2018 Therapy Cap as of January 29, 2018

January 29, 2018
Rick Gawenda

The House of Representatives and the Senate have failed to act to pass legislation to either repeal the outpatient therapy cap or to extend the therapy cap exception process for Medicare beneficiaries receiving outpatient physical and/or occupational therapy as well as speech-language pathology services in calendar year 2018. So what does this mean for providers of therapy services and their Medicare beneficiaries who started receiving outpatient therapy services the first week of 2018 and continue those services this week (week of January 29, 2018) and may exceed the $2010.00 hard therapy cap? Here is the latest!

If a Medicare beneficiary began outpatient physical therapy and speech therapy on January 2, 2018 in the locality of Detroit, Michigan and attended 3 sessions per week (ie. Tuesday, Thursday and Friday), by January 25, 2018 (Thursday) , they would have had 11 sessions of each discipline. Lets say each session, the physical therapist billed 2 units of therapeutic exercise (CPT code 97110), 1 unit of gait training (CPT code 97116) and 1 unit of therapeutic activities (CPT code 97530) and the speech-language pathologist billed 1 unit of the treatment of speech, language voice, communication and/or auditory processing disorder (CPT code 92507). Using the locality of Detroit, MI, the Medicare allowed amount for these charges that would be applied to the combined physical and speech therapy cap of $2010.00 would be $183.60 each visit. Multiply $183.60 by 11 visits and the Medicare beneficiary would have used $2,019.60.

If these therapy services were being provided in a non outpatient hospital setting (ie. SNF Part B, rehabilitation agency, critical access hospital, home health doing Part B in the home, comprehensive outpatient rehabilitation facility, and a private practice), these providers would have to provide the Medicare beneficiary with an advance beneficiary notice of noncoverage (ABN) if they were going to continue with physical and/or speech therapy after the 11th visit due to the hard therapy cap of $2010 and no therapy cap exception process in place. Whether or not you continue to submit claims to your Medicare Administrative Contractor would be dependent on which option the Medicare beneficiary selected in Section G of the ABN form. Check out my ABN FAQs by clicking HERE.

In this situation where a Medicare beneficiary has reached the therapy cap in a non outpatient hospital setting and still requires therapy services, a Medicare beneficiary could continue with physical and/or speech therapy services at an outpatient hospital and have the medically necessary therapy services paid for by the Medicare program since outpatient hospitals are exempt from the therapy cap. In this situation, an ABN would not be required to be given to the Medicare beneficiary. To read the exemption for an outpatient hospital, click HERE.

The Centers for Medicare and Medicaid Services (CMS) has released guidance on their process for therapy claims submitted with the KX modifier. To access the CMS guidance, click HERE.

Click Here to access my 2018 therapy cap FAQs.

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This article is not intended to and does not serve as legal advice or as consultative services, but is for general information purposes only.

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  1. Is there a possibility of the therapy cap being reinstated in outpatient hospital in 2018?

  2. We are being told to continue to apply the KX modifier once the pt reaches the cap, and Medicare will hold the claims in case the cap exception process is put back into place. If no KX then they will be automatically denied. Are you suggesting that? Can you then still give the patient an ABN and ask them to pay out of pocket for the services, and refund if we get paid by Medicare?


    1. I am not giving any suggestions or advice in this format. In this article, you see what CMS is suggesting.

  3. In your article, it is stating that we should provide a Medicare beneficiary with an ABN if they are going to continue with therapy once they reach the hard therapy cap of $2010. Per the CMS guidance, the KX modifier should be utilized as was done before with an ABN only being issued when services are not medically necessary. Can you clarify or provide further guidance?

    1. CMS is not stating to use the KX modifier. They are stating they will hold claims containing the KX modifier for a rolling hold of 20 days in case Congress enacts legislation regarding the therapy cap. If using the KX modifier, you are attesting therapy is still medically necessary.

  4. I’m confused on the use of the ABN. We understood an ABN would only be used prior to providing therapy that we deem to “not be medically necessary” but the Medicare patient still wants. We understood that we should not use the ABN when delivering medically necessary care. You didn’t seem to address the ABN use per Sandra Ambrose’s question so I’m still confused on the ABN use. Can you please clarify?

  5. Rick, a somewhat related question. Does a HHC agency providing outpatient therapy visits need to satisfy the HHC COP? The HHC COP (particularly since they have evolved mid-January) makes for significant operational/documentation burden that standalone, agency outpatient providers do not have to satisfy. Any insight here? Thanks

    1. My opinion is that the HHA must comply with the CoPs as they are written whether under Part A benefits or Part B benefits unless otherwise noted. You can also contact the Home Health Section of APTA or APTA for further clarification.

  6. I am in a hospital outpatient setting. My concern is what might happen if our patients exceed to cap and at some point later this year congress votes to include hospital outpatient facilities back under the cap. Would CMS come back to us and deny payment for services above the cap?

    1. As I’m sure you know, I can’t predict what will occur in the future and what may or may not happen.