Benefit Design and Compliance
Nancy J. Beckley, MS, MBA, CHC
Q: What is an insurance plan benefit design and what does it mean for therapy providers?
A: An insurance benefit design specifies services that are covered under the health insurance plan, whether government-funded, employer-funded, or a personal plan (available to individuals and families via insurance brokers). The benefit design includes deductibles, various co-payments for physician and emergency room visits and hospital stays (including inpatient rehab and skilled nursing) as well as prescription drugs, laboratory, radiology, and additional benefits such as physical therapy.
A benefit design may also include wellness benefits, such as disease management. When a patient presents for services at a therapy clinic via self-referral/direct access or with a physician referral, verifying insurance coverage is the individual’s responsibility. However, there is an expectation on the patient’s part that the provider will verify insurance coverage pertinent to the physical therapy services and discuss the patient’s financial responsibility for covered and non-covered services so there is a clear understanding. (Note: In the emerging trend of cash-based therapy practices, the therapy provider likely will not call to verify benefits but leave that to the patient who assumes financial responsibility/payment on each date of service.)
Q: Can you give an example of an insurance plan benefit design?
A: what is a covered/non-covered benefit under Medicare. Additionally, coverage of certain items is left to the Medicare Administrative Contractors (MACs) via a local coverage determination process, such as coverage of iontophoresis, or a national coverage determination, such as infrared therapy. In discussing the Medicare Part B Trust Fund and benefits, we should note that the beneficiary must have Medicare Part B coverage in order to receive outpatient physical therapy under Part B benefits. Moving forward, this example will be related to outpatient therapy under the Medicare Part B benefit.
Beneficiaries receive the “Medicare and You” booklet via mail annually and an electronic equivalent is also available online: http://www.medicare.gov/Pubs/pdf/10050.pdf. This booklet is the Medicare road map for beneficiaries and includes references to benefits and covered services. The outpatient physical therapy benefit is described as: “Physical Therapy: Medicare covers evaluation and treatment for injuries and diseases that change your ability to function when your doctor or other health care provider certifies your need for it. There may be a limit on the amount Medicare will pay for these services in a single year and there may be certain exceptions to these limits. You pay 20 percent of the Medicare—approved amount, and the Part B deductible applies.”1
In another publication (http://www.medicare.gov/Pubs/pdf/10988.pdf), Medicare describes physical therapy benefit limits as “Medicare limits how much it pays for your medically necessary outpatient therapy services in one calendar year. These limits are called ‘therapy caps’ or ‘therapy cap limits’… After you pay your yearly deductible for Medicare Part B (Medical Insurance), Medicare pays its share (80 percent), and you pay your share (20 percent) of the cost for the therapy services. The Part B deductible is $147 for 2014. Medicare will pay its share for therapy services until the total amount paid by both you and Medicare reaches either one of the therapy cap limits. Amounts paid by you may include deductible and coinsurance costs. You may qualify for an exception to the therapy cap limits (which would allow Medicare to pay for services after you reach the therapy cap limits) if you get medically necessary PT, SLP, and/or OT services over the $1,920 therapy cap limit.”2
Q: Does Workers’ Compensation (WC) have an insurance plan benefit design?
A: Some WC plans and reimbursement to therapy providers are state/plan specific. The purpose of WC is to make the injured worker “whole” by providing medical and wage loss indemnification. State law (and laws governing federal WC programs) will specify the type of therapy services that are available and often distinguish between acute care therapy and return-to-work therapy including functional capacity assessment and other return to work therapy services.
Some WC benefit plans limit provider type. Delaware, for example, requires WC providers to be credentialed by its Office of Workers’ Compensation department. Other benefit plans require credentialing by a national organization such as the Commission on Accreditation of Rehabilitation Facilities. Some may limit benefits by excluding coverage for certain procedures or modalities such as aquatic therapy, application of ice or heat, or by limiting the number of units per treatment session. WC plans may also exclude licensed physical therapy assistants from rendering care. Some WC plans have opted for a Medicare “me too” approach such as application of the eight minute rule for billing or the multiple procedure payment reduction policy. It is easy to see how a therapist literally crossing a state line will see different therapy benefits, and likely a different therapy plan of care, for “like” injured workers. Check the APTA website (http://www.apta.org/Payment/WorkersCompensation) for a vast array of resources on WC, including state-by-state references.
