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Hot Topics: Understanding the 2018 Medicare Therapy Cap Repeal

What is the Medicare Therapy Cap?

Medicare Part B helps pay for medically necessary outpatient physical therapy, occupational therapy and speech language pathology services. Until 2018 there were annual limits on Medicare allowed payment for therapy services known as the "Therapy Cap".

What are the Medicare Therapy Cap Limits for 2018?

In 2018, the Therapy Cap was rescinded, but CMS left regulations in place requiring therapists to apply a special "KX modifier" on all claims when the Medicare allowed charges reach certain arbitrary limits. In 2018 those limits are:

  • $2,010 for physical therapy (PT) and speech-language pathology (SLP) services combined
  • $2,010 for occupational therapy (OT) services

In addition, services exceeding $3,000 annually for PT and SLP services combined, or OT services may be subject to additional review.

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Learn more about 2018 Medicare updates. Watch our Medicare update webinar with compliance expert, Nancy Beckley.

Is There an Exception Process for 2018?

As of January 1, 2018 there is no exception process and you can no longer use a KX modifier for medically necessary services that exceed the cap. A “hard cap” of $2010 for 2018 for OT and PT/Speech is in effect beginning Jan. 1. This is because congress failed to reinstate the automatic caps exceptions process.

Without a Therapy Cap Exception Process, What Does This Mean?

This means that CMS will deny payment of any claims that exceed the $2010 therapy cap and Medicare beneficiaries will be responsible for payment of any claims that exceed the therapy cap.

Is There a Manual Medical Review Process in 2018?

No. The manual medical review process for claims that exceed $3700 expired on December 31, 2017. There is now a targeted review process instead.

What Should You Do if Your Patient Reaches the 2018 Medicare Therapy Cap?

You should issue an ABN for patients reaching the cap following the ABN instructions.

When Will Congress Revisit the Therapy Cap?

The APTA and other industry insiders believe that Congress will revisit either as part of legislation to extend the operation of the government by January 19th, or as part of the CHIP reauthorization which must be done by March 31, 2018. However, this is not guaranteed. Until Congress does revisit the therapy cap, Medicare Part B beneficiaries have at hard cap on services at $2010.

Does the Therapy Cap Apply to All Outpatient Settings?

When there is not an exceptions process in place the therapy cap applies to all outpatient setting with the exception of hospitals. Critical Access Hospitals, by CMS interpretation of the regulations, are subject to the therapy cap, and have been since 2014.

How does Clinicient help therapists manage Medicare compliance and the therapy cap?

Clinicient's therapy-specific EMR and billing system can help ease compliance to Medicare regulations and track the therapy cap. Among the many features that support Medicare compliance are:

  • Single system for EMR and billing
  • Therapy-specific chart templates
  • Workflow prompts, alerts and notifications
  • Goal tracking and process reporting
  • Pre-audit at visit sign off