Therapy Services

Spotlight

Advance Beneficiary Notice of Noncoverage Frequently Asked Questions Document Now Available

On May 1, CMS released a new Frequently Asked Questions (FAQ) document on Advance Beneficiary Notice of Noncoverage. Please view the new FAQ document, or find it in the Downloads section below.

Jimmo v. Sebelius Settlement Agreement (Fact Sheet)

 On January 24, 2013, the U. S. District Court for the District of Vermont approved a settlement agreement in the case of Jimmo v. Sebelius.  For additional information, please see the Jimmo v. Sebelius Settlement Agreement Fact Sheet.

Therapy Caps

Annual limitations on incurred expenses for outpatient therapy services under Medicare Part B, per beneficiary, are commonly referred to as “therapy caps.”  The therapy caps are determined on a calendar year basis; therefore, all patients began a new cap year on January 1, 2013.  For physical therapy (PT) and speech-language pathology services (SLP) combined, the limit on incurred expenses is $1,900 in 2013.  For occupational therapy (OT) services, the limit is $1,900 in 2013.  Deductible and coinsurance amounts applied to therapy services count toward the amount accrued before a cap is reached.

An exceptions process to the therapy caps has been in effect since January 1, 2006 and is in effect through December 31, 2013.  For claims over the cap, therapy service providers may continue to submit claims with the KX modifier, when an exception is appropriate, for services furnished through December 31, 2013.  To request an exception to the therapy caps, therapy suppliers and providers use the KX modifier on claims for services after the beneficiary’s services for the year have exceeded the therapy cap.  By use of the KX modifier, the therapist is attesting that the services are reasonable and necessary and that there is documentation of medical necessity in the beneficiary’s medical record.  Follow manual policies that apply when exceptions are in effect.

In the Middle Class Tax Relief and Job Creation Act (MCTRJCA), Congress required establishment of a manual medical review process as part of the therapy exceptions process for therapy services claims in excess of the $3,700 threshold from October 1, 2012 to December 31, 2012.  The American Taxpayer Relief Act (ATRA) extends the manual medical review process through December 31, 2013.  The statute establishes two threshold amounts of $3,700 (one for each therapy cap amount), and requires a manual medical review process of claims over these new thresholds.  

For information about the manual medical review process, go to the Medical Review and Education website. For other information on therapy caps and manual medical review of therapy claims above the $3,700 threshold, visit the Medical Review and Education website’s Therapy Cap section.

The therapy caps have applied to all outpatient therapy services except those furnished in hospital outpatient departments.  In the MCTRJCA, Congress temporarily applied the therapy caps to services provided in hospital outpatient departments from October 1, 2012 to December 31, 2012.  This provision was extended through December 31, 2013 by ATRA.  In addition, ATRA counts outpatient therapy services furnished by a critical access hospital (CAH) towards beneficiary’s annual cap and threshold limitation.  According to the statute, such services are counted as it they were paid under section 1834(k)(1)(B), which is how outpatient therapy services furnished by hospitals and certain other entities are paid, instead of being paid as a CAH.  The ATRA provision does not change the method of payment for therapy services furnished by a CAH.

For information about 2013 Medicare Limits on Therapy Services, please view the Beneficiary Fact Sheet on Medicare Limits on Therapy Services.