CMS Pub. 100-04, ch. 5, § 10

Rehabilitation Facility (CORF) Services - General

(Rev. 3454, Issued: 02-04-16, Effective: 07-01-16, Implementation: 07-05-16)

Language in this section is defined or described in Pub. 100-02, chapter 15, sections 220

and 230.

Section §1834(k)(5) to the Social Security Act (the Act), requires that all claims for

outpatient rehabilitation services and comprehensive outpatient rehabilitation facility

(CORF) services, be reported using a uniform coding system. 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 Act also requires 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), also known as rehabilitation

agencies;

• 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.

Section 143 of the Medicare Improvements for Patients and Provider’s Act of 2008

(MIPPA) authorizes the Centers for Medicare & Medicaid Services (CMS) to enroll

speech-language pathologists (SLP) as suppliers of Medicare services and for SLPs to

begin billing Medicare for outpatient speech-language pathology services furnished in

private practice beginning July 1, 2009. Enrollment will allow SLPs in private practice to

bill Medicare and receive direct payment for their services. Previously, the Medicare

program could only pay SLP services if an institution, physician or nonphysician

practitioner billed them.

In Chapter 23, as part of the CY 2009 Medicare Physician Fee Schedule Database, the

descriptor for PC/TC indicator “7”, as applied to certain HCPCS/CPT codes, is described

as specific to the services of privately practicing therapists. Payment may not be made if

the service is provided to either a hospital outpatient or a hospital inpatient by a physical

therapist, occupational therapist, or speech-language pathologist in private practice.

The MPFS is used as a method of payment for outpatient rehabilitation services furnished

under arrangement with any of these providers.

In addition, the MPFS is used as the payment system for CORF services identified by the

HCPCS codes in §20. Assignment is mandatory.

Services that are paid subject to the MPFS are adjusted based on the applicable payment

locality. Rehabilitation agencies and CORFs with service locations in different payment

localities shall follow the instructions for multiple service locations in chapter 1, section

170.1.1.

The Medicare allowed charge for the services is the lower of the actual charge or the

MPFS amount. The Medicare payment for the services is 80 percent of the allowed

charge after the Part B deductible is met. Coinsurance is made at 20 percent of the lower

of the actual charge or the MPFS amount. The general coinsurance rule (20 percent of

the actual charges) does not apply when making payment under the MPFS. This is a final

payment.

The MPFS does not apply to outpatient rehabilitation services furnished by critical access

hospitals (CAHs) or hospitals in Maryland. CAHs are to be paid on a reasonable cost

basis. Maryland hospitals are paid under the Maryland All-Payer Model.

Contractors process outpatient rehabilitation claims from hospitals, including CAHs,

SNFs, HHAs, CORFs, outpatient rehabilitation agencies, and outpatient physical therapy

providers for which they have received a tie in notice from the Regional Office (RO).

These provider types submit their claims to the contractors using the ASC X12 837

institutional claim format or the CMS-1450 paper form when permissible. Contractors

also process claims from physicians, certain nonphysician practitioners (NPPs),

therapists in private practices (TPPs), (which are limited to physical and occupational

therapists, and speech-language pathologists in private practices), and physician-directed

clinics that bill for services furnished incident to a physician’s service (see Pub. 100-02,

Medicare Benefit Policy Manual, chapter 15, for a definition of “incident to”). These

provider types submit their claims to the contractor using the ASC X 12 837 professional

claim format or the CMS-1500 paper form when permissible.

There are different fee rates for nonfacility and facility services. Chapter 23 describes the

differences in these two rates. (See fields 28 and 29 of the record therein described).

Facility rates apply to professional services performed in a facility other than the

professional’s office. Nonfacility rates apply when the service is performed in the

professional’s office. The nonfacility rate (that is paid when the provider performs the

services in its own facility) accommodates overhead and indirect expenses the provider

incurs by operating its own facility. Thus it is somewhat higher than the facility rate.

Contractors pay the nonfacility rate on institutional claims for services performed in the

provider’s facility. Contractors may pay professional claims using the facility or

nonfacility rate depending upon where the service is performed (place of service on the

claim), and the provider specialty.

Contractors pay the codes in §20 under the MPFS on professional claims regardless of

whether they may be considered rehabilitation services. However, contractors must use

this list for institutional claims to determine whether to pay under outpatient

rehabilitation rules or whether payment rules for other types of service may apply, e.g.,

OPPS for hospitals, reasonable costs for CAHs.

