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Congress Repeals Medicare Therapy Cap

by • February 9, 2018 • 138 Comments

In the early morning hours of February 9, 2018, the United States Senate and House of Representatives both passed legislation that repeals the outpatient therapy cap; however, changes payment rates for services provided by a physical therapist assistant and/or occupational therapy assistant to Medicare beneficiaries receiving outpatient therapy services. In addition, the legislation also makes changes to the Home Health Agencies and Part A home health services. President Trump signed the bill into law early Friday morning.

The therapy cap repeal is effective with dates of services on and after

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138 thoughts on “Congress Repeals Medicare Therapy Cap”

  1. Justin Hammer says:

    Thank you for your timely update!

  2. Sue Condon says:

    Does this KX modifier and threshold of $3000 apply to all outpatient providers in all practice settings? Previously hospital based outpatient services were omitted. Is this still the case or not?

    1. Rick Gawenda says:

      All settings including hospital outpatient settings.

  3. Does this mean no more kx and no limits?

    1. Rick Gawenda says:

      Please log in to rad the article for the answer to your questions.

  4. Tracey Mauney says:

    Rick, Just to clarify – there is still no “manual medical review” that we send anywhere to get approval, correct? And if we go over the $3000, then Medicare will request documents? This still seems like a cap to me. I guess I have forgotten the difference. Thanks in advance for any clarification to my questions.
    Kind regards

    1. Rick Gawenda says:

      There is no automatic review on all claims that exceed $3000 PT and SLP combined or a separate $3000 for OT in a calendar year. You do not send in medical records unless requested by a Medicare contractor or the supplemental medical review contractor.

  5. Ron Sayre says:

    Rick- Do you know under this new legislation for hospital-based outpatient therapy services would the KX modifier still be required on claims which exceed $2010 for PT/Speech combined and separately $2010 for OT?
    Thanks
    Ron

    1. Rick Gawenda says:

      Yes it would.

  6. Sharon Fisher says:

    Thank you!

  7. Christine Mahnesmith says:

    Does the therapy cap still apply to CAH?

    1. Rick Gawenda says:

      The therapy cap has been repealed in all outpatient therapy settings

  8. Megan Tatasciore says:

    Does this apply to outpatient hospital settings?

    1. Rick Gawenda says:

      Yes!

  9. David Lundgren says:

    Thank you for your timely update re these congressional actions. To clarify, the KX modifier requirement as well as the ABN requirement do not apply when the outpatient services are provided in a hospital-based setting, correct?

    1. Rick Gawenda says:

      As we understand it, the KX modifier would be required in all outpatient therapy settings for services provided above $2010 in calendar year 2018. The use of the ABN is not dependent on a patient exceeding the $2010. Watch for an article on the ABN this upcoming week.

  10. Tiffany Drake says:

    That’s awesome! thanks!

  11. Joe King says:

    Thanks so much Rick. I truly appreciate all your hard work and effort.

  12. dixie says:

    In repealing the therapy cap does this mean that there is no cap at all?

    1. Rick Gawenda says:

      Yes!

  13. Todd May says:

    Does adding the KX modifier for claims above $2010.00 apply to hospital based outpatient clinics since we were not under the cap regulations in 2018?

    1. Rick Gawenda says:

      As we understand it right now, hospitals would have to use the KX modifier for services above $2010 in calendar year 2018.

  14. Swati Bhardwaj says:

    Rick,
    Was “sequestration” addressed in this bill as well or is that still in effect?

    1. Rick Gawenda says:

      Sequestration was not addressed and is still in effect.

  15. Kathy Blair says:

    It seems then that it is no different than what we had last year except for the manual review threshold being reduced. We still have to use the KX modifier over $2010. Does this put the exceptions process permanently in place? What actually has been repealed?

    1. Rick Gawenda says:

      We won’t need to depend on Congress every year to extend the therapy cap exception process.

  16. Jane Ruppman says:

    Will hospitals need to add the KX modifier once the cap is reached?

    1. Rick Gawenda says:

      As we understand it, yes.

  17. Jaime says:

    What is the reduction in payment when treated by PTAs?

    1. Rick Gawenda says:

      Log in and read the article. Also, watch for additional articles on this subject this week.

  18. Julia Thomas says:

    Does this apply to Hospital Outpatient services?

