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On Jan. 16, CHA submitted a comment letter to the California Department of Tax and Fee Administration (CDTFA) on its proposed amendments that would clarify how sales and use tax is applied to medical items furnished by hospitals.

In the letter, CHA urges CDTFA not to change its current policy that treats hospitals as retailers and to convene a small workgroup to fully understand the ramifications of the proposed changes. CHA also identifies complexities that would result from the proposal as currently written, including that it would require auditors to use confidential patient medical records to determine taxability.

CDTFA has acknowledged it will not apply the proposed rule to hospital claims for services rendered prior to Jan. 1, and will resume processing all claims that have been on hold. Should CDTFA finalize these changes, CHA also urges CDTFA to replace the proposal’s effective date of Jan. 1, 2019, with a prospective date so that hospitals have time to prepare.

In All Facilities Letter 19-03, the California Department of Public Health outlines requirements for a federal grant available to skilled-nursing and nursing facilities.

The grant funding will come from federal civil monetary penalties issued when a facility is out of compliance with one or more Medicare or Medicaid participation requirements. Through the grant process, the funds are reinvested to support activities that benefit patients’ quality of life.

Requirements for billing outpatient physical therapy (PT), occupational therapy (OT) and speech language pathology (SLP) services have changed as of Jan. 1.   

G-Codes
Providers of outpatient (Part B) PT, OT and SLP services are no longer required to include functional status reporting (G-codes) for services provided on or after Jan. 1. While providing the G-codes is no longer required for payment, CMS is retaining the set of 42 non-payable HCPCS G-codes until calendar year (CY) 2020. This is intended to allow time for therapy providers and other private insurers who currently use the codes for functional reporting to update their billing systems and policies, and to ensure claims that inadvertently contain any of these G-codes during 2019 are not unnecessarily returned or rejected. 

Elimination of Therapy Caps: Use of “KX” modifier
The Balanced Budget Act (BBA) of 2018 repealed the Medicare annual per beneficiary caps on PT, OT and SLP. Previously, therapy providers were required to use the “KX” modifier when annual per beneficiary expenditures exceed $2,010 for PT and SLP services combined, and $2,010 for OT services. However, while the caps have been eliminated, the new law requires that providers continue to include a modifier on the Medicare claim once the prior therapy cap amounts have been reached. Therapists must continue to track total claim amounts for Medicare beneficiaries and apply the “KX” modifier to claims that exceed the $2,100 threshold, as confirmation that the services are medically necessary as documented in the medical record. 

Payment for Outpatient PT and OT Services Furnished by Therapy Assistants
The BBA of 2018 also included a provision reducing payment to therapy services furnished in whole or part by a PT or OT assistant to 85 percent of the physician fee schedule (PFS) amount beginning on Jan. 1, 2022. CMS finalized two modifiers, one to identify services furnished in whole or in part by PT assistants and the other to identify services furnished in whole or in part by OT assistants. CMS anticipates addressing therapy assistant modifiers and the 10 percent standard, including their application in different scenarios and types of services, more specifically in CY 2020 rulemaking.