Note that because a service is considered an outpatient rehabilitation service does not

automatically imply payment for that service. Additional criteria, including coverage,

plan of care and physician certification must also be met. These criteria are described in

Pub. 100-02, Medicare Benefit Policy Manual, chapters 1 and 15.

Payment for rehabilitation services provided to Part A inpatients of hospitals or SNFs is

included in the respective PPS rate. Also, for SNFs (but not hospitals), if the beneficiary

has Part B, but not Part A coverage (e.g., Part A benefits are exhausted), the SNF must

bill for any rehabilitation service.

Payment for rehabilitation therapy services provided by home health agencies under a

home health plan of care is included in the home health PPS rate. HHAs may submit bill

type 34X and be paid under the MPFS if there are no home health services billed under a

home health plan of care at the same time, and there is a valid rehabilitation POC (e.g.,

the patient is not homebound).

An institutional employer (other than a SNF) of the TPPs, or physician performing

outpatient services, (e.g., hospital, CORF, etc.), or a clinic billing on behalf of the

physician or therapist may bill the contractor on a professional claim.

The MPFS is the basis of payment for outpatient rehabilitation services furnished by

TPPs, physicians, and certain nonphysician practitioners or for diagnostic tests provided

incident to the services of such physicians or nonphysician practitioners. (See Pub. 100-

02, Medicare Benefit Policy Manual, Chapter 15, for a definition of “incident to,

therapist, therapy and related instructions.") Such services are billed to the contractor on

the professional claim format. Assignment is mandatory.

The following table identifies the provider and supplier types, and identifies which claim

format they may use to submit claims for outpatient therapy services to the contractor.

“Provider/Supplier Service”

Type

Format Bill Type Comment

Inpatient SNF Part A Institutional 21X Included in PPS

Inpatient hospital Part B Institutional 12X Hospital may obtain services

under arrangements and bill, or

rendering provider may bill.

Inpatient SNF Part B

(audiology tests are not

included)

Institutional 22X SNF must provide and bill, or

obtain under arrangements and

bill.

Outpatient hospital Institutional 13X Hospital may provide and bill

or obtain under arrangements

and bill.

Outpatient SNF Institutional 23X SNF must provide and bill or

obtain under arrangements and

bill.

HHA billing for services not

rendered under a Part A or

Part B home health plan of

care, but rendered under a

therapy plan of care.

Institutional 34X Service not under home health

plan of care.

Outpatient physical therapy

providers (OPTs), also known

as rehabilitation agencies

Institutional 74X Paid MPFS for outpatient

rehabilitation services.

Comprehensive Outpatient

Rehabilitation Facility

(CORF)

Institutional 75X Paid MPFS for outpatient

rehabilitation services and all

other services except drugs.

Drugs are paid 95% of the

AWP.

Physician, NPPs, TPPs,

(therapy services in hospital

or SNF)

Professional See Chapter

26 for place

of service

coding.

Payment may not be made for

therapy services to Part A

inpatients of hospitals or SNFs,

or for Part B SNF residents.

NOTE: Payment may be made

to physicians and NPPs for

their professional services

defined as “sometimes therapy”

(not part of a therapy plan) in

certain situations; for example,

when furnished to a beneficiary

“Provider/Supplier Service”

Type

Format Bill Type Comment

registered as an outpatient of a

hospital.

Physician/NPP/TPPs office,

or patient’s home

Professional See Chapter

26 for place

of service

coding.

Paid via MPFS.

Critical Access Hospital -

inpatient Part B

Institutional 12X Rehabilitation services are paid

at cost.

Critical Access Hospital –

outpatient Part B

Institutional 85X Rehabilitation services are paid

at cost.

For a list of the outpatient rehabilitation HCPCS codes see §20.

If a contractor receives an institutional claim for one of these HCPCS codes with dates of

service on or after July 1, 2003, that does not appear on the supplemental file it currently

uses to pay the therapy claims, it contacts its professional claims area to obtain the nonfacility price in order to pay the claim.

NOTE: The list of codes in §20 contains commonly utilized codes for outpatient

rehabilitation services. Contractors may consider other codes on institutional claims for

payment under the MPFS as outpatient rehabilitation services to the extent that such

codes are determined to be medically reasonable and necessary and could be performed

within the scope of practice of the therapist providing the service.