    1. Rick Gawenda says:

      Yes!

  19. Eric Wilson says:

    So for hospital based OP clinics, are we required to still use the KX after $2010 and subject to the $3000 review?

    1. Rick Gawenda says:

      Yes!

  20. Jesse says:

    Hi Rick,
    Thank you for the update. Relating to hospital based out-patient entities, are KX modifiers reinstituted? OP, hospital based entities were exempt from the hard cap as the new year started. Is KX use now universal regardless of setting?

    1. Rick Gawenda says:

      As we understand it, yes.

  21. Gavin Weber says:

    Does the KX modifier need to be applied for hospital outpatients on claims that exceed $2,010?

    1. Rick Gawenda says:

      As we understand it right now, yes.

  22. Julie White says:

    If there is technically no Medicare therapy cap, why do providers still need to append a KX modifier if over the $2010 cap amounts?

    1. Rick Gawenda says:

      The KX will serve as an attestation that services are medically necessary and will allow CMS to track utilization above that dollar amount.

  23. Courage Kenny says:

    Do you know if the KX modifier requirement will apply to all settings or if hospital outpatient departments/clinics are excluded from this KX requirement?

    1. Rick Gawenda says:

      All settings.

  24. Adam Braxmeyer says:

    Am I correct that you will need to use a KX modifier above the $3000 threshold? Additionally, in the bill it looks like the payment rates for assistants will not take effect until 2022.

    1. Rick Gawenda says:

      KX will be required for services above $2010 in year 2018. This dollar amount will be adjusted annually.

  25. Mark Margritz says:

    Are KX modifiers required @ 2010.00 total billings for PT, OT, ST services provided through hospital based outpatient departments?

    1. Rick Gawenda says:

      Yes!

  26. Jeanne Moyer says:

    Does this change the cap exemption for hospital based out-patient departments?

    1. Rick Gawenda says:

      The therapy cap has been repealed in all outpatient therapy settings; however, the KX modifier will still be required when services exceed $2010 in 2018 for PT and SLP combined and a separate $2010 for OT.

  27. Carmen Liebelt says:

    What does this mean for Critical Access Hospitals because we were under different legislation?

    1. Rick Gawenda says:

      The therapy cap has been eliminated in all outpatient therapy settings.

  28. Jennifer Issoglio says:

    Just curious – is Medicare planning on reducing the payments for other midlevels (i.e. PAs or FNPs) or just for PT/OT?

    1. Rick Gawenda says:

      If a PA or NP owns their own practice and bills under their own NPI number, there services have been paid a lesser rate under the Medicare Physician Fee Schedule compared to a physician billing the same codes for years now.

  29. Beth Cowan says:

    Does the KX modifier and manual medical review threshold apply to both private practice and hospital based outpatient therapy services?

    1. Rick Gawenda says:

      Yes!

  30. TJ Carlin says:

    Are these new rules applicable to hospital based Outpatient therapy clinics as well now? So KX at $2010 and manual reviews at $3000 if requested?

    1. Rick Gawenda says:

      Correct!

  31. Haider Rizvi says:

    So when would we expect a manual medical review?

    I am expecting to see some patients over the $3000 threshold, as I was when it was $3,700, but discharged them at that time.

    1. Rick Gawenda says:

      If services were still medically necessary above $3700, you should not have been discharging them. The same will be true for services above $3000 for years 2018 – 2027.

  32. Shawn Hewitt says:

    Rick
    In your description above you describe the “bad news” as still requiring the KX on the $2010 amounts. I thought with this latest vote the $2010 goes away and the KX only applies when the $3000 is surpassed. Can you clarify?

    1. Rick Gawenda says:

      The KX is required for services that exceed $2010 in 2018.

  33. Wanda Hayes says:

    Thanks so much for the timely update. I look forward to more details.

  34. Hemant Patel says:

    Hi Rick,

    Regarding changing payment rate for services performed by PTA & OTA, how would medicare will identify that services was actually provided by PTA or OTA. When we bill the claims, they are being billed under supervising therapist.

    1. Rick Gawenda says:

      The answer is in this article and I will also be publishing additional articles this upcoming week.

