2013 Medicare Fee Schedules & Industry Updates



2013 Fee Schedules & Industry Updates

In this issue:


  • Sequestration Cuts Delayed for Two Months
  • 2013 Part B Fee Schedules – 27% Cut Avoided!
  • Therapy Caps Exception Process Extended
  • Multiple Procedure Payment Reduction Remains in Effect; Reduction to Increase 4/1/13
  • IMPORTANT: Part A Coinsurance Bad Debts Reductions
  • 2013 Medicare Part A Coinsurance and Medicare Part B Premium and Deductible


  • January 1, 2013 Medicaid Rates
  • Leave Day Payment Changes Effective January 1, 2013 
  • Family Satisfaction Survey Results



Sequestration Cuts Delayed for Two Months

After months of stagnant negotiations over the so-called “fiscal cliff”, both chambers of Congress passed The American Taxpayer Relief Act to avoid wide-ranging tax increases and spending cuts.  The bill included a two-month delay of the “sequestration” cuts that would have resulted in spending cuts to numerous government programs, including a 2% cut to the Medicare program.  Without the delay, Medicare Part A RUG-IV rates would have been reduced for skilled nursing facilities nationwide.  The bill effectively settled tax rates but did not deal with the majority of the spending cuts, other than to delay them.  Unfortunately, the two-month delay, along with the government reaching the debt ceiling, sets Congress up for another round of difficult negotiations over spending cuts.


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2013 Part B Fee Schedules – 27% Cut Avoided through December 31, 2013

The bill fortunately included a provision to avoid an expected 27% cut to the Medicare Part B fee schedules, known as the “doc fix”.  The long-term care industry initially expected the cost of the provision to be borne by skilled nursing facilities through a reduction in allowable bed tax rates.  However, Congress paid for the “doc fix” with various reductions to hospital reimbursement.

While many news releases have said that fee schedule payments will be “frozen”, this does not mean that the fee schedules will not change effective January 1, 2013. There have been various adjustments to the factors that are used to calculate the payments.  The Therapy and Radiology fee schedules provided below are effective from January 1, 2013 through December 31, 2013. It is important to forward the fee schedules to your business office personnel to use for January bills. The schedules are available in PDF format in the links below.

Our Revenue Cycle Consultants are available to assist with any billing questions you may have. In addition, if you use PointClickCare, we can electronically upload the fee schedules for you.

Many of the fee schedules change or are updated on a quarterly basis. Please review the appropriate schedule based on the Centers for Medicare & Medicaid Services (CMS) updates. Check the CMS website on a regular basis for updates to these schedules. Please note that these schedules are not all inclusive. We have attempted to limit this information to the most commonly used Healthcare Common Procedure Coding System (HCPCS) codes for long-term care facilities.

Beginning in 2013, CMS has added 42 “always therapy” codes that will be used for informational reporting on Part B therapy beneficiaries.  The “G” codes, all of which have no associated payment, have been added to the therapy fee schedules provided below. CMS has issued an MLN Matters update regarding the new codes.  Click here to read the update.

Many providers use only the therapy fee schedules. We have provided the lab, radiology, PEN and DMEPOS schedules in order to help you identify potential cost savings for your Medicare Part A and Managed Care residents. The fee schedules may be useful in negotiating and verifying the rates being paid to ancillary services providers and will provide guidance to ensure you are paying a cost effective rate.

Ohio Medicare Part B Fee Schedules

  1. Therapy 2013 Ohio
  2. Radiology 2013 Ohio
  3. Laboratory 2013 Ohio
  4. PEN 2013 National
  5. Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Items:


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Therapy Caps Exception Process Extended

The extension bill passed by Congress also included a two-month extension of the therapy caps exception process through December 31, 2013. The caps for physical and speech therapy (combined) and occupational therapy will be $1,900 for 2013, an increase of $20 from 2012. The manual review process for beneficiaries that reach $3,700 of therapy services was also extended through December 31, 2013.


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Multiple Procedure Payment Reduction Remains in Effect; Reduction to Increase 4/1/13

The Multiple Procedure Payment Reduction (MPPR), which was introduced effective January 1, 2011, remains in effect for 2013. The MPPR cuts the practice component of the fee schedule payment for certain HCPCS codes by 25% when more than one kind of therapy is provided to a resident in a single day. Congress enacted the policy in the Physician Payment and Therapy Relief Act of 2010.

CMS initially proposed a 50% cut, which was then reduced to 25% for services provided in an institutional setting (including SNFs) and 20% for services provided in an office setting. CMS believed that certain activities were being paid for twice even though they are only performed once for a given patient (e.g., greeting the patient, cleaning equipment and providing post-treatment assistance).

The new law also includes a provision increasing the MPPR reduction to 50% beginning on April 1, 2013.  The increased reduction, estimated to save $1.8 billion over ten years, could potentially have a substantial impact on any nursing facilities with active Part B therapy programs.  Various long-term care and therapy trade associations are working to introduce legislation that will avoid the increased reduction.  However, the sequestration and spending cuts were “kicked down the road” for only two months, and the political parties appear to be far apart on compromise regarding spending cuts.  Therefore, any changes that would result in increased federal spending may be difficult to introduce.

