Should I have my patients sign an advance beneficiary notice of noncoverage (ABN) just in case Medicare doesn’t pay?

No, by having your patient sign an ABN, you are acknowledging that you do not believe that the services you are providing are either medically necessary or covered by Medicare. If you have an ABN on file, you should include a GA or GX modifier on your claim so Medicare knows to deny the claim and assign financial responsibility to the patient. If you submit a claim to Medicare without acknowledging that you know the services are either not covered or not medically necessary, and Medicare denies the claim, you may not go to the patient for payment.

What is the difference between a required ABN and a voluntary ABN?

According to CMS, "therapists are required to issue the ABN to original (fee-for–service) Medicare beneficiaries prior to providing therapy that is not medically reasonable and necessary regardless of the therapy cap." However, "...when a provider/supplier provides a service that Medicare never covers, such as a service that fails to meet the definition of a Medicare benefit or a service that is explicitly excluded from coverage under §1862 of the Act, the limitation of liability protections in §1879 of the Act don’t apply. So, there is no requirement for suppliers/providers to alert beneficiaries to forthcoming financial liability prior to providing a never covered service. However, suppliers/providers may issue the ABN, Form CMS-R-131 as an optional notice to alert the beneficiary to liability." Because this type of notice is optional, it’s often referred to as a “voluntary” ABN. For more information, check out this FAQ doc.

Is the therapy cap based on allowable charges or what I bill?

The therapy cap is based on allowable charges according to your region’s Medicare fee schedule.

Do I need to obtain prior authorization before applying the KX modifier?

No, right before you hit the $1,920 cap, simply begin attaching the KX modifier to your claims. Just make sure you have complete and defensible documentation that supports the medical necessity of your services. (You do not need to include this documentation with your claim. Rather, keep it on file so you have it available should you receive a request for additional documentation.)

Is attaching a KX modifier an automatic red flag for an audit?

No, attaching a KX modifier is perfectly acceptable, as long as the services you wish to provide in excess of the cap are, in fact, medically necessary. Medicare may request additional information—or conduct an audit—if your KX modifier practices fall outside of the norm. In other words, if you use it significantly more or less than your regional peers, Medicare may want to know more.

But I thought all therapy services required the KX modifier. Is this not the case?

No, it isn’t. As the APTA explains, "The provider should use the KX modifier to the therapy procedure code that is subject to the cap limits only when a beneficiary qualifies for a therapy cap exception. By attaching the KX modifier, the provider is attesting that the services billed:

  • Qualified for the cap exception;
  • Are reasonable and necessary services that require the skills of a therapist; and
  • Are justified by appropriate documentation in the medical record.

If I know early on that my patient is going to exceed the therapy cap, what should I do?

You should immediately begin thoroughly documenting why you believe the patient will exceed the therapy cap. However, you should not include the KX modifier on your claims until you are as close as possible to reaching the cap without going over. Attaching the KX modifier before it is necessary is a big red flag and could very well result in an audit.

Is there an upper limit for the therapy cap?

No, there is no upper limit as long as the services you’re providing your patient are medically necessary. However, there are additional steps. Once you reach the $1,920 cap, you should begin including the KX modifier on all claims for that patient; this is the automatic exception process. If you believe treatment beyond the manual medical review threshold of $3,700 is medically necessary, either your Medicare Administrative Contractor (MAC) will notify you that you must submit the appropriate documentation to an assigned Recovery Audit Contractor (RAC) (if you are in a prepayment review state) or you will continue to receive reimbursement until you submit the appropriate documentation to your RAC, who will determine whether the services are covered (if you are in a post-payment review state). In the latter scenario, you’ll have to reimburse Medicare if they deem the services in question as not medically necessary.

Am I in a pre- or post-payment review state?

Prepayment review states are Florida, California, Michigan, Texas, New York, Louisiana, Illinois, Pennsylvania, Ohio, North Carolina, and Missouri. All other states are post-payment review states.

Does the therapy cap apply to initial evaluations and reevaluations?

Evaluations and reevaluations do count toward the cap, unless you’re performing either specifically for the purposes of determining if additional services are medically necessary. If that’s the case, those evaluations will only count if you provide any treatment during the same visit.

How do I know if the services I want to provide are medically necessary?

If you’re questioning whether or not the services you want to provide are medically necessary, ask yourself these questions:

  1. Are the services you are providing critical to the patient’s ability to function adequately in his or her daily life?
  2. Has the patient not yet reached his or her prior (or maximum) level of function?

