Supervision of Outpatient Therapy Services, KX Modifier Thresholds

Remote Therapeutic Monitoring for Physical Therapists and Occupational Therapists in Private Practice.

In the CY 2023 PFS final rule, we finalized new policies allowing Medicare payment for remote therapeutic monitoring (RTM) services, including allowing RTM services to be furnished under general supervision (87 FR 69649). RTM refers to the use of a device to monitor a patient's health or response to treatment using non-physiological data (please see a more detailed list of RTM services at section II.D. of this proposed rule). The current regulations, however, at §§ 410.59(a)(3)(ii) and 410.60(a)(3)(ii) specify that all occupational and physical therapy services are performed by, or under the direct supervision of, the occupational or physical therapist, respectively, in private practice. These regulations make it difficult for physical therapists in private practice (PTPPs) and occupational therapists in private practice (OTPPs) to bill for the RTM services performed by the physical therapist assistants (PTAs) and occupational therapy assistants (OTAs) they are supervising since the PTPP or OTPP must remain immediately available when providing direct supervision of PTAs and OTAs (even though we noted in the CY 2022 PFS final rule that PTPPs and OTPPs were intended to be among the primary billers of RTM services (86 FR 65116)).

We designated the RTM codes as “sometimes therapy” codes (originally in the CY 2022 PFS final rule (86 FR 65116)), meaning that these services may be furnished outside a therapy plan of care when they are performed by physicians and certain NPPs where their State practice includes the provision of physical therapy, occupational therapy, and/or speech-language pathology services. Because we did not propose revisions to §§ 410.59 and 410.60 last year for OTPPs and PTPPs, we proposed to establish an RTM-specific general supervision policy at §§ 410.59(a)(3)(ii) and (c)(2) and 410.60(a)(3)(ii) and (c)(2) to allow OTPPs and PTPPs to provide general supervision only for RTM services furnished by their OTAs and PTAs, respectively.

We also noted that Medicare requires each therapist in private practice to meet the requirements specified in our current regulations at §§ 410.59(c) and 410.60(c) to qualify under Medicare as a supplier of outpatient occupational therapy or physical therapy services. Given

that occupational therapists (OTs) and physical therapists (PTs) who are not enrolled and working as employees of OTPPs or PTPPs do not meet these requirements, we believe they should continue to function under direct supervision of the OTPP or PTPP. This is consistent with the Medicare Benefit Policy Manual, Pub. 100-02, Chapter 15, section 230.4.B, which states that in private practice, OTPPs and PTPPs must provide direct supervision of all services, including those furnished by OTs and PTs who are not yet enrolled in Medicare (even if they meet the other requirements for occupational therapists and physical therapists at 42 CFR part 484). As such, we proposed to retain the OTPP and PTPP direct supervision requirement for unenrolled PTs or OTs by clarifying that the RTM general supervision regulation at §§ 410.59(c)(2) and 410.60(c)(2) applies only to the OTA and PTA and does not include the unenrolled OT or PT.

We solicited comment on this specific proposal as we want to know more about how this policy is now functioning with OTs and PTs who are not enrolled and our proposal to maintain this longstanding policy for direct supervision.

We received public comments on these proposals. The following is a summary of the comments we received and our responses.

Comment: Many commenters supported our proposal to allow PTs and OTs in private practice to provide general supervision for RTM services. Many commenters urged us to finalize our proposal.

Response: We appreciate the support for our proposed policy from the commenters.

Comment: Some commenters reported that the current direct supervision requirement makes it challenging to use PTAs or OTAs to deliver RTM services and stated that allowing general supervision of PTAs and OTAs in private practice settings provides a safe way for patients to receive RTM services.

Response: We appreciate the support for our proposed policy from the commenters.

Comment: Some commenters noted that our proposal aligns with the general supervision policy we finalized beginning in CY 2023 for RTM services furnished by physicians and other practitioners, while a few commenters noted that we did not propose to allow general supervision of PTAs and OTAs last year.

Response: We thank the commenters for their views and clarify that instead of the four proposed G-codes, two of which would encompass PTs, OTs, and SLPs in private practice, we finalized an alternate RTM general supervision policy to begin January 1, 2023. As such, we had not proposed a regulatory change for PTAs and OTAs employed in private practices of PTs and OTs.

