Arbitrary Therapy Cap Repealed

In the early morning hours of February 9th, the permanent repeal of the therapy cap was included in the spending bill passed by both the House and the Senate. President Trump then signed the bill into law. The legislation eliminates the cap on physical therapy (PT) and speech-language pathology (SLP) services, and the separate cap on occupational therapy (OT). 

The new policy requires that the KX modifier indicating services are medically necessary must be included once therapy spending reaches the $2010 level. This amount will be adjusted annually. Bills can be denied if the KX modifier is not used on claims which exceed the $2010 threshold. At the $3000 threshold, there is the potential of a targeted medical review triggered by factors such as one is a new Medicare-enrolled provider, an aberrant billing as compared to their peers, or belongs to a practice whose partners have been flagged for aberrant billing. The $3000 amount will also be adjusted annually according to the Medicare Economic Index (MEI), beginning in the year 2028.

The fix will be retroactively applied to all therapy expenses incurred starting January 1, 2018.

The budget deal also includes a pay-for that PPS did not support and worked hard to change after it was announced at the last minute. The law allows for a reduction in Medicare Part B payment for services in which a physical therapist assistant (PTA) is involved. 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. This policy was not part of any of the discussions or negotiations with Congress 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. PPS worked with APTA and AOTA to provide alternative proposals to eliminate, reduce, or delay the PTA and OTA payment differential, but each of these legislative options was rejected. Going forward, PPS will work with together with APTA to convince CMS and our Congressional champions to reduce the impact of this unexpected pay-for.