  35. Bryan Hujsak says:

    Rick, under the cap, we were having patients sign an ABN as they could be responsible for denied charges once the cap was exceeded. Now that there is no “cap” are the patients still liable for charges past the new monetary threshold, or is the shared risk eliminated and patients no longer need to sign an ABN? Thanks.

    1. Rick Gawenda says:

      Watch for an article this week on this question and many others related to this new legislation.

  36. Matt Dvorak says:

    Thanks Rick. I agree that this is a win/lose for therapy, but at least with repeal of the cap I will not be forced to send my clients to the competition, especially when they have been telling me that they don’t want to go elsewhere. Private practice owners continue to be constricted!!!

  37. Mike Nichting says:

    Thank you so much for this information!!!

  38. Gerriann Samowski says:

    Thank you so much for the quick update. I unfortunately have more questions and maybe I should wait for further updates once you learn more. If there is no cap then why a KX at $2010? Does that apply to all providers including hospital based?
    Thank you again.

    1. Rick Gawenda says:

      The KX is required in all outpatient therapy services when services exceed $2010 in 2018 for PT and SLP combined and a separate $2010 for OT. KX will serve as an attestation that services are medically necessary.

  39. jennifer hartley says:

    The fact that restrictions have to be specifically outlined and we are still tracking the KX modifier ultimately means that we still have a therapy cap in place.

    1. Rick Gawenda says:

      Technically, the therapy cap is repealed since we do not have to have Congress every year pass legislation to extend the therapy cap exception process. The KX modifier is for tracking purposes only.

  40. Maria Maggi says:

    Thank you!

  41. Deidre Robinson says:

    So to clarify is the cap repealed from hospital based outpatient clinics as well as the following:
    •Private Practices (therapist or physician owned)
    •Skilled Nursing Facilities providing Part B therapy services
    •Rehabilitation Agencies
    •Comprehensive Outpatient Rehabilitation Facilities
    •Home Health Agencies providing Part B therapy services in the home
    •Critical Access Hospitals

    1. Rick Gawenda says:

      The therapy cap has been repealed in all outpatient therapy settings.

  42. Don OBrien says:

    Have they indicated the specific fee reduction that will occur when the services are provided by assistants? Have they indicated how we will bill the service were provided by a PTA or OTA? I’m guessing a modifier on the procedures provided by PTA??

    1. Rick Gawenda says:

      Yes they have. You can read the article for the answers as well as I will be publishing additional articles this week.

  43. Khurshid Escalante says:

    Rick, does this mean come January 2019 we will not have to worry about the cap anymore, exception will be in place till 2027.

    1. Rick Gawenda says:

      The therapy cap is permanently repealed.

  44. Jasmine Jumawan says:

    Thank you !

  45. Cheryl Brewer says:

    Rick,
    Thank you for the real time update. First, I manage a hospital based outpatient therapy department..so does the above apply to us now or are we still exempt from any of the cap/KX rulings?
    I think I am confused by the statement that the cap has been repealed but we still have to use KX modifier for over $2010.00.

    1. Rick Gawenda says:

      This does apply to outpatient hospitals. The KX modifier will serve as an attestation that services are medically necessary.

  46. suzanne trebnick says:

    What is the rate that medicare will reimburse for PTA vs PT and which codes does this apply to ?
    What is the maximum for PT per year or is there no max?

    1. Rick Gawenda says:

      You can log in to your account and read the article. In addition, I will be publishing additional articles this upcoming week on the therapy cap repeal, servcies above $2010 and $3000 and payment changes for services provided by a PTA or an OTA.

  47. Brenda Pieper says:

    Does this apply to hospitals billing under the hospital’s NPI number?

    1. Rick Gawenda says:

      Yes

  48. Michelle Alberghini says:

    There was an exception for outpatient rehab departments at one point. With this new information, are outpatient rehab departments included in the groups that need to apply the KX after the claims exceed $2010?
    Thank you

    1. Rick Gawenda says:

      As we understand it, yes.

  49. Megan Sisson says:

    Can you explain further the LPTA/COTA change?

    1. Rick Gawenda says:

      I will publish an article on the PTA and OTA payment changes this upcoming week.

  50. George-Ann Glynn says:

    Thank you Rick, quick question; Would Hospital-based OP clinics need to add KX modifiers on claims above $2010, or are they still exempt as they have been since the beginning of the year?

    1. Rick Gawenda says:

      As we understand, all settings would require the KX modifier for services provided above the $2010.

