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Therapy Services


Therapy Services Updated  

This Therapy Services landing page is being updated to reflect the therapy provisions of the Bipartisan Budget Act of 2018 (BBA of 2018). It adds a new section titled “Latest Applicable Law” to replace the “Therapy Caps” section; and it also adds an Advance Beneficiary Notice of Noncoverage (ABN) Frequently Asked Questions (FAQ) document to the Downloads section – See “August 2018 ABN FAQs”. This spotlight was added August 2018.

Latest Applicable Law

This section was last revised in August 2018 to include the latest revisions to Medicare law. On February 9, 2018, President Trump signed into law the Bipartisan Budget Act of 2018 (BBA of 2018) (Public Law 115-123). This new law includes two provisions related to Medicare payment for outpatient therapy services including physical therapy (PT), speech-language pathology (SLP), and occupational therapy (OT) services:

The new law, through section 50202 of the BBA of 2018, preserves the former therapy cap amounts as thresholds 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. Just as with the incurred expenses for the therapy cap amounts, there is one amount for PT and SLP services combined and a separate amount for OT services. This amount is indexed annually by the Medicare Economic Index (MEI). For CY 2018 this KX modifier threshold amount is:

  • $2,010 for PT and SLP services combined, and
  • $2,010 for OT services.

Along with this KX modifier threshold, the new law retains the targeted medical review (MR) process (first established through Section 202 of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA)), but at a lower threshold amount of $3,000. For CY 2018 (and each calendar year until 2028 at which time it’s indexed annually by the MEI), the MR threshold is $3,000 for PT and SLP services and $3,000 for OT services. The targeted MR process means that not all claims exceeding the MR threshold amount are subject to review as they once were. For a general overview of the MR process, go to the Medical Review and Education website. Lastly, Section 50202 of the BBA of 2018 did not change the provider liability procedures which first became effective January 1, 2013 (with passage of The American Taxpayer Relief Act of 2012 (ATRA)) and continues to provide limitation of liability (LOL) protections to beneficiaries receiving outpatient therapy services when services are denied for certain reasons, including failure to include a necessary KX modifier. Please refer to the document titled  “August 2018 ABN FAQs” posted in the Downloads section below. 

Section 53107 of the BBA of 2018, additionally requires CMS, using a new modifier, to make a reduced payment for OT and PT services furnished in whole or in part by occupational therapy assistants (OTAs) and physical therapist assistants (PTAs) at 85 percent of the applicable Physician Fee Schedule payment amount/rate for the service effective January 1, 2022. The BBA of 2018 establishes interim dates for accomplishing the payment reduction via rulemaking: (a) new assistant modifier created by January 1, 2019 and (b) the modifier is required on claims beginning January 1, 2020.

For beneficiary information about 2018 Outpatient Therapy Services, please view the Beneficiary Fact Sheet on Medicare Limits on Therapy Services.

If you have questions about the Medicare Program, you should first get in touch with your Medicare Contractor. To find contact information, please use the Provider Compliance Interactive Map.

For more information about other outpatient therapy payment policies, please see:

  • The Medicare Claims Processing Manual, Chapter 5

For applicable coverage policies for therapy services, please refer to the Medicare Benefits Policy Manuals:

  • Sections 220 and 230 of Chapter 15 and Chapter 12 for PT, OT, and SLP services in Comprehensive Outpatient Rehabilitation Facilities


A New Advance Beneficiary Notice of Noncoverage (ABN) Frequently Asked Questions (FAQs) Document Is Now Available

On August 16, 2018, CMS issued a new Advance Beneficiary Notice of Noncoverage (ABN) Frequently Asked Questions (FAQ) document to reflect the changes of the Bipartisan Budget Act of 2018. Please find the document in the below Downloads section titled: “August 2018 ABN FAQs”.