Awareness : Newsletter Articles

Outpatient Therapy

On February 9, 2018, President Trump signed into law the Bipartisan Budget Act of 2018. This new law includes several provisions related to Medicare payment.

With regard to payment for outpatient therapy services, the law repeals application of the Medicare outpatient therapy caps but retains the former cap amounts as a threshold above which claims must include the KX modifier as a confirmation that services are medically necessary as justified by appropriate documentation in the medical record; and retains the targeted medical review process, but at a lower threshold amount.

Medicare claims are no longer subject to the therapy caps (one for occupational therapy services and another for physical therapy and speech-language pathology combined);

  • Claims for therapy services above a certain amount of incurred expenses, which is the same amount as the previous therapy caps, must include the KX modifier indicating that such services are medically necessary as justified by appropriate medical record documentation; and
  • Claims for therapy services above certain threshold levels of incurred expenses will be subject to targeted medical review. The medical review thresholds for therapy services in a year before 2028 are $3,000.
  • CMS will begin the process of releasing claims that had been held briefly after expiration of the therapy caps exceptions process. CMS will release for processing the held claims based on the date the claim was received, i.e., on a first-in, first-out basis, until no claims are being held.

This process will be accomplished as quickly as possible while staying within the requirements for the volume of claims that MACs can release on a given day.