Comment: One commenter supported our proposal to retain the OTPP and PTPP direct supervision requirement for unenrolled PTs or OTs. We did not receive any responses to our comment solicitation about how this policy now functions with OTs and PTs who are not enrolled.

Response: We appreciate the support for our proposed policy from the commenter. After consideration of public comments, we are finalizing our proposal for RTM services to allow general supervision of OTAs and PTAs by OTs and PTs in private practice; and finalizing the proposal to continue the requirement for direct supervision of unenrolled PTs and OTs, including for RTM services. We are also finalizing the amendments to the corresponding regulation text at §§ 410.59 and 410.60 as proposed. We believe this proposal will increase access to these remotely provided services performed by PTAs and OTAs under the general supervision furnished by PTPPs and OTPPs, and aligns the regulatory text at §§ 410.59 and 410.60 with the general supervision policy that we finalized for RTM services in the CY 2023 PFS final rule.

General Supervision for PTs and OTs in Private Practice Comment Solicitation

Sections 1861(p) and 1861(g) (by cross-reference to section 1861(p)) of the Act describe outpatient physical therapy and occupational therapy services furnished to individuals by physical and occupational therapists meeting licensing and other standards prescribed by the Secretary, including conditions relating to the health and safety of individuals who are furnished services on an outpatient basis. The second sentence of section 1861(p) of the Act describes outpatient therapy services that are provided to an individual by a physical therapist or occupational therapist (in their office or in such individual's home) who meets licensing and other standards prescribed by the Secretary in regulations and differentiates the therapists that furnish these outpatient therapy services from those working for an institutional provider of therapy services.

In regulations, we have specifically addressed these therapists, previously referred to as PTPPs and OTPPs, since 1999 (63 FR 58868 through 58870). Because we wanted to create consistent requirements for therapists and therapy assistants, we clarified in the CY 2005 PFS final rule with comment period (69 FR 66236, 66351 through 66354) that the personnel qualifications applicable to home health agencies (HHAs) in 42 CFR part 484 are applicable to all outpatient physical therapy, occupational therapy, and speech-language pathology services. Also, in the CY 2005 PFS final rule, we cross-referenced the qualifications for OTs and their OTAs and PTs and their PTAs for all occupational therapy and physical therapy services, respectively, including those who work in private practices, to 42 CFR part 484 by adding a basic rule at §§ 410.59(a) and 410.60(a), respectively. Under Medicare Part B, outpatient therapy services are generally covered when reasonable and necessary and when provided by PTs and OTs meeting the qualifications set forth at 42 CFR part 484. Services provided by qualified therapy assistants, including PTAs and OTAs, may also be covered by Medicare when furnished under the specified level of therapist supervision that is required for the setting in which the services are provided (institutions, and private practice therapist offices and patient homes).

In accordance with various regulations, the minimum level of supervision for services performed by PTAs and OTAs by PTs and OTs working in institutional settings is a general level of supervision (see Table A in the Report to Congress titled Standards for Supervision of PTAs and the Effects of Eliminating the Personal PTA Supervision Requirement on the Financial Caps for Medicare Therapy Services at

https://www.cms.gov/Medicare/Billing/TherapyServices/Downloads/61004ptartc.pdf). For example, 42 CFR 485.713 specifies that when an OTA or PTA provides services at a location that is off the premises of a clinic, rehabilitation agency, or public health agency, those services are supervised by a qualified occupational or physical therapist who makes an on-site supervisory visit at least once every 30 days. We noted that the Medicare Benefit Policy Manual, Pub. 100-02, chapter 8, section 30.2.1 defines skilled nursing and/or skilled rehabilitation services as those services, furnished pursuant to physician orders, that, among other requirements, “must be provided directly by or under the general supervision of these skilled nursing or skilled rehabilitation personnel to assure the safety of the patient and to achieve the medically desired result.” The same manual provision notes that in the SNF setting, skilled nursing or skilled rehabilitation personnel include PTs, OTs, and SLPs.

However, since 2005 in the private practice setting, we have required direct supervision for physical and occupational therapy services furnished by PTAs and OTAs, requiring an OTPP or PTPP to be immediately available to furnish assistance and direction throughout the performance of the procedure(s). We finalized this direct supervision policy in the CY 2005 PFS final rule (69 FR 66354 through 66356) ─ changing it from personal supervision, which required the OTPP or PTPP to be in the same room as the therapy assistant when they were providing the therapy services. Under the current regulations §§ 410.59(c)(2) and 410.60(c)(2), all services not performed personally by the OTPP or PTPP, respectively, must be performed under the direct supervision of the therapist by employees of the practice. Subsequently, in the CY 2008 PFS final rule (72 FR 66328 through 66332), we updated the qualification standards at 42 CFR part 484 for OTs, OTAs, PTs, PTAs, along with those for speech-language pathologists (SLPs).

