The answer to the question in the title is “yes,” and here’s why. Quite often a patient who has been admitted to an inpatient acute-care init originally is thought to be covered under Medicare Part A. At some point later, for various reasons, it often is determined that the patient is not covered under Part A. Before July 1, when functional limitation reporting took effect, a facility simply could turn around and bill all of its therapy services under Medicare part B.

Now, it’s not so easy. Starting on July 1, all Medicare Part B claims from PT, OT and SLP – no matter from what setting – must contain the infamous “G-codes” with the appropriate “severity modifiers” for any given discipline. G-codes represent certain functional categories (i.e., walking and moving around, carrying objects, self-care, swallowing, etc.). The severity modifier indicates the level of functional limitation or disability.

At the time of the initial evaluation, the therapist must determine the patient’s “current” level and projected “goal” level within one particular G-code. This information needs to be supported within the therapist’s initial evaluation, and the chosen G-code with its “current” and “goal” severity modifiers must be reflected on the claim. If not, all subsequent therapy services for that discipline will be denied. 

Again, if the claim that is submitted on the day of the initial evaluation does not contain G-codes, all therapy services for that episode of care involving that discipline will be denied. Also, after 10 outpatient therapy visits, the therapist must perform another evaluation and indicate progress by updating the “current” severity modifiers of the relevant G-code category. Again, this G-code and modifiers must be reflected in the documentation and present on the claim of the 10th visit, or all services for that discipline will be denied from the beginning.

Outpatient therapy clinics only bill Part B on their Medicare patients, and these providers have been gearing up for functional limitation reporting since January. The outpatient rehabilitation documentation EMR vendors have modified their products accordingly to incorporate such reporting. As of July 1, most clinics have been compliant in getting the G-codes on the claims.

What was unexpected is what is happening in the inpatient acute-care units with regard to functional limitation reporting when a patient no longer qualifies for Part A. Many patients are being admitted as observation patients, and therapy services provided to these patients is being billed under Medicare Part B. However, sometimes patients receiving therapy were admitted under Part A, yet then it’s determined that they are observation patients. The therapy services then can be billed under Part B if the G-codes and modifiers were reflected on the initial claim. However, a therapist cannot go back and retroactively apply the codes. Of course, this can be appealed, but at the cost of money and time – and there’s no guarantee it will be over turned.

The solution for inpatient acute-care units is for therapists to perform functional limitation reporting and capture G-codes in the evaluation of all patients (and submit them with the claims). That way, if it turns out that a patient is not covered by Part A, 80 percent of therapy services will be covered by Part B (and the other 20 percent by the co-insurance or the patient). Keep in mind that Medicare Part B patients have a therapy cap, so a system also is needed to keep track of how much has been spent so far on each patient.

If the therapists are compiling documentation in the hospital system, IT also needs to modify the applications so the therapists can capture the G-codes in their notes easily (and have these codes flow over to the billing system to go on the claims). If the therapists are still using pen and paper, the workflow process needs to be worked out between them and the billing department. 

Another solution would be to find out what rehab electronic medical record (EMR) system the outpatient therapy department is using. The leading outpatient therapy EMR systems already have easy-to-use G-code components and Medicare cap tracking tools for therapists; these systems also interface with hospitals; billing systems to send the G-codes. These systems can be easily configured with appropriate clinical content and reports for inpatient acute-care therapists. In most cases, it would simply be a matter of purchasing a few more user licenses from a vendor.

Whichever way a facility chooses to address this situation, the solution to prevent the nonpayment of therapy services in the inpatient acute-care unit is to capture functional limitation reporting, G-codes, and severity modifiers on all patients.

About the Author

Gerry Stone is a physical therapist and the founder/chief clinical officer of The Rehab Documentation Company, Inc., makers of ReDoc Software. He served on the Neuro-Muscular panel of American Physical Therapy Association to help to write The Guide to Physical Therapist Practice, Volume 1, (1995-1997). He has extensive knowledge of the CMS and TJC regulations and billing structures pertaining to rehab settings.

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