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 beneficiaries receiving therapy services known as the "Therapy Cap." In 2018, the cap was rescinded through the passing of the Bipartisan Budget Act of 2018 (BBA of 2018). Now, therapy services are subject to a therapy threshold.
Although the Therapy Cap was rescinded in 2018, CMS left regulations in place requiring therapists to apply a special "KX modifier" on all claims when the Medicare allowed charges reach certain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. Any amount exceeding the thresholds must also include a KX modifier to notify Medicare the services provided beyond the threshold are medically necessary for the beneficiary.
In 2021 the KX modifier threshold limits are:
In addition, services exceeding $3,000 annually for PT and SLP services combined or OT services may be subject to a targeted medical review process
Since the therapy caps and associated exception processes were overturned, CMS relies on the KX modifier and targeted medical reviews as control measures for covered therapy services. While there is no official exception process anymore, any services provided to a beneficiary that exceed the threshold must also include a KX modifier to notate medically necessary services. Any services provided to a beneficiary that exceed the cap and don’t include a KX modifier will be denied coverage.
This means that CMS will deny payment of any claims that exceed the $2,110 therapy threshold that doesn’t include the KX modifier to prove medical necessity. Instead, the Medicare beneficiaries will be responsible for payment of any claims that exceed the therapy threshold and are not medically necessary.
No. There is now a targeted review process instead for any services that exceed $3,000 annually for therapy services.
Yes. The therapy threshold applies to the following settings:
Clinicient's EMR and Medicare physical therapy billing system can help ease compliance to Medicare regulations and track the therapy threshold automatically for applicable patients. Among the many features that support Medicare compliance, Clinicient’s Insight offers:
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.