Over the last several years, interested parties have requested that we revise our direct supervision policy for PTPPs and OTPPs to align with the general supervision policy for physical and occupational therapists working in Medicare institutional providers that provide therapy services (for example, outpatient hospitals, rehabilitation agencies, SNFs and CORFs), to allow for the general supervision of their therapy assistants. Additionally, the interested parties have informed us that all-but-one State allows for general supervision of OTAs and at least 44 States allow for the general supervision of PTAs, via their respective State laws and policies.

We were considering whether to revise the current direct supervision policy for PTPPs and OTPPs of their PTAs and OTAs, to general supervision for all physical therapy and occupational therapy services furnished in these private practices, and solicited comments from the public that we may consider for possible future rulemaking. We were particularly interested in receiving comments regarding the possibility of changing the PTA and OTA supervision policy from direct supervision to general supervision in the private practice setting, and whether a general supervision policy could have implications for situations or conditions raised below:

● Because we want to ensure quality of care for therapy patients, could the general supervision policy raise safety concerns for therapy patients if the PT or OT is not immediately available to assist if needed? Do State laws and policies allow a PTA or OTA to practice without a therapist in a therapy office or in a patient's home?

● Could any safety concerns be addressed by limiting the types of services permitted  under a general supervision policy?

● Would a general supervision policy be enhanced with a periodic visit by the PT or OT to provide services to the patient? If so, what number of visits or time period should we consider?

● Would a general supervision policy potentially cause a change in utilization? Would such a change in the supervision policy cause a difference in hiring actions by the PT or OT with respect to therapy assistants?

Interested parties have been requesting that CMS reconsider its supervision policies for occupational therapy or physical therapy services, and in light of experiences during the PHE for COVID-19, we may consider proposing a general supervision policy for all services furnished by OTAs and PTAs employed by a PTPP or OTPP in the future after reviewing the comments and supporting data in response to this comment solicitation. Therefore, we solicited public comment, along with supporting data, about the questions and concerns we highlighted above, for our consideration for possible future rulemaking. We were further interested in public comment regarding changing §§ 410.59(a)(3)(ii), 410.59(c)(2), 410.60(a)(3)(ii), and 410.60(c)(2) to allow for general supervision of OTAs and PTAs by the OTPP and PTPP, respectively, when furnishing therapy services. Additionally, we solicited public comment for our consideration for possible future rulemaking regarding any appropriate exceptions to allowing general supervision in the furnishing of therapy services.

We received public comments on this comment solicitation. The following is a summary of the comments we received.

Comment: Many commenters stated they supported general supervision of PTAs and OTAs in the private practice setting, as it would align with the supervision requirement of all other Medicare therapy settings and nearly all state practice acts for physical and occupational therapy. Other commenters stated that making the supervision requirement consistent across outpatient settings will reduce administrative burden and confusion and ease compliance for therapy services providers who work and manage staff in more than one type of setting.

Collectively, many commenters suggested that changing the Medicare minimum required supervision level in private practice from direct to general, for example, would: (a) increase access to therapy services for more patients, especially those in rural and underserved communities; (b) allow therapists and therapy assistants to work different or overlapping schedules to accommodate patient availability; (c) optimize resource allocation with more flexibility in scheduling time off for PTs/OTs when PTAs/OTAs are scheduled to work with Medicare patients; (d) remove the additional labor costs of onsite therapist staff during delivery of services by therapy assistants, and (e) eliminate the possibility of disruptions in patient care when the supervising therapist steps out of the practice office, even for a short period of time, as the therapy assistant must stop working, the commenter states that these disruptions can result in patient setbacks, delayed visits, and greater costs to Medicare.

Many commenters responded to our question as to whether a change to general supervision would raise safety concerns for therapy patients. Collectively, commenters did not believe there would be safety concerns with the change to general supervision; and many commenters also pointed out that they are unaware of safety concerns arising in the other Medicare settings where general supervision policies have been in place for many years, even though acuity levels were suggested by several commenters to be higher in SNFs and HHAs.