If either answer is yes, you should continue treating the patient above the therapy cap by applying the KX modifier. If either answer is no, you may want to consider discharging the patient or providing services on a cash-basis, in which case you’ll want to collect an ABN and attach the GA modifier to the claim.

Do I have to bill a non-covered charge to Medicare or can I just collect payment directly from the patient?

You still need to bill Medicare for non-covered services. In those cases, you'd file a voluntary ABN with the patient, attach the appropriate G modifier to your claim, and then once you receive a denial from Medicare, you can collect from the patient.

If Medicare rejects my claim because of the cap, can I go back and rebill with the KX modifier?

Yes, if you receive a claim rejection because of the cap, you may go back and rebill using the KX modifier. Just make sure your documentation thoroughly supports the medical necessity of your services.

How do I track the therapy cap?

It is important to ask all new patients if they have received any therapy services at any time during the year as all PT, OT, and SLP services will apply to their cap. To determine how close the patient is to reaching the cap, you can safely assume $80 to $100 per visit.

Additionally, you can access this information through CMS in one of two ways:

  1. You can electronically view dollar amounts accrued toward the therapy limits on the ELGA or ELGB screens within the CWF (Common Working File) or on the HIQA screen for those providers who bill through fiscal intermediaries, or
  2. You can contact your Medicare contractor directly and request information regarding therapy services provided to a particular beneficiary. The amount accrued toward the financial limit is based on claim received date rather than the date of service.

You can also track your patients’ progress towards the cap within WebPT. To learn how, check out our therapy cap report user guide.

What services will Medicare not cover?

There are three reasons why Medicare would not cover therapy services:

  1. If the therapist provides services for prevention, wellness, or fitness
  2. If the documentation or claim lacks something required, such as the plan of care
  3. If Medicare does not consider the services reasonable and medically necessary

Do I need to provide Medicare with supporting documentation when I submit my claim?

No, you don't need to submit documentation to support the use of the KX modifier, unless Medicare requests you to do so. However, you should always have it ready to go just in case.

What are the differences between GA, GX, GY, and GZ?

GA: Indicates that a required ABN is on file for a service or item not considered reasonable and medically necessary

  • Allows provider to bill the patient or a secondary insurance if Medicare doesn’t cover services
  • Ensures Medicare will automatically assign liability to the beneficiary upon denial
  • Medicare will use claim adjustment reason code 50 when denying lines due to the presence of the GA modifier (e.g., “These are noncovered services because this is not deemed a ‘medical necessity’ by the payer.”)

GX: Indicates a voluntary ABN was issued for non-covered services

  • Prompts automatic rejection from Medicare
  • Medicare systems will recognize and allow the GX modifier on claims, but will return the claim if the GX modifier is used on any line reporting covered charges
  • Can be combined with modifiers GY and TS (to indicate beneficiary liability) but not EY, GA, GL, GZ, KB, QL, or TQ
    • TS = Follow-up service
    • EY = No doctor’s order on file
    • GL = Medically unnecessary upgrade provided instead of non-upgraded item; no charge and no ABN
    • KB = Beneficiary requested upgrade for ABN; more than four modifiers identified on claim
    • QL = Patient pronounced dead after ambulance is called
    • TQ = Basic life support transport by a volunteer ambulance provider

GY: Indicates a non-covered service

  • Used when an ABN is not on file; patient is inherently liable for charges because it’s a non-covered service

GZ: Indicates that you expect the service to be denied because it isn’t medically necessary

  • Used when an ABN may be necessary but was not issued; patient is not responsible for payment

What is modifier 59?

Modifier 59 tells Medicare that you performed a procedure or service separately and distinctly from another non-evaluation and management service on the same day and thus should receive payment for both CPT codes. For more information on how to appropriately use modifier 59—and support its use through documentation—check out this blog post by compliance expert Tom Ambury.

Where can I find a list of codes with which use of modifier 59 is appropriate?

You will find all of the CCI edit pairs applicable to modifier 59 in the chart at the bottom of this blog post.

To which code should I apply modifier 59?

You should apply the modifier to the secondary code in the edit pair. Secondary codes are those listed in the far right column of the chart at the bottom of this blog post. Please note that you only need to apply modifier 59 to the individual code in question, not all line items.

Will WebPT automatically apply modifier 59 when appropriate?

As long as you have selected that setting within the application, WebPT will automatically apply the 59 modifier when required. If you need any assistance with this, our Support team would be happy to help you out. Simply call 866-221-1870, option 2, or email

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