|The Balanced Budget Act of 1997 placed an annual cap on rehabilitation services under Medicare. Since that time, however, Congress has recognized the cap's potential harmful effect on Medicare beneficiaries and has continually extended an exceptions process that enables Medicare to pay its share for therapy services after the patient reaches the therapy cap limits.
For 2017, the therapy cap threshold is $1,980 for physical therapy and speech-language pathology services combined. (There is a separate cap of $1,980 for occupational therapy services.)
The 2-tiered exceptions process for 2017 consists of:
- An automatic exception that applies when patients reach the 2017 threshold; providers must use the KX modifier and document the reasons for the additional services
- A targeted medical review process for services over $3,700
The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) was the most recent legislation to extend the therapy cap exception process, which is effective through December 31, 2017. MACRA modified the previous process for manual medical review, eliminating the requirement for manual medical review of all claims exceeding the thresholds and instead implementing a targeted post-payment review process. MACRA also prohibited the use of recovery auditors to conduct the reviews.
The Centers for Medicare and Medicaid Services (CMS) hired Strategic Health Solutions LLC as the supplemental medical review contractor (SMRC) to conduct these targeted medical record reviews. Claims are selected for review based on these criteria:
- Therapy was provided in skilled nursing facilities, by therapists in private practice, in outpatient physical therapy, or by speech-language pathology providers or other rehabilitation providers.
- A high percentage of the provider's patients received therapy beyond the threshold compared with other providers during the first year of MACRA.
Of particular interest in this medical review process is the evaluation of the number of units/hours of therapy provided in a day, so accurate and complete documentation is important.
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