Several other commenters stated that they were not aware of any safety concerns during the time PTAs/OTAs were treating patients while the PT/OT was off-site utilizing the direct virtual supervision flexibility through real-time audio and video technology during the COVID-19 PHE.

One commenter also stated that they believe the existing structure of guidance from the House of Delegates of the American Physical Therapy Association, Medicare, and State law authorities on  the PT-PTA relationship is sufficient to ensure patient safety under a general supervision policy. Several commenters reported that State licensure practice acts include supervision policies for all settings, including when PTAs and OTAs treat patients in therapy offices or in patients’ homes. Two commenters referred us to the Federation of State Boards of Physical Therapy for a comprehensive list of State supervision laws but listed out some of the latest trends in states’ supervision requirements, including, for example ─ 44 States require general supervision in all settings, New York and the District of Columbia are the only jurisdictions that require on-site supervision of PTAs in all settings, and five States expressly require a PT to be on-site when a PTA provides in-home care. These commenters noted that States are responsibly regulating supervision levels and that where a State has considered off-site supervision or in-home care as appropriate, CMS should not require additional standards.

Two commenters stated that Medicare regulations already limit the types of services permitted to be performed by PTAs and OTAs, for all settings not just private practice, that is, they may not provide evaluation services, make clinical judgments or decisions, or take responsibility for the service. One commenter stated that many States have added additional restrictions for PTAs and believes that State licensure and scope of practice requirements for PTAs determine what services can be safely provided by PTAs to patients, in and off the premises of each health care setting.

Commenters also noted that Medicare already requires the PT and OT to “actively” treat the patient at least once every 10 treatment days, per the progress note requirement. In addition, one commenter stated that many States also mandate that PTs provide periodic reevaluations o on-site or in-room supervisory visits of PTAs more frequently than Medicare does. Since Medicare and State laws already require periodic visits by the PT, one commenter asserted that additional requirements by CMS are not necessary.

In responding to our question as to whether a general supervision policy would cause a change in utilization of therapy services, Commenters mentioned a report by Dobson DaVanzo that they, along with several other rehabilitation organizations, commissioned to evaluate the financial impact of various provisions included in the Stabilizing Medicare Access to Rehabilitation and Therapy (SMART) Act, (H.R. 5536) in the 117 Congress.41 As one issue, the report sought to predict whether the change to general supervision in the private practice setting would increase therapy utilization generally and whether a change in utilization of PTAs/OTAs versus PTs/OTs will occur, as part of the legislation. Using the report’s data, the commenters stated that by making the supervision policy change – which they indicate replaces utilization of therapists with therapy assistants ─ Medicare could save up to $271.3 million (in 2021 dollars) over a 10-year period from 2022 to 2031. They stated this savings is due to the payment differential, the 15 percent reduction of the PFS amount ─ for services furnished in whole or in part by PTAs and OTAs that went into effect in CY 2022 per section 1834(v) of the Act.

Response: CMS will take these comments into consideration for possible future rulemaking.

After consideration of public comments in response to our comment solicitation for general supervision of PTAS and OTAs by PTs and OTs in private practice, we will take these comments into consideration for possible future rulemaking.

Additionally, we received public comments on issues that are considered out-of-scope of the proposals in this rule. As a result, CMS did not summarize or respond to those comments.

2. KX Modifier Thresholds

Formerly referred to as the therapy cap amounts, the KX modifier thresholds were established through section 50202 of the Bipartisan Budget Act (BBA) of 2018 (Pub. L. 115-123, February 9, 2018). These per-beneficiary amounts under section 1833(g) of the Act (as amended by section 4541 of the Balanced Budget Act of 1997) (Pub. L. 105–33, August 5, 1997) are updated each year based on the percentage increase in the Medicare Economic Index (MEI).

