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Medicare Therapy Cap is Repealed: Answers to Your Most Pressing Questions

After 20 years of selfless work by the APTA and the Therapy Cap Coalition, the Medicare Therapy Cap is dead! Great News! Am I right? Here is a recap of the victory quoted from the APTA:

  • Claims that go above $2,010 (adjusted annually) still will require the use of the KX modifier for attestation that services are medically necessary.
  • The threshold for targeted medical review will be lowered from the current $3,700 to $3,000 through 2027; however, CMS will not receive any increased funding to pursue expanded medical review, and the overall number of targeted medical reviews is not expected to increase.
  • Claims that go above $3,000 will not automatically be subject to targeted medical review. Instead, only a percentage of providers who meet certain criteria will be targeted, such as those who have had a high claims denial percentage or have aberrant billing patterns compared with their peers.

What is the Difference?

So, it turns out that the news isn’t so great. On a practical level, there really was no Therapy Cap when the exceptions process was in place. There was merely a requirement to add a KX modifier to claims at a certain arbitrary level of Medicare allowed charges that stipulated that continued services were medically necessary. (By the way, there is a medical necessity requirement for all services, whether or not the annual cap amount is reached.)

Now that the cap is dead, there is still a requirement to add a KX modifier to claims at the same arbitrary level stipulating that continued services are medically necessary. The only real change on a practical level is that the amount of allowed charges that may subject you to a medical review decreased from $3,700 to $3,000.

More “Good News”

CMS believes that eliminating the non-existent cap will increase costs for therapy services, so there is a plan afoot to decrease payment for services provided by assistants in the future. In the meantime, payment for the most commonly used CPT codes has decreased.

Choosing Your Battles

Hindsight, of course, is great. I don’t believe anyone anticipated that CMS would propose a decrease in PTA and OTA payment as a consequence of the cap repeal.

None of this is meant to denigrate the efforts of everyone who worked so tirelessly for repeal of the cap.  We all have a responsibility to advocate on behalf of our patients. We need to be careful in using our scarce resources to fight the right battles.

Anyone care to take on Functional Limitation Reporting? What could possibly go wrong?

2 thoughts on “Medicare Therapy Cap is Repealed: Answers to Your Most Pressing Questions

  1. the big issue we have is when the patient completes the toll at the beginning of PT they are not fully aware of their limitations. As a result the 10 visit reports a increase in their limitation. The tools are not great nor represent the patients true dysfunction. The results could hurt the delivery of the services the patient receives.

  2. How does one determine if they fall into the category or “those who have had a high claims denial percentage or have aberrant billing patterns compared with their peers”?

    Is there a list or a resource to contact that could provide this information?

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