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Date: May 13,2026
Medicare Therapy Cap Exception Process, Manual Medical Review Process & More
On April 14, 2015, the Senate passed H.R. 2, Medicare Access and CHIP Reauthorization Act of 2015, that had been previously passed by the House of Representatives on March 26, 2015. The bill was then sent to President Obama who signed the bill on April 15, 2015. This ACT contained several important provisions for providers of outpatient therapy services. Included in this legislation was the following:
- Repealing the sustainable growth rate formula (SGR) and avoiding the 21.2% payment reduction for Medicare outpatient therapy services
- Improving payment for Medicare outpatient therapy services
- Extension of the work Geographic Price Cost Index (GPCI) in Medicare localities where it is less than 1.0
- Extension of the therapy cap exception process for outpatient therapy services
- Extension of the Children’s Health Insurance Program (CHIP)
- Revisions to the manual medical review process for outpatient therapy services
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The Hospital Based Outpatient Medicare cap expired 3/31/2015. Does the H.R.2 bill put us back under the cap?
Susan Rabidou
Yes!
So – do I understand correctly that the $3700 threshold no longer exists at all with this new legislation? (i.e. Medicare will continue to pay >$3700 IF we are providing a medically necessary service AND our documentation supports that). You mentioned that the manual medical review process has been replaced with other criteria that could be red flags for a Medicare audit (which sounds very similar to how things used to be before the whole $3700 manual medical review process was implemented)
CMS will be developing a new process for the manual medical review for beneficiaries that exceed the $3700 threshold for PT and SLP combined and a separate $3700 for OT. This new process is due by mid-July 2015.
Any information on the new process that was due in July?
As of today, no transmittals released from CMS.
The following question was asked back on 6/23/15…So – do I understand correctly that the $3700 threshold no longer exists at all with this new legislation? (i.e. Medicare will continue to pay >$3700 IF we are providing a medically necessary service AND our documentation supports that). You mentioned that the manual medical review process has been replaced with other criteria that could be red flags for a Medicare audit (which sounds very similar to how things used to be before the whole $3700 manual medical review process was implemented) ….at the time you did not have an answer….could you please provide more information? Thank you
I actually wrote 2 articles in 2016 about audits above $3700. You can access them by going to the link below:
http://gawendaseminars.com/?submit.x=0&submit.y=0&s=Strategic+Health+Solutions