In the CY 2023 PFS final rule (87 FR 69688 through 69710), we rebased and revised the MEI to a 2017 base year. Specifically, these amounts are calculated by updating the previous year’s amount by the percentage increase in the MEI for the upcoming calendar year and rounding to the nearest $10.00. Thus, for CY 2024, we proposed to increase the CY 2023 KX modifier threshold amount by the most recent forecast of the 2017-based MEI. For CY 2024, the proposed growth rate of the 2017-based MEI is estimated to be 4.5 percent, based on the IHS Global, Inc. (IGI) first quarter 2023 forecast with historical data through the fourth quarter of 2022. Multiplying the CY 2023 KX modifier threshold amount of $2,230 by the proposed CY 2024 percentage increase in the MEI of 4.5 percent ($2,230 x 1.045), and rounding to the nearest $10.00 results in a proposed CY 2024 KX modifier threshold amount of $2,330 for physical therapy and speech-language pathology services combined and $2,330 for occupational therapy services. We also proposed that if more recent data subsequently became available (for example, a more recent estimate of the CY 2024 2017-based MEI percentage increase), we would use such data, if appropriate, to determine the final CY 2024 MEI percentage increase and would apply that more recent MEI percentage increase to formulate the CY 2024 KX modifier threshold amounts in the CY 2024 PFS final rule. We received a more recent estimate of the CY 2024 2017-based MEI percentage increase of 4.6 percent which is greater than the MEI of 4.5 percent used for determining the proposed $2,330 each for the CY 2024 KX modifier threshold amounts; however, the MEI of 4.6 percent was not enough to formulate a change to the proposed KX modifier threshold amounts for CY 2024. Therefore, we are finalizing the CY 2024 KX modifier threshold amounts of $2,330 for physical therapy and speech-language pathology services combined and $2,330 for occupational therapy services as proposed. Section 1833(g)(7)(B) of the Act describes the targeted medical review (MR) process for services of physical therapy, speech-language pathology, and occupational therapy services.

The threshold for targeted MR is $3,000 through CY 2027. Effective beginning with CY 2028, the MR threshold levels would be annually updated by the percentage increase in the MEI, per section 1833(g)(7)(B) of the Act.  Consequently, for CY 2024, the MR threshold is $3,000 for physical therapy and speech language-pathology services combined and $3,000 for occupational therapy services. Section 1833(g)(5)(E) of the Act states that CMS shall identify and conduct targeted medical review using factors that may include the following:

• The therapy provider has had a high claims denial percentage for therapy service under this part or is less compliant with applicable requirements under this title.
• The therapy provider has a pattern of billing for therapy services under this part that is aberrant compared to peers or otherwise has questionable billing practices for such services, such as billing medically unlikely units of services in a day.
•  The therapy provider is newly enrolled under this title or has not previously furnished therapy services under this part.
• The services are furnished to treat a type of medical condition.
• The therapy provider is part of a group that includes another therapy provider identified using the factors described previously in this section.

We track each beneficiary’s incurred expenses for therapy services annually and count them towards the KX modifier and MR thresholds by applying the PFS rate for each service less any applicable MPPR amount for services of CMS-designated “always therapy” services (see the CY 2011 PFS final rule at 75 FR 73236). We also track therapy services furnished by critical access hospitals (CAHs), applying the same PFS-rate accrual process, even though they are not paid for their therapy services under the PFS and may be paid on a cost basis (effective January 1, 2014) (see the CY 2014 PFS final rule at 78 FR 74406 through 74410).

When the beneficiary’s incurred expenses for the year for outpatient therapy services exceeds one or both of the KX modifier thresholds, therapy suppliers and providers use the KX modifier on claims for subsequent medically necessary services. Through the use of the KX modifier, the therapist and therapy provider attest that the services above the KX modifier thresholds are reasonable and necessary and that documentation of the medical necessity for the services is in the beneficiary’s medical record. Claims for outpatient therapy services exceeding  the KX modifier thresholds without the KX modifier included are denied. (See the CY 2023 PFS final rule at 87 FR 69650 through 69651))

Comment: One commenter supported the change in the KX modifier threshold amounts for CY 2024, and thanked us for the confirmation.

Response: We appreciate the supportive remarks from the commenter.

Using the updated MEI of 4.6 in determining the CY 2024 KX modifier amounts, we are finalizing the CY 2024 KX modifier threshold amounts as proposed: $2,330 for physical therapy and speech-language pathology services combined and $2,330 for occupational therapy services.

Reference

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 405, 410, 411, 414, 415, 418, 422, 423, 424, 425, 455, 489, 491, 495, 498, and 600

CMS-1784-F

RIN 0938-AV07

Medicare and Medicaid Programs; CY 2024 Payment Policies under the Physician Fee Schedule and Other Changes to Part B Payment and Coverage Policies; Medicare Shared Savings Program Requirements; Medicare Advantage; Medicare and Medicaid Provider and Supplier Enrollment Policies; and Basic Health Program