2012 Medicare Therapy Cap: Changes Effective October 1, 2012

Beginning October 1, 2012, significant changes will occur regarding the therapy cap that will impact your practice. These include the following:

  • Outpatient hospitals (with the exception of critical access hospitals) will be subject to the therapy cap.
  • Providers must report the NPI of the physician/nonphysician who certifies the plan of care on the claim form.
  • The Manual Medical Review exceptions process for claims exceeding $3700 becomes effective for phase I providers October 1, phase II providers, November 1, and phase III providers December 1, 2012.
  • CMS will provide information regarding the exact dollar amount accrued toward the therapy cap for each beneficiary. Dollars accrued while in the hospital outpatient setting since January 1, 2012 will be added to the common working file.

CMS announced that providers will know the dollar amount that their patients have accrued toward the therapy cap on October 8.

APTA Resources

Resources developed by APTA regarding the 2012 therapy cap exceptions process implementation, including therapy cap background, information regarding the exceptions process (automatic and manual medical review), application to hospitals, and regulations regarding collection of out of pocket payment from beneficiaries exceeding the cap.

FAQ: 2012 Medicare Therapy Cap

Video: 2012 Outpatient Therapy Cap Webinar - 9/11/12 APTA.org Members Only Icon

Podcast: 2012 Medicare Therapy Cap Update - 8/28/12 APTA.org Members Only Icon

Manual Medical Review

Manual Medical Review Information for MAC Websites (.pdf) - 9/17/12 APTA.org Members Only Icon

Manual Medical Review Complaint Form APTA.org Members Only Icon
If you are experiencing issues with the Medicare therapy cap exceptions process for 2012 or other issues related to the therapy cap and you have been unable to resolve your issues by contacting your Medicare Administrative Contractor (MAC), you may complete this complaint form. APTA staff will contact you within two business days using the information in the form to help you resolve your issue.

CMS Resources

Resources developed by Centers for Medicare and Medicaid Services (CMS) regarding therapy cap implementation, including a fact sheet, question and answer document, open door forum recordings and transcripts, and Transmittals. Questions may be emailed to CMS at: therapycapreview@cms.hhs.gov.

Medicare Therapy Cap Exceptions Process: CMS Fact Sheet (.pdf) - 8/2/12

Medicare Therapy Cap Exceptions Process: CMS FAQ (.pdf) - 8/2/12

Transcript: CMS Special Open Door Forum: Manual Medical Review (.pdf)

Transmittal 2537: Expiration of 2012 Therapy Cap Revisions and User-Controlled Mechanism to Identify Legislative Effective Dates

Transmittal 1124 (.pdf): Manual Medical Review of Therapy Services

Transmittal 2457: Revisions of the Financial Limitation for Outpatient Therapy Services - Section 3005 of the Middle Class Tax Relief and Job Creation Act of 2012

Information for Medicare Beneficiaries

Education & Advocacy: Download APTA's letter to physical therapy patients (.pdf) as a starting point to a conversation, or send your patients to APTA's official consumer website to take action.

Advanced Beneficiary Notification: If a patient does not qualify for an exception, the provider can collect out of pocket payment from the beneficiary. It is advisable to give the beneficiary an Advanced Beneficiary Notice (ABN) if Collecting Out of Pocket. The Revised Advanced Beneficiary Notification form (Form-R-131) is available on the CMS website.

Additional Resources: Medical Necessity and Documentation

Here are additional resources regarding medical necessity and documentation requirements under Medicare.

Local Coverage Determinations

Medicare Administrative Contractor Contact List

Medicare Benefit Policy Manual - Chapter 15, Sections 220 and 230 (.pdf)

Medicare Claims Processing Manual - Chapter 5 (.pdf)

APTA Resources: Medicare Coding & Billing

Take Action! Legislative Information

The ultimate goal is to repeal the therapy cap.

You can get involved by supporting our cosponsor drive for HR 1546, the Medicare Access to Rehabilitation Services Act, which seeks to permanently repeal the Medicare cap on physical therapy services.

APTA members can also use the Legislative Action Center to write their representatives, and they can sign up for PTeam to stay informed regarding the association's efforts to stop the cap.

It's also imperative that legislators hear from patients, so encourage your patients to go to APTA's official consumer website to take action.

CSM 2016