Medicare Therapy Cap Exceptions Not Yet Renewed
The Balanced Budget Act of 1997 implemented annual, per-Medicare beneficiary limits on reimbursement for outpatient therapy services under Medicare Part B, commonly referred to as “therapy caps.” The therapy caps are updated each year based on the Medicare Economic Index. For physical therapy and speech-language pathology combined, the CY 2018 cap is $2,010. For occupational therapy, the CY 2018 cap is $2,010.
In 2006, Congress enacted an exceptions process to override the caps for reasonable and medically necessary services. The exceptions process for the therapy caps has been extended without a lapse several times through subsequent legislation. Most recently, the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) extended the exceptions process through Dec. 31, 2017. However, Congress has so far failed to pass an extender making Medicare beneficiaries subject to the annual per-beneficiary caps.
The caps apply to Part B outpatient therapy settings including nursing homes, outpatient home health, rehabilitation facilities, and physician and therapy offices/practices. Providers should be prepared to issue an Advance Beneficiary Notice (ABN) to patients before providing services above the cap when there is no therapy coverage exceptions process.
The Centers for Medicare and Medicaid Services (CMS) posted a notice indicating that the agency will temporarily delay the processing of outpatient therapy claims affected by the therapy caps (i.e., those containing the KX modifier) for up to 30 days after receipt. Typically, Medicare Administrative Contractors (MACs) pay clean electronic claims 14 days after receipt. For example, on Jan. 31, 2018, CMS will hold all therapy claims with the KX modifier received that day and release for processing the held claims received on Jan. 11th. Similarly, on Feb. 1st, CMS will hold all therapy claims with the KX modifier received that day and release for processing the held claims received on Jan. 12th, and so on. While this process will allow for additional time for the issue to be resolved, the claims will be denied if Congress does not act.
There seemed to be bipartisan support in the fall of 2017 for repealing the caps. In October, the House Ways and Means Committee announced a bipartisan agreement to repeal the caps and replace them with a medical review process to identify and address systemic outliers while protecting patient access to necessary therapy. The next month, the Committee announced a bipartisan agreement on Medicare provisions that were expiring that included a repeal of the caps. LeadingAge is part of the large community of patient advocacy, professional, and provider groups that support the bipartisan agreement on outpatient therapy and are urging Congress to resolve this issue.
Contact: Darius Kirstein, dkirstein@leadingageny.org, 518-867-8841