Therapy Caps, Limits and Providers

May 4th, 2017 - Chris Woolstenhulme, CPC, CMRS
Categories:   Physical Medicine|Physical Therapy   Medicare  
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The annual combined therapy cap is per beneficiary each calendar year. For 2017, this includes Medicare Part B outpatient therapy cap for Occupational Therapy (OT) $1,980, Physical Therapy (PT) and Speech-Language Pathology Services (SLP) $1,980. 

In addition there is an exception process, if the therapy services are higher than the limited amounts, the beneficiary may qualify exception to the therapy cap.  Per CMS, Medicare will pay above the $1980 therapy limits under the following conditions:

  • Therapist or therapy provider provides documentation to show that services were medically reasonable and necessary.
  • Therapist or therapy provider that services were medically reasonable and necessary on a claim.

If the beneficiary's services exceed the $3,700 threshold, there will be a medical claim review done by Medicare Administrator Contractors (MACs). The exception to this would be Critical Access Hospitals (CAHs) are excluded from review as well as all claims submitted with a KX modifier, stating specific required documentation is on file and it is documented as medically necessary.

The therapy cap applies to all Part B providers and outpatient therapy services including:

    Therapists’ private practices             
    Offices of physicians and certain nonphysician practitioners
    Part B skilled nursing facilities
    Home health agencies (Type of Bill (TOB) 34X)
    Rehabilitation agencies (also known as Outpatient Rehabilitation Facilities-ORFs)
    Comprehensive Outpatient Rehabilitation Facilities (CORFs)
    Hospital outpatient departments (HOPDs)
    Critical Access Hospitals (CAHs) (TOB 85X) - (2014)

In addition, the therapy cap will apply to outpatient hospitals as detected by:

    Type of Bill 12X, 13X or 085X
    Revenue code 042X, 043X, or 044X
    Modifier GN, GO, or GP; and
    Dates of service on or after January 1, 2014

Be sure to utilize an "Advance Beneficiary Notice of Noncoverage" (ABN), if the therapy cap has been reached and the services are considered not reasonable and necessary. 

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