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Therapy Cap Repealed – Implications for Providers

by • February 11, 2018 • 20 Comments

On February 9, 2018, the United States Senate and House of Representatives passed H.R. 1892 – “Bipartisan Budget Act of 2018” and President Trump signed the bill into law at approximately 8:30am ET on February 9, 2018. The bill passed the Senate by a vote of 71-28 and passed the House of Representatives by a vote of 240-186.

This legislation contains several important implications that will have an impact on outpatient therapy services provided by physical therapists, physical therapist assistants, occupational therapists, occupational therapy assistants and speech-language pathologists. This legislation changes the following regarding outpatient therapy services:

  • Annual outpatient therapy cap, exception process, and use of the KX modifier
  • Dollar threshold for the targeted medical review process
  • Payment rates for services provided by a physical therapist assistant or occupational therapy assistant

In this article, I will explain changes to the annual therapy cap, exception process and use of the KX modifier. To read about the changes to the targeted medical review process, click HERE. To read about payment changes for services provided to Medicare beneficiaries provided by a physical therapist assistant and occupational therapy assistant, click HERE.

Beginning with dates of services on and after

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20 thoughts on “Therapy Cap Repealed – Implications for Providers”

  1. Jill Bustin says:

    You state calendar year 2018, but in previous news you stated that therapy in outpatient hospital setting did not count toward cap during the period that congress had not extended the cap. Could you clarify if you know if therapy received in outpatient hospital setting from 1/1/18 to 2/8/18 would be counted towards the cap?

    1. Rick Gawenda says:

      That is because prior to February 9, 2018, that was true. As of the passage of this bill, things have now changed.

  2. Jill Bustin says:

    For any dollar amount above $2010 (even above $3000) you would not need an ABN signed if you were documenting the patient was clearly making functional progress?

    1. Rick Gawenda says:

      Please read this article and the article discussing Targeted Medical Review for your answer of whether or not to issue an ABN.

  3. Craig Curry says:

    Will we need to track the amount towards $2010 and use the KX modifier in the years 2019 and beyond?

    1. Rick Gawenda says:

      Yes, but the dollar amount will be adjusted annually based on the percentage increase in the Medicare Economic Index.

  4. Michele Pasqualetto milano says:

    Are these numbers correct? I’m seeing conflicting information between different articles dated 2-11-18
    Thank you for clarification.

    1. Rick Gawenda says:

      Are what numbers correct?

    2. Michele Pasqualetto milano says:

      I looking for clarification on When should we add the kx modifier, after $2010 or $3000?

  5. Robert C Filer says:

    I would just like some clarification on whether there is a therapy cap. In this article, you state there is no longer an annual therapy cap or the need for an exception process. However, in your newsletter titled Targeted Medical Review Changes for Outpatient Therapy Services, which was released on the same date as this newsletter, you state that the annual dollar amount for targeted medical review will be $3000 for PT/ST combined and a separate $3000 for OT. Does this mean that there is no hard therapy cap but that we still need to append the KX modifier after $2010 has been reached and that claims will still be subject to a random medical review after $3000 has been reached? I’m a Physical Therapist and am more concerned about the PT aspect, not OT. Thank you

    1. Rick Gawenda says:

      You are correct!

  6. Kirstin Powers says:

    As the cap amount has always been the amount Medicare paid out on behalf of the patient, (the $2010). With this new ruling, is that remaining the same, such as the KX modifier is required after Medicare has actually PAID out $2010 OR it is required after $2010 has been BILLED out? Thanks!

    1. Rick Gawenda says:

      Please read questions 2 and 3 of this article that was published a few weeks ago.

  7. david fontana says:

    If we feel the patient no longer is making gains but the patient does not share that opinion do we have them sign ABN and stop attaching KX or attach KX ?

    1. Rick Gawenda says:

      This is not an easy answer to give in this format. If you are going to switch the patient to a wellness program, those services are never covered by the Medicare program and you could collect cash for those services, an ABN would not be required and no claim is submitted to the Medicare program. If continuing with the services and calling it physical therapy, you would want the patient to sign an ABN and a KX modifier would not be appended to those CPT codes since you are saying they are not medically necessary. The claim would be submitted to the Medicare program.

  8. Nikki Swartz says:

    I have been asked by several patient’s that if they reached the point of needing a manual review or at which time I would give them an ABN for services because I don’t think they would be covered or they have reached max potential in my opinion, could they pay out of pocket vs going through Medicare. I have not had this happen and do not do this because I don’t know the right answer.

    1. Rick Gawenda says:

      If you, as the therapist, believe services are still medically necessary and require your skills to provide, you would append the KX modifier to services above the annual therapy cap dollar threshold ($2010 in calendar year 2018). This would also include services above $3000. If using the kX modifier, it would not be appropriate to issue an ABN. Check out my ABN FAQs on my website at

  9. Chris Mazur says:

    Just to clarify, does the $3,000 threshold amounts apply to all outpatient therapy providers? In the past, hospital outpatient clinics were exempt from the cap process. Now that the caps have been repealed all together, do the new threshold rules also apply to the hospital outpatient clinics?

    1. Rick Gawenda says:

      Hospitals were only exempt from the the therapy cap from January 1, 2018 – February 8, 2018. With the passage of the “Bipartisan Budget Act of 2018”, the therapy cap was repealed but the application of the KX modifier for services provided over $2010 in 2018 and $3000 will require the application of the KX modifier in all outpatient therapy settings, including hospitals and critical access hospitals.

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