Update: The therapy cap has been repealed as of February 9, 2018. Scroll to the last section of this post for details.

Nowadays, you might be tempted to tune out, turn off, and log out at the mere mention of anything political. And considering the current climate within our legislative system, I certainly wouldn’t fault you for wanting to avoid the chaos. However, putting on the blinders could prevent you from learning crucial information. After all, the healthcare industry is deeply tied to American politics.

This past month, rehab therapists found themselves caught in the middle of the melodrama playing out in Washington, DC: at the end of 2017, Congress failed to pass legislation that would ensure the continuation of the therapy cap exceptions process—meaning PTs, OTs, and SLPs entered the new year unable to use of the KX modifier. Thus, for the first time since the therapy cap was introduced, a hard cap went into effect for 2018, putting immense pressure on therapists who treat Medicare patients. Fortunately, the year is still young enough that most patients haven’t met the $2,010 cap. However, if Congress doesn’t act fast, there’s going to be a lot of uncertainty among rehab therapists—and a lot of patients left without coverage for therapy services.

So, what’s going on with the 2018 therapy cap anyway? And what are providers supposed to do when patients exceed the cap? You might be asking yourself these questions—and several others—if you haven’t been following the therapy cap saga closely. Fortunately, CMS and APTA haven’t left providers out in the cold. Here’s everything you need to know about the therapy cap in 2018:

The State of Rehab Therapy in 2018 - Regular BannerThe State of Rehab Therapy in 2018 - Small Banner

What happened in December?

As we mentioned in our post covering the 2018 final rule, the terms of the exceptions process were set to expire on December 31, 2017, as were the terms of the manual medical review process. This wasn’t exactly breaking news at the time; after all, Congress has always voted to extend the exceptions process, thus barring the enforcement of a true cap. But, as you may remember, Congress was a bit tied up in the final weeks of 2017, and the vote to extend the exceptions process was postponed until January 2018.

Wasn’t the therapy cap going away?

Yes—well, almost yes. As APTA notes in this article, lawmakers reached a bipartisan, bicameral deal last fall that would’ve completely eliminated the cap on therapy services in favor of a targeted claims review process (much like the manual medical review process implemented in 2015 for claims exceeding the $3,700 threshold). Originally, this deal was going to be included in a much larger Medicare omnibus ruling. Unfortunately, congressional conflict over the December 2017 tax bill—among other things—took focus away from less pressing issues, thus delaying further action.

What should therapists do with 2018 claims that go over the $2,010 cap?

This one is a little tricky, and the answer depends on what providers and practice billers feel is the best course of action for their own revenue cycle management processes.

Option 1: Use an Advance Beneficiary Notice of Noncoverage

In its responses to comments on this FAQ, APTA advised providers to:

  • issue an Advance Beneficiary Notice of Noncoverage (ABN) before furnishing any services that exceed a patient’s therapy cap,
  • affix the GA modifier to claims expected to exceed the cap,
  • anticipate that Medicare will deny the service for lack of medical necessity, and finally,
  • bill the patient directly—or bill the patient’s secondary insurance if the adjustment amount is identified with a PR group code. (Make sure that the patient has completed the secondary insurer’s coordination of benefits form.)

Option 2: Apply the KX Modifier

Technically, obtaining an ABN and applying the GA modifier is the correct way to submit claims exceeding $2,010 based on the current law. However, if the KX modifier is reinstated retroactively—as CMS anticipates—GA modifier use could cause issues for providers who choose to resubmit those claims. That’s why CMS recommends that therapists apply the KX modifier to claims exceeding the cap and submit them as usual. If your practice chooses this course of action, do not issue an ABN to patients who go over the cap, as this could be considered unethical.

Option 3: Hold Claims Until Legislation is Passed

Your other option would be to hold any claims for dates of service in 2018 that would exceed the therapy cap and submit them after Congress takes action to remove the hard cap. However, there’s no guarantee that Congress will (1) take action and (2) apply any retroactive fix to claims dated prior to the passage of therapy cap exceptions legislation.

What is CMS doing with unprocessed claims that exceed the therapy cap?

