CMS Updates Therapy Cap Exception Process

October 28, 2015
Rick Gawenda

The Centers for Medicare and Medicaid Services (CMS) has issued updated policies concerning exceptions to the annual therapy caps due to medical necessity. These policies will only apply when the exceptions process is in effect. CMS reiterates that a Medicare beneficiary may qualify for use of the cap exceptions process at any time during the episode when documented medically necessary services exceed caps. All covered and medically necessary services qualify for exceptions to caps. There are no longer diagnosis codes that automatically qualify a Medicare beneficiary for an exception to the annual therapy cap dollar threshold. This has been true since July 2009.

CMS also discusses the following topics in this updated policy:

  • The process of manual or other medical review processes for claims above the annual therapy cap dollar threshold
  • Documentation requirements for claims above the therapy cap dollar threshold
  • Excessive use of the KX modifier
  • When the KX modifier is appended to a CPT code or codes on the claim form, what the therapist is attesting to by using the KX modifier
  • Billing the most relevant diagnosis as to why the patient requires outpatient therapy services
  • CMS discusses how to identify the certifying physician’s on the claim form when there are 2 or more physicians certifying different plan of cares for a Medicare beneficiary during the same episode of care at the same practice, facility or organization.

To read the updated policy, click

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  1. Is there an updated Automatic Exceptions List with the ICD10 diagnoses? I can’t seem to find one posted anywhere…..

    1. In July 2009, CMS removed the list of DX codes that qualified a Medicare beneficiary for an automatic exception to the the therapy cap. You can use any DX code(s) on the claim as long as those codes are payable by your Medicare contractor and append the KX modifier to the CPT codes on the claim form. Check out my Therapy Cap FAQs at