Glossary of Medicare Terms

Warning: The Glossary of Terms is meant to provide simple definitions of common Medicare terms for informational purposes only. It is not meant to represent specific Medicare requirements. Medicare makes changes to rules and regulations frequently. While we make every attempt to ensure the accuracy of the information, Clinicient makes no guarantee that it is the most up-to-date information available from Medicare.

Acronym Full Name Definition
  8 Minute Rule

Refers to the Centers for Medicare and Medicaid Services (CMS) clarification on aggregating timed 15 minute procedures:

  • No procedure is billable unless at least 8 minutes of skilled therapy is provided.
  • Number of units may not exceed total contact time.

The total number of timed units that can be billed is constrained by the total treatment minutes spent providing timed services. Refer to Aggregated Timed Units for more information.

  59 Modifiers Used to identify procedures and services that are not normally reported together, but are appropriate under the circumstances.
ABN Advanced Beneficiary Notice (ABN) Used when the physician/practitioner believes that Medicare may not make payment. In some instances, an ABN can be used to inform the beneficiary they may have to pay out-of-pocket for treatment. See Advanced Beneficiary Notices (ABNs) for more information.
  Annual Limits The total benefits (in dollars) Medicare will pay in a year while an individual is enrolled.
  Attestation Statement Must be signed and dated by the author of the medical record entry and must contain sufficient information to identify the beneficiary in order to be considered valid for Medicare medical review purposes.
CCI Correct Coding Initiative The Medicare National Correct Coding Initiative (also known as CCI) was implemented to promote national correct coding methodologies and to control improper coding leading to inappropriate payment.
  CCI Edits CCI code pair edits are automated prepayment edits that prevent improper payment when certain codes are submitted together for Part B - covered services.
CERT Comprehensive Error Rate Testing

A program to measure improper payments made in the Medicare fee-for-service (FFS) program. The program:

  • Identifies and reports “MAC” error rate quarterly.
  • Reviews a small sampling claims from provider.
  • Determines claims paid in error.
  • Notifies contractor of payment error and contractor collects from provider.
  • Used by other Program Integrity (PI) contractors to identify topics and areas of concern.
  Certification Certification is required for the duration of the Plan of Care, or 90 calendar days from the date of initial treatment, whichever is less.
CMS Centers for Medicare & Medicaid Services The federal body responsible for administering Medicare and Medicaid programs.
CORF Comprehensive Outpatient Rehab Facility A medical facility that is specially certified by Medicare to provide outpatient diagnostic, therapeutic, and restorative services for the rehabilitation of an injury, disability, or sickness.
  Daily Note Documentation of a visit or encounter, often called a progress note or daily note. Documents sequential implementation of the Plan of Care established by the physical therapist, including changes in patient/client status and variations and progressions of specific interventions used. Also may include specific plans for the next visit or visits.
  Discharge or Discontinuation Summary

Documentation to summarize progression toward goals and discharge plans. Required following conclusion of the current episode in the physical therapy intervention sequence. Documentation of discharge or discontinuation should include the following elements:

  • Current physical/functional status
  • Degree of goals achieved and reasons for goals not being achieved
  • Discharge/discontinuation plan related to the patient/client's continuing care
  Exceptions An exception process to the therapy cap that allows providers to receive payment from Medicare for services above the therapy cap amount. To be eligible, the Therapy provided must always be reasonable and medically necessary, require the specialized skills of medical professional, and be justified by supporting documentation in the patient’s medical record. (See Therapy Cap for more information.)
FCA False Claim Act Imposes liability on any person who submits a claim to the federal government that he or she knows (or should know) is false. It allows the government to recoup its monetary losses due to fraud and to penalize the wrongdoer by awarding triple damages.
  KX Modifiers Used in the Medicare therapy cap exception process. The KX modifier on a claim indicates that the requirements for an exception to the therapy cap have been met. Claims that exceed the therapy cap and do not include the KX modifier will be denied.
MAC Medicare Administrative Contracor

Private companies that contract to process claims for Medicare.

  • Make payments
  • Provide beneficiary education and assistance
  • Provide consultative services ◾Communicate with providers
MRAP Medicare Recovery Audit Program Created by the Affordable Care Act, the Medicaid Recovery Audit Program helps states identify and recover improper Medicaid payments. It is largely self-funded, paying independent auditors a contingency fee out of any improper payments they recover that took place in the previous three years.
  Medical Necessity To be reimbursed by Medicare, treatment must be reasonable and necessary. To be reasonable and necessary, services must meet acceptable standards of medical practice and be of a level of complexity and sophistication or the condition of the patient shall be such that the services required can be safely and effectively performed only by a therapist.
  MR Edits MR Edits are coded system logic that either automatically pays all or part of a claim, automatically denies all or part of a claim, or suspends all or part of a claim so that a trained clinician or claims analyst can review the claim and associated documentation (including documentation requested after the claim is submitted) in order to make determinations about coverage and payment under Section 1862(a) (1) (A) of the Act.
MIP Medicare Integrity Program

Program under CMS to prevent and reduce provider fraud, waste, and abuse.

