Therapy Threshold, KX Modifier & The ABN FAQs

October 29, 2018
Rick Gawenda

In this week’s article, I wanted to answer some of the most commonly asked questions I receive concerning the Medicare therapy threshold (formerly, the Medicare therapy cap), the KX modifier, claims exceeding $3,000 in a calendar year and when to and when not to use an advance beneficiary notice of noncoverage (ABN) for Medicare beneficiaries who exceed the annual therapy threshold and $3,000 in a calendar year. In this article, I will answer the following questions:

1. Why is it called the therapy threshold and not the therapy cap?

2. Why must I still use the KX modifier?

3. Will the annual therapy threshold dollar amount still increase each calendar year?

4. What is this $3,000.00 targeted medical review threshold?

5. Once a Medicare beneficiary exceeds the annual therapy threshold, do I use the KX modifier, issue an ABN or do both?

6. Once a Medicare beneficiary exceeds the annual targeted medical review threshold, do I use the KX modifier, issue an
ABN or do both?

7. Who is responsible for conducting the medical record reviews of claims that exceed the targeted medical review threshold?

8. What criteria is used to determine which claims that exceed $3,000 in a calendar year will be reviewed?

Lets begin!


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  1. Rick, do you know how far back Medicare or Noridian is likely to review records that exceeded the $3000 Threshold?
    thank you

  2. Hello – If a patient does not have secondary coverage, is it appropriate to issue an ABN for the 20% that Medicare does not cover? Thank you

  3. Prior, the KX modifier did not need to be included on the claims for reimbursement in the hospital OP setting. But now, we seem to be getting denials due to not including the KX modifier. Did something change from a regulatory perspective that this now needs to be included for claims processed in 2020 and moving forward?
    Thank you as always.

  4. At what point is a PT establishment negligent and inhibiting the progression of care when they refuse to apply the KX modifier? I have a patient whom has 3 different medical conditions designated by physicians as medically necessary to receive PT. The patient has visited other PT clinics and have no issues using the KX modifier due to her lengthy medical history and supporting documentation. She moved to an area where she visits a new clinic and they absolutely refuse to use the KX modifier for the patient. They say they only use for people with knee replacements etc however this patient has medical conditions far worse than knee replacements. It is as if the establishment is too lazy to apply it. Reverting back to my question, at what point is the establishment taking advantage of the elderly patient by not applying the KX modifier? I understand we can move the patient to an alternative clinic (they have already offered to use the KX modifier for her situation) however, what about the hundreds of dollars that have already been spent OOP when the clinic refused to bill appropriately with the KX modifier? Thank you!