Physician Update Fix Is a Stopgap Measure until the end of March

President Obama and his administration have been working with Congress to find a permanent solution for the elimination of the Sustainable Growth Rate (SGR) reductions that were scheduled to take place on January 1, 2014. In the interim he has signed into law the Pathway for SGR Reform Act of 2013 that includes several provisions to eliminate the expected reductions in coverage through March 31, 2014. This new legislation provides for a .5 percent update for all medical professionals treating Medicare patients during this period. There were several other critical changes introduced with this law as well that include the following provisions.

Medicare Physician Payment Update

Section 1101 – This provision helps medical professionals that are treating Medicare patients avoid the reductions in payments that were scheduled to take place on January 1, 2014. The rate has been temporarily adjusted to include a .5 percent update for any treatment provided from January 1, 2014 through March 31, 2014. Ongoing revisions of the 2014 Medicare Physician Fee Schedule (MPFS) are taking place during this period to reflect the new law’s requirements as well as incorporating various technical corrections including the 2014 conversion factor of $35.8228.

Medicare Physician Work Geographic Adjustment Floor

Section 1102 – This extension will also be listed in the revised MPFS when completed. It provides for an extension of the existing physicians work geographic cost index of 1.0 throughout the period.

Payments for Medicare Outpatient Therapy Services

Section 1103 – This section provides for an extension of the exceptions applied to outpatient therapy caps though the March 31, 2014 date. If an exception to the cap is needed for medically required therapy, providers are instructed to include a KX modifier on any Medicare claims submitted during this period. This new law also extends this cap exception to services that are delivered through a hospital outpatient department (OPD). Complete details for the exception process can be found in the Medicare Forms Processing Manual if needed.

This section also requires a manual Medicare review of all outpatient therapy services that have been rendered once a patient reaches a specified cost threshold of $3,700 for the calendar year. This total includes any OPD therapy services as well. The only exception to this threshold is that occupational therapy is generally treated separately from speech-language or other physical therapy services and has its own threshold of $3,700 for the year.

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