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Congress Lifts Medicare Therapy Limits

On February 9, 2018, Congress enacted a permanent solution to the hard cap on outpatient therapy services under Medicare Part B, ending a cycle of short-term fixes that have been necessary since its introduction in 1997 as part of the Balanced Budget Act.

The legislation that has been enacted provides a fix for the therapy cap by permanently extending the current exceptions process. Among the provisions included in the new policy:

  • The therapy cap limits for 2018 remain at $2,010 for physical therapy (PT) and speech-language pathology (SLP) services combined and $2,010 for occupational therapy (OT) services.
  • Claims that go above $2,010 (adjusted annually) still will require the use of the KX modifier for attestation that services are medically necessary.
  • The threshold for targeted medical review will be lowered from the current $3,700 to $3,000 through 2027; however, CMS will not receive any increased funding to pursue expanded medical review, so the overall number of targeted medical reviews is not expected to increase.
  • Claims that go above $3,000 will not automatically be subject to targeted medical review. Instead, only a percentage of providers who meet certain criteria will be targeted, such as those who have had a high claims denial percentage or have aberrant billing patterns compared with their peers.

Physical, speech and occupational therapists need to be cautioned that by affixing the KX modifier, the therapist is making an attestation to the Federal government that the therapy is medically necessary and that there is documentation in the medical record to support the medical necessity.

The legislation also directs CMS to create a modifier for tracking use of Medicare services provided by physical therapy and occupational therapy assistants in 2019 in an effort to collect enough data in 2020 to come up with a Medicare fee schedule rate that's 85% of the fees paid to physical, speech and occupational therapists by 2022.

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