2018 Therapy Cap as of February 5, 2018

February 5, 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 February 5, 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.

Therapy services provided in an outpatient hospital are exempt from the 2018 therapy cap and the dollar amount accumulated in an outpatient hospital do not count towards the Medicare beneficiaries annual therapy cap dollar threshold. This could include therapy provided in an outpatient therapy department, offsite facility that is provider based, hospital emergency department, observation status Medicare patient and a Medicare beneficiary who has exhausted all of their Part A benefits and is having the inpatient therapy they are receiving billed under their Part B benefits

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 any way that you could provide an example of how to fill out the ABN form R-131 with suggestions on what to document in box E, Box F. Would you document in box E that they have exceeded the hard Medicare cap of $2010? And then how are you to estimate the cost? From my understanding these need to be filled out once per year? Final question… after reading the CMS guidance section, it sounds like they are looking at Kx modifiers and using them. Since we are a CAH, should we apply Kx modifiers and have fill out an ABN? I understand that you said there is no exemption process currently, but then the CMS section muddies the waters for me.

    1. Due to liability reasons, I can’t tell you or your organization what to do and how to submit your claims. I just provide the information for you.

  2. Is there still a chance that something could change by end of day Friday? or is this the final decision?

    1. This is the status of the therapy cap as of February 5, 2018. We fully expect Congress to address the therapy cap either this week or in the very near future.

  3. Thanks Rick. So, the CMS guidance on claims submitted with a KX would be held for 20 days and then processed – and denied since there is no exception process? Just trying to understand this.

  4. One more question Rick. A client ask if they can privately pay for outpatient services once they reach their cap. I believe that we cannot unless we have them compete the ABN and then have the services denied by Medicare, in this case because they reached their cap. Am I correct in this assertion?

  5. If Senate approves to either pass the repeal or extend the therapy cap exception process AFTER claims with KX Modifier have already denied, and we have a signed ABN form, will we be able to retro-actively request denied claims be reprocessed under the newly approve therapy cap guidelines? Or if claims are submitted and denied prior to a determination by Senate will the denials be upheld regardless?

    1. If the Senate and House both agree to repeal the therapy cap, it would be retroactive to January 1, 2018 as the bill is currently written. This would mean you would have to resubmit claims if necessary.

  6. A couple questions, and if you addressed this and I missed it I apologize….
    #1 if a beneficiary is in a Skilled Nursing Facility receiving Part B therapy I didn’t believe that they could go anywhere else for therapy above the cap limits r/t consolidated billing? Is that correct?

    #2 If a beneficiary resides in an Assisted Living facility and reaches the cap limit…they should be able to to outpatient hospital therapy and Medicare would pay….is that correct? Can that hospital outpatient therapy be a Critical Access Hospital?

    1. Question #1: Yes
      Question #2: Yes for outpatient hospital, but no for critical access hospital