  51. Diana Rich says:

    Will hospital outpatients Medicare Part B patients require KX? Thanks for the update!

    1. Rick Gawenda says:

      Yes, as we understand it.

  52. rhonda reininger says:

    Does all above (i.e. usage of KX modifiers)apply to outpatient hospitals as well as private practices?

    1. Rick Gawenda says:

      Yes

  53. Kathy Droese says:

    Rick, 2 questions: 1)Is the KX modifier at $2010 now required for both Private Practice & Hospital Based therapies? 2)Is hospital based outpatient rehab now also held to the possible manual review at $3000? Thanks.

    1. Rick Gawenda says:

      1. Yes
      2. Hospitals always had the potential for the manual medical review (targeted medical review).

  54. Danielle Fallon says:

    Texas is already unfortunately on the reduced reimbursement bandwagon for PTAs and COTAs. Medicaid reimburses at 70% allowable for services provided by PTA/COTA. the only people this will hurt is the PTAs/COTAs we rely on – I know several that already lost their jobs or got their pay cut because of it. 🙁

  55. Kay Stevens says:

    Rick, as always, thanks for the information. One question – presume this applies to ALL OP settings, including hospital based services?

    1. Rick Gawenda says:

      Yes

  56. Kristina Pflughaupt says:

    Are these new guidelines applying to hospital based facilities as well? Or is there still no cap there?

    1. Rick Gawenda says:

      There is no cap for anyone, but would still need to use the KX modifier for services provided over $2010 in 2018 for PT and SLP combined and a separate $2010 for OT.

  57. Natalie Hart says:

    Is this legislation the same for hospital-based outpatient therapy services?

    1. Rick Gawenda says:

      Yes

  58. Kim Good says:

    Hi Rick, it looks like part of the information is missing. It stops after “The therapy cap repeal is effective with dates of services on and after”. I’m trying to find eff. date of the change. Thank you!

    1. Rick Gawenda says:

      Kim, You need to be a Gold Member and log into the site to see the entire article.

  59. Rochelle Hawkins says:

    Since Hospital outpatient departments were not affected by the Hard Therapy cap.. does this cap apply to them as well? Will they need to start tracking to use the KX modifier like they did before? Just wanted to double check.

    1. Rick Gawenda says:

      Services provided above $2010 in a hospital setting would require the KX modifier

  60. Susan Bickline says:

    So, will any charges incurred since the beginning of January be counted towards the caps and have to have the KX modifier retroactively applied, or do we start tracking charges as of today that would apply to the $2010?

    1. Rick Gawenda says:

      It’s retroactive to January 1, 2018.

  61. Marcel Neesen says:

    Where is the good news here? In all reality the “second” cap has been reduced from $3600 to $3000 before claims can go under review with all the possible financial consequences especially for smaller clinics.
    Also why are PTA’s suddenly inferior to PT’s when it comes to providing patient care.

    1. Rick Gawenda says:

      The good news is we won’t have to depend on Congress every so often to extend the therapy cap exception process. To me, the $3000 is not that big of a deal since it’s a small percentage of patients that exceed $3000 and only a percent of those are reviewed. The bigger concern is the payment reduction for services provided by a PTA or OTA. But we have some years to fight that one, but in my opinion, will be a difficult fight.

      1. Utkarsh Patel says:

        In the article, it states that 15 percent deduction starts in 2022. However, will they gradually decrease starting from 2019 for PTA/OTA reimbursement?

        And do you feel this has a chance of getting appealed (reduced rate for PTA/OTA)?

        1. Rick Gawenda says:

          It will start in 2022. My opinion only; it will be very difficult to repeal this.

  62. John Goodrich says:

    Will the reduction in reimbursement for PTA’s be applicable for hospital outpatient departments since we bill under the facility NPI? How will they be able to tell if a PTA has treated that patient or not?

    1. Rick Gawenda says:

      Yes, it will apply to hospitals. CMS will develop a modifier that will be used on the claim to identify the services were provided by a PTA or OTA.

  63. Haider Rizvi says:

    Can you explain how the manual medical review process works and who is subject to be audited: the provider or the facility?

    1. Rick Gawenda says:

      I will discuss the manual medical review in an article I will publish next week.

