On October 26, 2017, lawmakers from the House Energy and Commerce Committee, the House Ways and Means Committee, and the Senate Finance Committee announced a bipartisan, bicameral agreement to end the hard cap through proposed legislation that would essentially codify the exceptions process. This legislation would to eliminate the arbitrary cap on physical therapy (PT) and speech-language pathology (SLP) services, and the separate cap on occupational therapy (OT). The current process for targeted post-payment medical review would continue, but with the current $3,700 threshold lowered to $3,000.

While we were disappointed that PT and SLP are still grouped together, we believe this proposed policy will provide appropriate oversight of therapy services, alleviate administrative burden, while most importantly eliminating the unnecessary and burdensome therapy caps. It is clear that if they were to separate PT and SLP that the cost of the bill would increase significantly and the legislation itself would no longer be viable.



A hard cap of $2010 on outpatient therapy services (PT/SLP combined, OT separate) applied as of January 1, 2018. The Medicare Extenders Package released by the House includes the above language to repeal the current Medicare therapy cap and the exemptions process and replace it with a policy that ensures access to care for those who need it but also implements a few stop-gap measures that are used to protect against fraud.



On February 9th, the President signed into law a budget deal that included a package of Medicare policies. Included in this package was a policy to repeal the arbitrary therapy cap and replace it with a policy that essentially codifies the exceptions process that had been in place. The new therapy policy requires that the KX modifier indicating services are medically necessary be included once PT/SLP or OT therapy spending reaches $2010 in a given year. This amount will be adjusted annually. Bills can be denied if the KX modifier is not used on claims which exceed the $2010 threshold. Instead of the exceptions process threshold of $3700, now at the $3000 level there is the potential of a targeted medical reviewed triggered by factors such as one is a new Medicare-enrolled provider, aberrant billing as compared to their peers, or the provider belongs to a practice whose partners have been flagged for aberrant billing. The $3000 amount will be adjusted annually by Medicare Economic Index (MEI) beginning in the year 2028.

This new policy will be retroactively applied to therapy expenses incurred starting January 1, 2018. If a patient has already exceeded the $2010 threshold but that billing does not include the KX modifier, those claims could be denied.

The most significant departure from the previous exemptions process is the lowering of the threshold from $3700 to $3000 for targeted medical review. This was done for scoring purposes. The other main provision that impacts the score is the requirement to use the KX modifier for claims at $2010 and above. The assumption is that some providers will fail to use the KX modifier when they are supposed to and this will allow CMS to deny claims; additionally, there is the thought that the KX modifier requirement will also deter bad actors from billing more than $2010 for fear of being more "visible". With this agreement we have avoided prior authorization.



The budget deal also includes a pay-for that PPS does not support and worked hard to change after it was announced at the last minute—this pay-for would reduce payment for services in which a physical therapist assistant (PTA) is involved under Medicare Part B. Beginning January 1, 2022, payment for services provided by a PTA, as well as services provided by an occupational therapy assistant (OTA), would be paid at 85% of the Medicare fee schedule. As you know, this policy was not part of any of the discussions or negotiations on Capitol Hill over the past year, nor was it included as part of the proposed package of pay-fors that were announced this past fall as part of the bipartisan, bicameral agreement. We worked with APTA and AOTA to provide alternative proposals to eliminate, reduce, or delay the PTA and OTA payment differential. Each of these legislative options was rejected. Going forward we will work with CMS and our Congressional champions to reduce the impact of this pay-for.


For record-keeping purposes, the bipartisan message bill to permanently repeal the arbitrary therapy cap—the Medicare Access to Rehabilitation Services Act (H.R.807/S.253)—topped out at 241 cosponsors in the House and 38 cosponsors in the Senate.


Thank you for all of the calls, emails, and tweets you sent to your legislators asking for their support to repeal the arbitrary therapy cap. Members of Congress really appreciate being thanked when appropriate. Use these links to see how your Representative and Senators voted on the Bipartisan Budget Act of 2018(HR1892):


If they voted against the Bipartisan Budget Act of 2018, it might have been for a reason other than the therapy cap repeal policy, so don't be afraid to ask why they voted the way they did."

Please click here to login or create an account to leave a comment


Recent Posts