The CMS chose HCPCS (Healthcare Common Procedure Coding
System) as the coding system to be used for the reporting of these services. This coding
requirement is effective for all claims for outpatient rehabilitation services and CORF services
submitted on or after April 1, 1998.
The BBA also required payment under a prospective payment system for outpatient
rehabilitation services including CORF services. Effective for claims with dates of service on or
after January 1, 1999, the Medicare Physician Fee Schedule (MPFS) became the method of
payment for outpatient therapy services furnished by:
Comprehensive outpatient rehabilitation facilities (CORFs);
Outpatient physical therapy providers (OPTs);
Other rehabilitation facilities (ORFs);
Hospitals (to outpatients and inpatients who are not in a covered Part A stay);
Skilled nursing facilities (SNFs) (to residents not in a covered Part A stay and to
nonresidents who receive outpatient rehabilitation services from the SNF); and
Home health agencies (HHAs) (to individuals who are not homebound or otherwise are
not receiving services under a home health plan of care (POC)).
NOTE: No provider or supplier other than the SNF will be paid for therapy services during the
time the beneficiary is in a covered SNF Part A stay. For information regarding SNF
consolidated billing see chapter 6, section 10 of this manual.
Similarly, under the HH prospective payment system, HHAs are responsible to provide, either
directly or under arrangements, all outpatient rehabilitation therapy services to beneficiaries
receiving services under a home health POC. No other provider or supplier will be paid for these
services during the time the beneficiary is in a covered Part A stay. For information regarding
HH consolidated billing see chapter10, section 20 of this manual.
The MPFS is used as a method of payment for outpatient rehabilitation services furnished under
arrangement with any of these providers.
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