| 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. |
News Update
February 15, 2018:
APTA hosted a special edition of Insider Intel for our members that focused on additional details and frequently asked questions related to the Bipartisan Budget Act of 2018 signed into law on February 9. The budget deal included a permanent fix to Medicare’s hard cap on outpatient therapy services, changes to the home health payment system, funding for CHIP, and more. Listen to the Webinar.
February 9, 2018: A Permanent Fix to the Therapy Cap: Improved Access for Medicare Patients Comes With Pending APTA-Opposed Cut to PTA Payment - Read this PT in Motion News article.
January 27, 2018: CMS has posted the following on its All Fee-for-Service Providers Spotlight webpage: "For a short period of time beginning on January 1, 2018, CMS took steps to limit the impact on Medicare beneficiaries by holding claims affected by the therapy caps exceptions process expiration. Only therapy claims containing the KX modifier were held; claims submitted with the KX modifier indicate that the cap has been met but the service meets the exception criteria for payment consideration. During this short period of time, claims that were submitted without the KX modifier were paid if the beneficiary had not exceeded the cap but were denied if the beneficiary exceeded the cap.
"Starting January 25, 2018, CMS will immediately release for processing held therapy claims with the KX modifier with dates of receipt beginning from January 1-10, 2018. Then, starting January 31, 2018, CMS will release for processing the held claims one day at a time based on the date the claim was received, i.e., on a first-in, first-out basis. At the same time, CMS will hold all newly received therapy claims with the KX modifier and implement a "rolling hold” of 20 days of claims to help minimize the number of claims requiring reprocessing and minimize the impact on beneficiaries if legislation regarding therapy caps is enacted. For example, on January 31, 2018, CMS will hold all therapy claims with the KX modifier received that day and release for processing the held claims received on January 11. Similarly, on February 1, CMS will hold all therapy claims with the KX modifier received that day and release for processing the held claims received on January 12, and so on."
December 21, 2017 Update:
Congress has not extended the exceptions process beyond December 31, 2017. For 2018, that means the policy reverts back to the 1997 BBA, which institutes a hard therapy cap without an exceptions process for all settings except the hospital setting. According to the 2018 Medicare physician fee schedule, in 2018, the cap threshold is $2,010 for physical therapy and speech-language pathology services combined. (There is a separate cap of $2,010 for occupational therapy services.
APTA is hopeful that Congress will remedy this problem in January 2018. They must pass another continuing resolution by January 19 to keep the government funded, and we hope it will include the pending therapy cap legislation that would permanently extend the exceptions process and establish a targeted medical review process for services over $3,000.
Please check back for updates in the new year and review the information below for background.
Targeted Medical Review Process
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.
To learn more about the targeted medical review process, please see:
Targeted Medical Review: 6 Things You Should Know
Compliance Matters: Responding to Targeted Medical Review
If you have questions or would like additional information, contact advocacy@apta.org.