On January 1, 2018, with no legislation to ensure the continuation of the exceptions process, CMS began holding any claims with a “date of receipt” occurring between January 1 and January 10 that contained the KX modifier. (CMS paid any claims that did not have the KX modifier as long as they did not exceed the cap, but denied claims that went above the $2,010 limit and did not have the KX modifier.) The language from CMS is a little vague, but it seems to imply that any claims received by CMS between January 1 and January 10—including claims for dates of service in 2017—that contained the KX modifier were held. Then, as of January 25, CMS began processing the held claims it received between January 1 and January 10.

As for any claims received after January 10, CMS began processing these as of January 31. Going forward, Medicare is processing any claims received after January 10 on a 20-day rolling hold. (For example, if Medicare received a claim on January 20, it’ll process the claim on February 9, and if Medicare received a claim on February 9, it’ll process the claim on March 1—barring any sort of legislative changes that occur before that time.)

What happens if Congress fails to pass legislation?

Right now, that isn’t totally clear. However, APTA and its partners in the Repeal the Therapy Cap Coalition continue to pressure Congress to include a proposal for permanently repealing the therapy cap in the next congressional budget deal—which Congress must pass by February 8 in order to avoid another government shutdown. However, with many pressing—and controversial—issues still at stake, it’s hard to know if Congress will prioritize a therapy cap solution. Still, APTA remains optimistic.


So, the epic saga continues. And while CMS and APTA have been doing their best to keep therapists in the loop, we’ll have to continue keeping our ears to the ground. But, that doesn’t mean providers have to sit idly by. Now more than ever, rehab therapists must make their voices heard. Contact your representatives via email, phone, and social media to let them know that PTs, OTs, and SLPs need a permanent therapy cap solution ASAP. With so many legislative items on the docket, it’s easy for some things to get brushed aside. But, as a rehab therapist, you simply can’t afford to be brushed aside any longer, and neither can your patients.


Update: The therapy cap has been repealed!

As of February 9, 2018, the Medicare therapy cap is no more. In the early hours of the morning, the Senate voted in favor of a stopgap spending bill that includes language that permanently repeals Medicare’s $2,010 hard cap on therapy services. This change is effective for all claims occurring on or after January 1, 2018.

However, providers may not notice any significant changes on the billing end compared to previous years. Therapists must still track total claim amounts for Medicare beneficiaries and apply the KX modifier to claims exceeding the $2,010 threshold. Additionally, the targeted review process will now apply to therapy claims exceeding $3,000 for each individual patient—instead of $3,700, as was the case in previous years.

The new law also changes reimbursement for services provided by physical therapist assistants and occupational therapy assistants. Starting January 1, 2022, services furnished by PTAs and OTAs will be reimbursed at 85% of the usual rate. This measure theoretically offsets the extra expenditures associated with the cap repeal. The law also includes changes affecting home health services, including the establishment of a 30-day episode for payment.

To read a breakdown of the entire bill, check out this resource from the House Committee on Rules.

  • When to Use the KX Modifier Image

    articleOct 8, 2018 | 3 min. read

    When to Use the KX Modifier

    In the months since the elimination of the hard cap on therapy services , it seems like rehab therapists are more confused than ever about when they should affix the KX modifier versus issue an Advance Beneficiary Notice of Noncoverage (ABN) . The truth of the matter is that not much has changed operationally since the Medicare therapy cap repeal—aside from the name of the cap (i.e., what was once the “hard cap” is now called the …

  • The Definitive Medicare Part B FAQ for Outpatient PT, OT, and SLP Image

    articleOct 27, 2016 | 33 min. read

    The Definitive Medicare Part B FAQ for Outpatient PT, OT, and SLP

    In October, we hosted a webinar dedicated to the most common Medicare misconceptions . We received a lot of questions from the audience—so many, in fact, that we’ve organized them all into one huge FAQ. Scroll through and check them out, or use the link bank below to skip to a particular section. The Therapy Cap ABNs Modifiers Supervision Prescriptions and Certifications Cash-Pay Rules and Regulations Re-Evaluations Everything Else   The Therapy Cap If a patient reaches …