Q: Does Medicaid have the same insurance plan benefit as Medicare?
A: Medicaid is a partnership of the federal government and each state, and Medicaid benefits are defined by each state, including access to physical therapy as well as other therapy benefits. Given the number of states that have moved Medicaid enrollment to a State Insurance Exchange under the Affordable Care Act, it is a good idea to verify current therapy benefits for Medicaid in your state. Also keep in mind that Medicaid is a federal health care program and your compliance program should include this coverage.
Q: Does Benefit Design mean that we treat people differently?
A: A comprehensive patient evaluation leads to an assessment, a plan of care, interventions, and projected outcomes. Patients expect that their therapy provider will verify benefits, eligibility, and payment—as well as submit claims to the insurance company on their behalf. Therapists, unfortunately, often find that the patient’s benefit design and coverage may not be consistent with all the evaluation findings and recommended therapy plan of care—including limits on the number of treatment sessions, the type of therapy performed or number of units per session, and exclusions of certain procedures. In fact, therapists (or their clinics) have become accustomed to benefit limitations and will establish a plan of care that is consistent with the benefit design. For Medicare, this is a part of “compliance.” Patients expect that therapy will be delivered in accordance with their benefit design, but communication is also essential to explaining to patients what recommended services are not covered by insurance. A patient may elect to receive services not covered by their benefit plan and make payment arrangements. Therapists should consider insurance plan benefit design, as it might have a direct impact on the plan of care and services provided.
Q: How does my state practice act come into play with these different benefit designs?
A: All practice acts require a standard of care that is the same regardless of patient’s ability to pay. The plan of care should take into consideration what the patient expects to pay with respect to their insurance plan or other payment options available. We can take a look again at Medicare as an example. As we know, the Medicare therapy cap currently has an exceptions process, which essentially specifies limits on coverage for services that are not medically necessary under Medicare’s benefit design. Medicare is the best example of plan benefit design with limits on coverage for specified procedures (e.g., intrared therapy), and limits on use of ancillary personnel. As a result, we treat Medicare patients differently because of plan benefit design.
Q: Is the Affordable Care Act requiring the same treatment and therapy for everyone?
A: The Affordable Care Act mandated inclusion of essential health benefits that all insurers have had to include in health plans to those who buy health insurance on their own or in small groups. (See the APTA website for a full array of resources on this topic: http://www.apta.org/EHB)
- Ambulatory patient services
- Emergency services
- Maternity and newborn care
- Mental health and substance use disorder services, including behavioral health treatment
- Prescription drugs
- Rehabilitative and habilitative services and devices
- Laboratory services
- Preventive and wellness services and chronic disease management
- Pediatric services, including oral and vision care
It is good news to have rehabilitative and habilitative services deemed an essential health benefit, but therapy practices will still need to verify benefits and determine what will be approved for patient limitations including visit, caps, or other therapy restrictions.
Nancy Beckley, MS, MBA, CHC, is certified in health care compliance by the Compliance Certification Board, and is a frequent speaker and author on outpatient therapy compliance topics. She advises practices on compliance plan development and audit response. Questions and comments can be directed to email@example.com.
1. Medicare and You 2014. U.S. Department of Health and Human Services, Baltimore, MD, September, 2013.
2. Medicare Limits on Therapy Services 2014. Centers for Medicare and Medicaid Services: CMS Product No. 10988.
Note: Fully insured large group plans, self-funded plans, and grandfathered plans (in existence on March 23, 2010) are not required to include the above essential elements. The health plans may also have additional benefits on top of these, so be sure to verify benefits.