Halloween and the whole pretend thing may be over, but follow me for a second: when a Medicare patient comes to you for treatment, it’s critical that you also play the roles of investigator and lawyer (though costumes are optional). Clearly documenting the therapy services you are providing during the current benefit period—without skimping on the details—can potentially save you from an audit. In fact, your documentation is like evidence in a court case. So, toss aside your PT hat for a second, put on your finest threads, and rise—the court is now in session, with the honorable Judge Marty Medicare presiding.

The PT’s Guide to Billing - Regular BannerThe PT’s Guide to Billing - Small Banner

Presenting Your Case to Medicare

Knowing that—while in court or in your clinic—you must give the whole truth and nothing but the truth, you, as a lawyer (I mean, therapist), must present an honest and detailed case for every patient. That means documenting (i.e., providing evidence of) his or her prior and current levels of function throughout treatment. It’s also imperative that you keep a pulse on each patient’s progress toward the therapy cap ($1,960 in 2016 for physical and speech therapy combined, and $1,960 for occupational therapy). That way, you can prepare to testify—err, justify—whether:

  1. further treatment during the current benefit period is medically necessary, or
  2. you should complete your documentation and discharge the patient.

Gathering Supporting Evidence

And of course, proving to Medicare why you believe continued therapy is medically necessary for a certain patient hinges on—you guessed it—evidence. So, if your clinical assessment—and your documentation—demonstrate beyond a reasonable doubt that additional therapy is, in fact, medically necessary, all you have to do is attach the KX modifier to the claim and continue treating the patient beyond the cap. There’s no need to submit additional documentation in order to use the KX modifier during a patient’s current benefit period. But, by attaching the KX modifier to a claim, you attest to Medicare—and your patient—that the services billed:

  • qualify for the cap exception;
  • are reasonable and necessary;
  • require the skills of a therapist; and
  • are justified by supporting documentation in the patient's medical record.

Proving Your Case to the Judge

Now, you can use the KX modifier up until the patient hits the $3,700 threshold (this is known as the automatic exceptions process). But, as of February 2016, the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) eliminated the manual medical review process of all claims exceeding the threshold and instead allows for a targeted review process. You can learn more about this updated process and the criteria for claims review at this link.

Delivering Closing Arguments

Finally, let’s say a patient has exceeded the cap but does not qualify for an exception. If you’d like to continue treating the patient—even though your services are no longer medically necessary—and the patient agrees to pay for that treatment out-of-pocket, he or she can sign an Advance Beneficiary Notice of Noncoverage (ABN). Essentially, this means your patient has given you sworn testimony that he or she will pay cash for your services if Medicare denies the claim. Keep in mind, though, that there are rules about when and how you can use ABNs. It’s not appropriate to issue ABNs to every single patient—and doing so could land you in hot water with Medicare.


Building—and justifying—your case for providing rehab therapy services beyond the Medicare cap can be tricky. But ultimately, it’s your documentation that validates whether your actions, decisions, and services will allow for (Judge) Medicare to rule in your favor by rendering a verdict for proper and timely reimbursement.

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