Therapy Caps
https://www.cms.gov/Medicare/Billing/TherapyServices/index.html?redirect=/TherapyServices
Latest Applicable Legislation/Law: This section was last updated to include revisions to Medicare law for therapy caps, and related provisions, through Section 202 of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). MACRA extended the therapy caps exceptions process through December 31, 2017 and modified the requirement for manual medical review for services over the $3,700 therapy thresholds. MACRA also extended the application of the therapy caps, and related provisions, to outpatient hospitals until January 1, 2018.
Under Medicare Part B, the annual limitations on per beneficiary incurred expenses for outpatient therapy services are commonly referred to as “therapy caps.” The therapy caps amounts are determined on a calendar year (CY) basis which means that all beneficiaries begin a new cap each year. For CY 2015, the limit on incurred expenses is $1,940 for physical therapy (PT) and speech-language pathology services (SLP) combined. There’s another limit of $1,940 for occupational therapy (OT) services. Deductible and coinsurance amounts paid by the beneficiary for therapy services count toward the amount applied to the limit.
With the passage of MACRA, an “exceptions process” to the therapy caps is currently in effect for the remainder of CY 2015 and for all of CY 2016 and CY 2017. For services furnished during a calendar year that exceed the therapy caps, with an exceptions process in place, providers and practitioners may request an exception on a beneficiary’s behalf when those services are reasonable and necessary. To indicate this medical necessity, the therapy provider or practitioner is required to add a KX modifier to the claim for each applicable service. By using the KX modifier, the provider attests that the services are both (a) reasonable and necessary and (b) that there is documentation of medical necessity in the beneficiary’s medical record. Manual policies relevant to the exceptions process apply only when exceptions to the therapy caps are in effect.
The therapy caps exceptions process applies an annual manual medical review (MMR) requirement when a beneficiary’s incurred expenses reaches a threshold of $3,700. Each beneficiary’s incurred expenses apply towards the MMR thresholds in the same manner as it applies to the therapy caps. There’s one threshold for PT and SLP services combined and another threshold for OT services. Now, through MACRA, not all claims exceeding the thresholds are subject to MMR as they were before. The MMR is currently in effect through December 31, 2017 for some claims over the $3,700 thresholds. For a general overview of the medical review process, go to the Medical Review and Education website. For more information on the MMR of therapy claims above the $3,700 thresholds, visit the Medical Review and Education website’s Therapy Cap section.