The MPPR covers therapy services billed under 44 different HCPCS codes (Always Therapy Codes for MPPR). The last column of the therapy fee schedules provided above shows the payment that would be made under the MPPR for the affected therapy codes.

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IMPORTANT: Part A Coinsurance Bad Debt Reductions

As a reminder, Congress used skilled nursing facility Part A coinsurance reimbursement as a “pay for” in last year’s “doc fix” negotiations.  For cost report periods beginning in federal fiscal year 2013 (October 1, 2012 through September 30, 2013), dual eligible Part A coinsurance bad debts, which have historically been reimbursed at 100%, will only be reimbursed at 88% of the actual amount.  This percentage will decrease further to 76% in FY2014 and 65% in FY2015 and beyond.  Private coinsurance bad debts, currently reimbursed at 70%, will be reduced to 65% on cost reports beginning in FY2013 and beyond.

For a calendar year nursing facility, any “Q codes” written off and included on the Medicare cost report beginning January 1, 2013 will be reimbursed at the reduced percentage.  Therefore, it is imperative that you include as much coinsurance as possible on your 2012 Medicare cost report.  If you have Q codes that were received prior to December 31, 2012, we strongly recommend that you write them off in your 2012 general ledger and include them on your 2012 Exhibit 1 in order to be reimbursed at 100%.  Failure to do so will result in lost reimbursement of at least 12% of the coinsurance amount.  Facilities with June 30 year ends will be impacted by the reductions beginning on July 1, 2013.

It is important to continually monitor your Part A coinsurance bad debts to ensure maximum reimbursement. Some facilities are leaving money on the table and reducing profit unnecessarily by not following CGS requirements. It is imperative that you have a bad debt policy and that you follow the policy prior to writing off any coinsurance bad debts. CGS has stated that they will continue to follow all bad debt policies used by National Government Services.

Common mistakes include not reducing coinsurance amounts claimed by partial payments from ODJFS, failing to remove the coinsurance amount from your aging and the resident accounts receivable history, improperly applying patient liability, and improper use of income statement accounts for recording Medicaid coinsurance bad debts on the general ledger.


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2013 Medicare Part A Coinsurance & Medicare Part B Premium and Deductible

Effective January 1, 2013, the Medicare Part A coinsurance rate for SNFs will increase from $144.50 per day to $148 per day for days 21 through 100. The Part B deductible will increase to $147 per year, up $7 from 2012. The standard Medicare Part B monthly premium for most beneficiaries will be $104.90. This represents a $5 increase for most beneficiaries who currently have the Social Security Administration (SSA) withhold their Part B premium and have incomes of $85,000 or less (or $170,000 or less for joint filers). If income exceeds $85,000 (single) or $170,000 (married filing jointly), the Medicare Part B premium may be higher than $104.90 per month.

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January 1, 2013 Medicaid Rates

With the pricing system changes implemented in H.B. 153, Medicaid rates for all Ohio nursing facilities will change effective January 1, 2013. These rates will be calculated using the average of the June 30, 2012 and September 30, 2012 Medicaid case mix scores. We have provided our cost reporting clients with a “Medicaid Snapshot” analysis that included estimates of their January 1 Medicaid rates. 

In a change from prior years, ODJFS has sent a January 1, 2013 rate setting to all nursing facility providers.  If you would like us to provide you with a more detailed “Medicaid Snapshot” rate estimate, please contact your HW Healthcare Advisor.

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Leave Day Payment Rates Effective January 1, 2013

The reduced leave day payment provisions introduced in H.B. 153 will continue in 2013. Historically, ODJFS paid up to 30 leave days per year at 50% of the facility’s Medicaid rate. Leave days are only to be paid at 50% if the facility has an occupancy of 95% or greater. All facilities with occupancy of less than 95% will be reimbursed only 18% of the facility’s Medicaid rate. Each resident remains eligible for up to 30 leave days in a calendar year.

ODJFS initially calculated the occupancy percentage based on the 2010 Medicaid cost reports. When the 2011 cost reports were available, leave day rates were re-determined for each facility and a retroactive adjustment was made, if necessary.  For 2013 leave days, you will continue to receive the same percentage you were receiving as of December 31, 2012.  When the 2012 cost reports are processed, ODJFS will adjust leave day rates under the same methodology they used in 2012.

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2012 Family Satisfaction Survey Results

The Ohio Department of Aging recently released the results of the 2012 Family Satisfaction Surveys of all nursing facilities in Ohio.  For the first time, ODA allowed families to respond to the survey via either mail or an internet survey tool.  The hope was that the internet tool would increase participation in the survey.  The statewide average score was 85.6%, which was down from 87.93% on the 2010 Family Satisfaction Survey. The highest score statewide was 97.49%.  The overall score, in addition to the results on various questions, will be used in the quality incentive calculations for the July 1, 2013 Medicaid rates.



Paula Z. Reape, CPA, LNHA
(216) 378.7232
Steven C. Anderson, CPA