  • Hire contractors to review Medicaid provider activities, audit claims, identify overpayments, and educate on Medicaid program integrity issues.
  • Support and assist states to combat Medicaid provider fraud and abuse.
  • Eliminate and recover improper payments.
  Medicare Part A Medicare Part A generally covers hospital inpatient services. This includes stays in a hospital or nursing facility. It also pays for some home care and hospice.
  Medicare Part B Medicare Part B pays for outpatient medical care, such as doctor's visits, home health services, some laboratory tests, some medications, and some medical equipment.
MMR Manual Medicare Review

Mandated by the "Middle Class Tax Relief and Job Creation Act of 2012" and extended by the "American Taxpayer Relief Act of 2012", it establishes a manual medical review process for Medicare Part B therapy services. It requires any therapy claims for combined speech-language pathology and physical therapy that reach $3,700 to be reviewed for medical necessity. The $3,700 threshold includes the total allowed charges for services furnished by independent practitioners and all institutional services under Medicare Part B (i.e., hospital outpatient departments, skilled nursing facilities, critical access hospitals).

  Modifiers Special codes attached to charge codes on claims to provide clarification about the service.
MPPR Multiple Procedure Payment Reduction MPPR reduces payment for Practice Expense (PE) from Medicare for the second and subsequent therapy procedures furnished to the same patient on the same day. Beginning April 1, 21013 MPPR increases to 50%, up from 20% for office settings and 25% for facility settings.
NCCI Edits National Correcting Code Initiative (NCCI) A CMS program designed to prevent improper payment of procedures that should not be submitted together.
PC Plan Certification Plan Certification is the approval by the referring physician of a Plan of Care (POC) established by the therapist. The POC must be approved within 30 days and a signed POC approval must be kept on file.
POC Plan of Care

Outpatient rehabilitation therapy services must relate directly and specifically to a written Plan of Care. The POC should provide for treatment in the most effective and efficient manner for the best achievable outcome. The Plan of Care, at a minimum, should contain:

  • Diagnoses
  • Long-term treatment goals
  • Type of rehabilitation therapy
  • Amount of therapy – number of treatment sessions in a day;
  • Duration of therapy – number of weeks or number of treatment sessions; and
  • Frequency of therapy – number of treatment sessions in a week.

The signature and professional identity of the person who established the Plan of Care and the date it was established must be recorded with the Plan of Care.

  Manual Medical Review - Prepayment Review and Post Payment Review

Per beneficiary, services above $3,700 for PT and SLP services combined and/or $3,700 for OT services are subject to manual medical review (MMR). Under MMR, Recovery Auditors will complete two types of review.

Prepayment Review:

  • Claims submitted in states participating in Recovery Audit Prepayment Review Demonstration will be reviewed on a prepayment basis. These states are: Florida, California, Michigan, Texas, New York, Louisiana, Illinois, Pennsylvania, Ohio, North Carolina and Missouri.
  • In these states, the MAC will send an Additional Development Request (ADR) to the provider requesting the additional documentation be sent to the Recovery Auditor (unless another process is used by the MAC and the Recovery Auditor).
  • The Recovery Auditor will conduct manual medical review within 10 business days of receiving the additional documentation and will notify the MAC of the payment decision.

Postpayment Review:

  • In the remaining states, CMS will grant an exception for all claims with a KX modifier and pay the claim upon receipt. The Recovery Auditors will then conduct postpayment manual medical review on the claim.
  • In these states, the Recovery Auditor will request additional documentation and conduct postpayment review and will notify the MAC of the payment decision.
  Postpayment Review Postpayment review occurs when a reviewer makes a claim determination after the claim has been paid. Postpayment review results in either no change to the initial determination or a “revised determination” indicating that an overpayment or underpayment has occurred.
  Prepayment Review Prepayment review occurs when a reviewer makes a claim determination before claim payment has been made. Prepayment review always results in an “initial determination.”
PR Progress Report

A Progress Report provides justification for the medical necessity of treatment. Components of Progress Reports:

  • Assessment of improvement
  • Plan for continuing treatment
  • Changes to long or short term goals
  • The patient’s condition
  • Maximum improvement is yet to be obtained
RAC Recovery Audit Contractors

RACs are Independent collections agencies that are contracted by Medicare to recover improper payments.

  • Detect and recover improper payments under fee-for-service Medicare plans
  • Review claims
  • Can go three years back from the date the claim was paid
  • Now handle MMR.
  Referral A written order from a primary care doctor for a patient to see a specialist or get certain medical services (like physical therapy).
SOAP Subjective Objective Assessment and Plan Notes

A structured format for documenting the progress of a patient during treatment. It includes:

  • Subjective Information: Information gained from the patient’s self-report.
  • Objective Information: Results of tests, measurements, and procedures
  • Assessment: the interpretation of Subjective and Objective information.
  • Plan: The plan of treatment.
  Therapy Cap The statutory Medicare Part B outpatient therapy cap for Occupational Therapy (OT) is $1,920 for 2014, and the combined cap for Physical Therapy (PT) and Speech-Language Pathology Services (SLP) is also $1,920 for 2014. Exceptions to the therapy cap are allowed for reasonable and necessary therapy services. Per beneficiary, services above $3,700 for PT and SLP services combined and/or $3,700 for OT services are subject to manual medical review.
  UB-04 Uniform Billing form. Also known as the Form CMS-1450, is the uniform institutional provider hard copy claim form suitable for use in billing multiple third party payers.
ZPIC Zone Program Integrity Contractors

Independent fraud investigators for CMS.

  • Paid to identify alleged overpayment(s).
  • Perform pre-payment and post-payment reviews.
  • Can recommend suspensions of payment.
  • Recommend Recovery of Federal Funds through Administrative Action.
  • Refer cases to Law Enforcement.
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