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Medicare Therapy Cap in 2016

November 25, 2015 2 Comments

The Medicare therapy cap in 2016 is set at $1960.  Therapy CapThe therapy cap for physical and speech-language pathology combined is set at $1960 and there is a separate $1960 therapy cap for occupational therapy.   This represents an increase of $20 per cap over the 2015 amount of $1940.  The increment is based upon a medical economic index.  The therapy “threshold” for manual medical review (MMR) continues at $3700, where it was initiated in the 4th quarter of 2012.

Guidance in the Medicare Claims Processing Manual states (emphasis added) “It is very important to recognize that most conditions would not ordinarily result in services exceeding the cap.”  However, of note, Medicare advises beneficiaries this way regarding the therapy over the cap:

In general (when an exceptions process is in effect), if your therapist or therapy provider provides documentation to show that your services were medically reasonable and necessary and indicates this on your claim, Medicare will continue to cover its share above the $1,940 ($1,960 in 2016) therapy cap limits. Because Medicare doesn’t pay for therapy services that aren’t reasonable and necessary, your therapist or therapy provider must give you a written notice, called an “Advance Beneficiary Notice of Noncoverage” (ABN), before providing generally covered therapy services that aren’t medically reasonable and necessary for you at the time. Medicare doesn’t pay for therapy services that aren’t medically necessary. The ABN lets you choose whether or not you want the therapy services. If you choose to get the medically unnecessary services, you agree to pay for them. (source: CMS)

The Medicare Access and CHIP Reauthorization Act of 2015, (MACRA – enacted April 16, 2015) extended the therapy cap exceptions process through December 31, 2017. Changes were also made to the manual medical review process of therapy over $3700, which was to have begun in July, 2015.  The new “review” process is no longer a 100% review of all claims over $3700, but rather a review based on provider profiling and advanced data analytics. The review will focus on providers with patterns of aberrant billing practices, high claims denial percentage, those newly enrolled and other criteria.

Given that the RAC procurement process has been delayed due to bid protests beginning in 2014, there has been an updated Statement of Work (SOW) with an anticipated date of July 2016 for implementation. The therapy cap coalition group has met with CMS to discuss the implementation of the “new” manual medical review process, including discussion of selection of a CMS program integrity contractor to conduct the reviews. (no more RACs?)

Do you understand how the therapy caps exceptions process works?  Do you know how to properly provide an ABN to a beneficiary for services that are not medically necessary?  Does your documentation support therapy over the therapy cap and the $3700 threshold?

Photo: DollarPhotoClub

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Nancy Beckley

Nancy J. Beckley MS, MBA, CHC: President-Nancy Beckley & Associates LLC. Compliance outsourcing, risk assessment, compliance plans, compliance training, auditing, due diligence, investigation support for therapy providers.

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Comments (2)

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  1. Katalin says:

    thank you for this article

  2. Thank you for your kind comment.

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