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Therapy Cap News Regarding ABNs and Payment Liability


CMS recently issued guidance to clarify that in 2013 physical therapists (PTs) must issue a valid Advanced Beneficiary Notice (ABN) to patients to collect out-of-pocket payment from Medicare beneficiaries when Medicare deems services "not reasonable and necessary" after the therapy cap is exceeded. CMS added a frequently asked questions (FAQ) document to its therapy resources page that describes in further detail the rules for using an ABN for services that exceed the therapy cap on or after January 1, 2013, as a result of the Taxpayer Relief Act of 2012. The FAQ reinforces that "If the ABN isn't issued when it is required and Medicare doesn't pay the claim, the provider/supplier will be liable for the charges."

APTA published news of this change on May 3, 2013. PTs with further questions on using ABNs are encouraged to contact CMS at

In related news from CMS, a May 23, 2013, FFS Provider E-news article (Change to Payment Liability for Therapy Cap Denials) notes that remittance advices may incorrectly report that the beneficiary is liable for payment when liability actually rests with the provider. CMS encouraged providers to review therapy cap denials for dates of service on or after January 1, 2013, to refund any inappropriately collected payments from beneficiaries. Additionally, providers should cease to collect payments for therapy cap denials unless the beneficiary was appropriately notified via an Advanced Beneficiary Notice of Noncoverage (ABN). more

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