KX Modifier Explained

KX Modifier ExplainedIt has been my experience there is confusion about how the KX modifier is used. In fact, Medicare has found this too and notified Physical Therapists who were using the KX modifier at a greater rate than their peers in the 2010 Comparative Billing Report (CBR). In this Compliance Chat, I will try to explain the purpose of the KX modifier and instruct Physical Therapists on how to correctly apply the KX modifier when a patient's Medicare Part B has reached the financial limitation as established by the Congress and the Center for Medicare and Medicaid Services. 

Sources: Medicare Claims Processing Manual, Chapter 5 - Part B Outpatient Rehabilitation and CORF/OPT Services, 10.3 Application of Financial Limitations, Issued 10-22-10, effective 01-01-11, implemented 01-03-11. 

By applying the KX modifier, the provider is attesting that services billed:

  • Are reasonable and necessary services that require the skills of a Physical Therapist (see CMS pub 100-2, Chapter 15, section 220.2), and
  • Are justified by appropriate documentation in the medical record, (see CMS pub 100-2, Chapter 15, section 220.3); and
  • Qualify for an exception under the automatic exception process.

The Medicare Beneficiary may qualify for use of the cap exception at any time during the episode of care when documented medically necessary services exceed caps. All covered and medically necessary services qualify for exceptions to the cap, i.e. Physical Therapy. 

Automatic Exception Process 

The term automatic exception process indicates that the claims' processing for the exception is automatic, and not that the exception is automatic. There are no diagnoses codes that automatically qualify for an exception to the cap any longer. Any diagnosis can qualify for an exception to the cap. The key is in the therapist's ability to document the medical necessity of the care being provided. 

Medicare Exception to the Part B Cap 

An exception to the Medicare Part B Cap may be made when the patient's condition is justified by documentation indicating that the beneficiary requires continued skilled Physical Therapy, i.e., therapy beyond the amount payable under the therapy cap, to achieve their prior level of function or maximum functional level is expected within a reasonable period of time. 

Documentation justifying services must be submitted in response to any Additional Documentation Request (ADR) for claims that are selected for medical review. Follow the documentation requirements in CMS pub 100-2, chapter 15, Section 220.3. If medical records are selected for review, clinicians may include at their discretion, a summary that specifically addresses the justification for the therapy cap exception. I would highly recommend to you that you provide a summary with all ADR's regardless of the circumstances. 

In making a decision to utilize the automatic exception process the clinician must consider whether services are appropriate to:

  • The patient's condition including diagnosis, complexities, and severity;
  • The service provided including the type, frequency, and duration;
  • The interactions of current active conditions and complexities that directly and significantly influence the treatment such that it causes the services to exceed the cap.

Medicare feels it is very important to recognize that most conditions would not ordinarily result in services exceeding the cap. Use the KX modifier only in cases where the condition of the individual patient is such that services are appropriately provided in an episode of care that exceeds the cap. Routine use of KX modifier for all patients will likely show up on data analysis as aberrant and invite inquiry. Be sure that documentation is sufficiently detailed to support the use of the modifier. 

Notice to Beneficiaries 

Providers must notify beneficiaries of the financial limitations at their first therapy encounterwith the beneficiary. After the cap is exceeded, voluntary notice via provider's own form or the ABN, (Advanced Beneficiary Notice of Non-coverage), is appropriate, even when services receive an exception from the cap. 

To summarize,

  1. It is certainly appropriate to use the KX modifier for patients that require an extended episode of care.
  2. Any diagnosis can qualify for use of the KX modifier.
  3. There are no automatic exceptions to the cap.
  4. The key to applying the KX modifier is in having the documentation to justify the medical necessity of the care you are providing.
  5. It is also important to monitor the use of the KX modifier in you clinic and to audit to make sure the documentation is there before Medicare asks for it. 

As always, thank-you for reading Compliance Chat. Let me recommend ChartSafe to you which is our web-based chart auditing tool. We took the time to design ChartSafe to meet the Medicare documentation guidelines referenced above as well as the guidelines of many other insurance carriers. 

Tags: Compliance Plan