Congress Repeals Medicare Therapy Cap

February 9, 2018
Rick Gawenda

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

The content here is for members only log in here or sign up.

All material posted on our website is the intellectual property of Gawenda Seminars & Consulting, Inc. and can’t be used, reproduced, or posted as your own material without the prior written approval of Gawenda Seminars & Consulting, Inc.

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

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

  1. 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?

  2. 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. 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.

  3. 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?

  4. 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. 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.

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

  6. 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?

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

  8. 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?

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

  10. 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?

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

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

    1. 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.

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

    1. 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.

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

  15. 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?

  16. 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. 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.

  17. 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?

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

  19. 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.

  20. 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!!!

  21. 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. 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.

  22. 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. 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.

  23. 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

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

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

  26. Rick,
    Thank you for the real time update. First, I manage a hospital based outpatient therapy 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. This does apply to outpatient hospitals. The KX modifier will serve as an attestation that services are medically necessary.

  27. 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. 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.

  28. 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

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

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

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

  32. 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. 🙁

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

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

    1. 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.

  35. 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!

  36. 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.

  37. 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?

  38. 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. 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. 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)?

  39. 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. 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.

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

  41. 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. 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. 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

  42. 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. 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.

  43. 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. 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.

  44. 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.

  45. 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. 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.

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

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

  47. 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. 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.