnished to Hospital Patients
The Centers for Medicare & Medicaid Services (CMS) continues to work with Congress on significant legislation which affects the Medicare program. We believe this and other provisions may be extended as part of this legislation. We encourage you to monitor Congressional activity and stay apprised of the status of potential legislation. In the meantime, if such legislation is enacted, CMS will notify Medicare fee-for-service claims processing contractors to again process claims for those affected services. Providers may choose to hold their claims in the event legislation about this issue is enacted. However, current law mandates the following change:

In the final physician fee schedule regulation published in the Federal Register on November 2, 1999, CMS stated that it would implement a policy to pay only the hospital for the technical component (TC) of physician pathology services furnished to hospital patients. At the request of the industry, to allow independent laboratories and hospitals sufficient time to negotiate arrangements, the implementation of this rule was administratively delayed. Subsequent legislation formalized a moratorium on the implementation of the rule.

The most recent extension of the moratorium was established by the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA). Section 136 of the MIPPA expires on December 31, 2009, thus ending the moratorium. Therefore, independent laboratories may no longer bill Medicare for the TC of physician pathology services furnished to patients of a hospital, regardless of the beneficiary's hospitalization status (inpatient or outpatient) on the date that the service was performed. This prohibition is effective for claims with dates of service on and after January 1, 2010.

We will continue to be in communication with you should there be further information regarding payment of claims impacted by the above guidance. In addition, be on the alert for more information about this and other legislative provisions which may affect you.

2. Expiration of Therapy Cap Exceptions Process
The Centers for Medicare & Medicaid Services (CMS) continues to work with Congress on significant legislation which affects the Medicare program. We believe this and other provisions may be extended as part of this legislation. We encourage you to monitor Congressional activity and stay apprised of the status of potential legislation. In the meantime, if such legislation is enacted, CMS will notify Medicare fee-for-service claims processing contractors to again process claims for those affected services. Providers may choose to hold their claims in the event legislation about this issue is enacted. However, current law mandates the following change:

The exceptions to outpatient therapy caps expire on December 31, 2009. Outpatient therapy service providers should not submit claims with the KX modifier for services furnished on or after January 1, 2010. The therapy caps are determined on a calendar year basis, so all patients will begin a new cap year on January 1, 2010. For physical therapy and speech language pathology services combined, the limit on incurred expenses is $1,860. For occupational therapy services, the limit is $1,860. Deductible and coinsurance amounts applied to therapy services count toward the amount accrued before a cap is reached.

Note that patients who have reached their limit(s) on outpatient therapy services, other than those who reside in a Medicare-certified part of a skilled nursing facility, may obtain medically necessary therapy services that exceed the caps if the services are furnished and billed by the outpatient department of a hospital. In other settings, outpatient therapy services in excess of the caps are not covered, and the therapy provider may charge the beneficiary for those services.

We will continue to be in communication with you should there be further information regarding payment of claims impacted by the above guidance. In addition, be on the alert for more information about this and other legislative provisions which may affect you.

Page Last Updated: Wednesday, 30-Dec-2009 12:24:09 CST