  64. Marcel Neesen says:

    Rick.
    It was mentioned that the KX modifier is only used as a tracking tool. In my opinion it gives incorrect feedback eg if I get a patient later in the year that already used the first cap with another provider I am the one who has to use the KX modifier. Happens to me a lot and makes me look (on the reports) that I am “overusing” visits.
    Does anyone else runs into this?

    1. Rick Gawenda says:

      What you describe has been happening since the implementation of the manual medical review. The opposite that you describe could also happen. You could see the Medicare patient first for $2000 of covered services and then the patient has therapy at another provider and goes over the therapy cap and now must use the KX.

      1. Marcel Neesen says:

        Rick
        I totally agree with your reply about the reports on the KX modifier. It should reflect on the overall use and not on an individual basis. The same with comparing the average units per visits
        Thanks for all your help

  65. Diane Pennington says:

    So a private practice has no cap but will attach the KX modifier when $3,000 collectables is reached.
    All OP therapists are on equal footing.

    1. Rick Gawenda says:

      The therapy cap has been removed in all outpatient therapy settings. You will need to use the KX modifier in 2018 for services provided above $2010 for PT and SLP combined and a separate $2010 for OT. In subsequent years, the $2010 will be adjusted annually and a KX would be required when therapy services exceed that amount.

  66. Diane Grusky says:

    You keep saying we need to use the KX modifier when exceeding $2010 in 2018. After 2018 we will no longer need to use it for tracking purposes?

    1. Rick Gawenda says:

      You will need to use the KX modifier in 2018 for services provided above $2010 for PT and SLP combined and a separate $2010 for OT. In subsequent years, the $2010 will be adjusted annually and a KX would be required when therapy services exceed that amount.

  67. Lisa says:

    Has there been any discussion recently in congress about letting PT and Speech and OT all have the same available Medicare $$$ of $2010/3000 vs PT and Speech patients being penalized because their stroke just happened to include speech difficulties.

    1. Rick Gawenda says:

      No, the law does not separate PT and SLP for tracking the dollar amount each calendar year.

  68. Angie Gibbs says:

    Thank you for sharing relevant information.

  69. Jill LaRock says:

    As a critical access hospital is the Cap based on the Medicare Fee Schedule or the Hospitals own charges as for us they are very different. Can you discuss the best way to calculate the cap based on billing. Thank you.

    1. Rick Gawenda says:

      It’s based on the Medicare Physician Fee Schedule and the allowed amount for each CPT code after the application of the multiple procedure payment reduction policy and before the sequestration reduction.

  70. Heather Skaar says:

    Hey Rick,
    I know you’ve answered a lot of questions and really appreciate your information, but I still do not see how this is not a therapy cap if the provider still have to track the amount in order to know when to append the KX modifier. Also the $2010 is not mentioned in the legislation, only the $3000. It seems the KX modifier would be appropriate once the patient reached $3000 if PT/ST or OT was deemed medically necessary beyond that and also at this time could trigger a targeted review.

    1. Rick Gawenda says:

      There is no hard therapy cap anymore and we will not need Congress to pass legislation every year to allow for the continuation of the exception process. KX is required in 2018 when a patient exceeds $2010 in 2018.

    2. Daniel Moore says:

      I agree with you Heather re: the need to track for the KX modifier even though the cap was repealed. We used to be able to YTD pay-out amount from a couple CMS sources but, since the repeal, I can’t find those figures anymore. Our facility is in a resort area so, we have a lot of seasonal clientele. Now I have no idea what has been paid out prior to the beneficiary stepping through my doors. Has any found a source for this information???

      1. Rick Gawenda says:

        Check your Medicare Administrative Contractors website for tools that are available to track the therapy cap.

  71. Barbara Fuller says:

    If I am reading this correctly, OBS patients do not have a cap either.

    1. Rick Gawenda says:

      OBS patients, if having therapy billed as an outpatient ant under an APC payment, would be considered outpatient therapy under Medicare Part B benefits.

  72. Tasha Walker says:

    When using the KX modifier at $2010, is it still recommended to complete a “cap clarification form?” I understand that there is no longer a hard cap, but does Medicare still require a clarification form?

    1. Rick Gawenda says:

      There is no “cap clarification form”. Documentation would need to support therapy services are still medically necessary and require the unique skills of a therapist to provide.

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