TherapyCaps and Threshold Provisions Extended

on Thursday, 03 January 2013. All News Items | AL Medicaid | Billing

On Wednesday, January 2, 2013, President Obama signed into law the American Taxpayer Relief Act of 2012. In addition to preventing payment cuts under the Medicare Physician Fee Schedule (MPFS), the new law extends certain provisions related to Medicare outpatient therapy services.

  • It extends the exception process for outpatient therapy caps through December 31, 2013. This means that outpatient therapy providers may request an exception to the therapy cap by submitting a KX modifier with therapy services beyond the cap limit that are medically necessary.
  • The new law extends the application of the cap and threshold to therapy services furnished in a hospital outpatient department (OPD), and counts outpatient therapy services furnished in a Critical Access Hospital towards the cap and threshold. Prior to October 2012, therapy cap limitations did not apply for outpatient therapy services provided in a hospital outpatient department.
  • The law also extends the mandate that Medicare perform manual medical review of therapy services furnished January 1, 2013 through December 31, 2013, for which an exception was requested when the beneficiary has reached a dollar aggregate threshold amount for the year.

For 2013 the therapy cap amount is $1900 for physical therapy and speech language pathology services combined and a separate financial limit of $1900 for occupational therapy. Deductible and coinsurance amounts applied to therapy services count toward the amount accrued before a cap is reached, and also apply for services above the cap where the KX modifier is used. The threshold amounts for manual medical review for 2013 remain at $3700 for PT/SLP and $3700 for OT.

Additional information about these provisions will likely be forthcoming from Medicare, for example whether Medicare will continue the prior approval process for claims with therapy services that exceed the threshold.

Article by Debbie Rubio

Debbie Rubio, BS, MT (ASCP), is the Manager of Regulatory Affairs and Compliance at Medical Management Plus, Inc. Debbie has over twenty-seven years of experience in healthcare including nine years as the Clinical Compliance Coordinator at a large multi-facility health system. In her current position, Debbie monitors, interprets and communicates current and upcoming regulatory and compliance issues as they relate to specific entities concerning Medicare and other payers. You may contact Debbie at This email address is being protected from spambots. You need JavaScript enabled to view it. .

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