  • CMS’s Final Bow: The 2019 Final Rule Image

    articleNov 5, 2018 | 8 min. read

    CMS’s Final Bow: The 2019 Final Rule

    Last week, the Centers for Medicare and Medicaid Services (CMS) published its 2019 final rule . Clocking in at just over 2,300 pages, the final rule isn't exactly a light read—especially because the legal lingo can be harder to interpret than Shakespearean verse. Luckily, we have the script—with all its twists and turns—decoded and ready for you to review. Here's the synopsis of all the physical therapy, occupational therapy, and speech-language pathology Medicare changes for 2019: Out, …

  • The Complete PT Billing FAQ Image

    articleMay 24, 2016 | 25 min. read

    The Complete PT Billing FAQ

    Over the years, WebPT has a hosted a slew of billing webinars and published dozens of billing-related blog posts. And in that time, we’ve received our fair share of tricky questions. Now, in an effort to satisfy your curiosity, we’ve compiled all of our most common brain-busters into one epic FAQ. Don’t see your question? Ask it in the comments below. (And be sure to check out this separate PT billing FAQ we recently put together.) Questions …

  • The Cap is Gone, But KX Lives On: How to Handle Therapy Claims in 2018 Image

    articleApr 9, 2018 | 5 min. read

    The Cap is Gone, But KX Lives On: How to Handle Therapy Claims in 2018

    It happened in the middle of the night: after months of debate and hours of back and forth that went until 3 AM on February 9, 2018, the Senate voted 71-28 in favor of a stopgap budget bill—known as the Bipartisan Budget Act of 2018—that officially repealed the Medicare cap on therapy services . PTs, OTs, and SLPs around the country—especially those with Medicare claims sitting in limbo as they awaited further instruction from CMS—breathed a collective …

  • Denial Management FAQ Image

    articleMay 26, 2017 | 22 min. read

    Denial Management FAQ

    During our denial management webinar , we discussed the difference between rejections and denials, explained how to handle both, and provided a five-step plan for stopping them in their tracks. The webinar concluded with an exhaustive Q&A, and we’ve amassed the most common questions here. Insurance Issues Claim Quandaries Compliance Qualms Documentation Dilemmas Front-Office Frustrations Insurance Issues We’ve had issues with auto insurances denying 97112 (neuromuscular re-education) for non-neuro diagnoses, even in cases when the patient’s medical …

  • 9 Most Common Medicare Misconceptions for PTs, OTs, and SLPs Image

    webinarSep 8, 2016

    9 Most Common Medicare Misconceptions for PTs, OTs, and SLPs

    To say that Medicare regulations are confusing is an understatement. But, it’s not just the barely-readable government gobbledygook that throws providers for a loop; it’s also the fact that the rules are always changing. If you treat Medicare patients, we’re willing to bet you’ve been tripped up by at least one of these common misconceptions—maybe without even knowing it. And that could leave a nasty bruise on your practice’s bottom line—especially if you ever find yourself at …

  • Hot Out of the Oven: Highlights of the 2017 Final Rule for PTs, OTs, and SLPs Image

    articleNov 9, 2016 | 8 min. read

    Hot Out of the Oven: Highlights of the 2017 Final Rule for PTs, OTs, and SLPs

    Halloween may be over, but if you didn’t get your fill of scares, I’ve got the perfect activity for you: reading through 1,401 pages of pure Medicare gobbledygook. Screaming yet? (Or should I check back at around page 500?) I kid, of course; there’s no need for you to slog through this year’s extra meaty Final Rule —which details the Medicare fee schedule and other important Medicare regulatory and reimbursement changes for physical therapy, occupational therapy, and …

  • The Ultimate ICD-10 FAQ Image

    articleSep 1, 2015 | 21 min. read

    The Ultimate ICD-10 FAQ

    Yesterday, we hosted the largest webinar in WebPT history . Thousands of rehab therapy professionals attended the live session, which focused on ICD-10 coding examples . As expected, we received a lot of questions. Below is a collection of the webinar’s most frequently asked questions. The Seventh Character Craze What is the seventh character? The seventh character didn’t exist in ICD-9 , so it’s caused a great deal of confusion. Essentially, it’s a mechanism for applying greater …

Achieve greatness in practice with the ultimate EMR for PTs, OTs, and SLPs.