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Hot Topics: Understanding the Medicare Therapy Threshold & Therapy Cap Repeal


What is the Medicare therapy cap and was it rescinded?

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".  It was rescinded in 2018.  

What are the Medicare therapy threshold limits for 2020?

Although the Therapy Cap was rescinded in 2018, CMS left regulations in place requiring therapists to apply a special "KX modifier" on all claims when the Medicare allowed charges reach certain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 known as therapy thresholds. In 2020 those limits are:

  • $2,080 for physical therapy (PT) and speech-language pathology (SLP) services combined
  • $2,080 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.

therapist and practice owner looking at report
Learn five take-aways from the 2020 Final Rule.

Is there an exception process for 2020?

No. Since January 1, 2018 there has been no exception process and you can no longer use a KX modifier for medically necessary services that exceed the cap.

Without a therapy cap exception process, what does this mean?

This means that CMS will deny payment of any claims that exceed the $2080 therapy threshold and Medicare beneficiaries will be responsible for payment of any claims that exceed the therapy threshold.

Is there a manual medical review process in 2020?

No. There is now a targeted review process instead.

Does the therapy threshold apply to all outpatient settings?

When there is not an exceptions process in place the therapy threshold applies to all outpatient setting with the exception of hospitals.

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

Clinicient's EMR and medicare physical therapy billing system can help ease compliance to Medicare regulations and track the therapy threshold. 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


Note: The information provided herein is intended to be general in nature. It is not offered as legal or insurance related advice, and is not a complete description, or meant, or intended, to replace or be interpreted as specific, of Medicare requirements. Although every effort has been made to ensure the content herein is correct, we assume no responsibility for its accuracy. Contact Department of Health & Human Services (DHHS) Centers for Medicare and Medicaid Services (CMS) for more information.