When Congress adopted a federal spending package that included the elimination of the hard cap on Medicare therapy services, it didn't just remove a rule—lawmakers also adopted a new system of payment thresholds and triggers, and a differential payment rate for physical therapist assistants (PTAs) and occupational therapy assistants (OTAs), among other things.
APTA supported an end to the hard cap, which is a significant win for the most vulnerable Medicare patients, but other parts of the system that replaced it are problematic.
The elimination of the hard cap is retroactive to January 1, 2018, but not all details of the post-cap system have been worked out, and it's possible that some may change before their implementation dates. In the meantime, here are the basic elements of the new system.
1. It boils down to a threshold for using KX modifiers and a trigger for possible medical review.
The basic idea is this: outpatient therapy under Medicare now has a $2,010 threshold; services delivered beyond that require a KX modifier indicating that the service meets the criteria for a payment exception. When therapy reaches $3,000, it's subject to possible targeted medical review—although CMS didn't receive any additional funding to conduct these reviews.
2. Physical therapy and speech-language pathology still are lumped together in the thresholds.
Just as in the previous payment system that included a hard cap and exceptions process, the new system doesn't separate physical therapy from speech-language pathology in establishing thresholds. Those $2,010 and $3,000 limits are for physical therapy and speech-language pathology therapy combined—another element opposed by APTA.
3. The thresholds apply to all part B outpatient therapy services—including services provided by hospital outpatient departments.
For the brief time beginning in January when the therapy cap was in place, hospital outpatient facilities were not subject to the cap. That changed with the adoption of the budget package, and now these departments or clinics are subject to the thresholds: $2,010 for use of the KX modifier and $3,000 for potential targeted medical review.
4. The PTA payment differential will start in 2022—along with a special claims designation.
In the post-cap payment system, outpatient therapy services performed by physical therapist assistants (PTAs) and occupational therapy assistants (OTAs) will be reimbursed at 85% of the Medicare physician fee schedule—a change opposed by APTA. However, that's not set to happen until 2022.
For now, claims do not include a way to designate whether a service was delivered by a PTA, but that too will change by 2022, when CMS will develop a modifier to make that distinction. Between now and then, look for opportunities to comment on proposed rules around this process, along with guidance and more details as they develop.
5. Home health also will be subject to the PTA payment differential, absent a plan of care.
The 85% payment differential for services provided by a PTA or OTA will apply to home health care provided to Medicare part B beneficiaries—but only when a home health plan of care is not in effect. The budget deal that resulted in the end to the hard cap also established other new rules for home health.