The therapy cap sunset. What happens now? The 20 year “Stop the Therapy Cap” campaign came to an end with the passage of the Bipartisan Budget Act of 2018. The therapy cap was permanently eliminated, so there is no need to worry, at the end of each year, to lobby for carry over of the therapy cap exceptions process.
Here is a recap of the therapy cap sunset provisions:
- The therapy cap was permanently eliminated retroactive to January 1, 2018.
- The cap amount of $2010, which was specified in the Medicare Physician Fee Schedule Final Rule, will be used by CMS as an edit for medical necessity.
- All therapy at or over $2010 for physical therapy and speech-language pathology combined, and $2010 for occupational therapy will require the KX modifier as an attestation of medical necessity.
- The threshold for manual medical review was lowered from $3700 to $3000. Therapy claims over $3000 for physical therapy and speech language pathology combined, and $3000 for occupational therapy are subject to review based upon analytics. The legislation noted that there is no additional money for review activities, however it is unclear if the money CMS had previously allocated for manual medical review activities remains available.
- The Bipartisan Budget Act of 2018, in a move that caught the therapy industry by surprise, requires the implementation of a process to reduce Medicare reimbursement for therapy provided by physical therapist assistants (PTA) and occupational therapy assistants (OTA). The process involves the development of a modifier to be used for claims wherein the treatment was provided by a PTA or an OTA, and by 2022 the implementation of payment reduction.
What happens now for therapy providers?
All medically necessary therapy should be provided to Medicare beneficiaries and the KX modifier should be appended to claim lines at or above $2010 for each of the therapy caps. This is not really a change in departure from the past, as CMS is using the “identified” therapy cap amount from the 2018 fee schedule as a new threshold point for medical necessity attestation. The threshold of $3000 for manual medical review indicates a lower threshold for targeted reviews.
The use of the Advanced Beneficiary Notice (ABN) of non-coverage should be used for therapy that is not medically necessary. The ABN should not be preemptively used for each beneficiary at any time, whether it be the start of therapy or at the $2010 “cap” amount or the $3000 “threshold” amount. In order for an ABN to be valid it must be issued to the beneficiary (and signed) before the therapy is provided and it must be properly coded to the claim. Signed ABNs that are “kept on file” in the patient’s record, but have not been coded to the claim are not valid ABNs and cannot be used to transfer liability to the beneficiary. We wrote several posts on the ABN when CMS changed liability for therapy over the cap to the provider, unless a valid ABN was in place.
Do you have policy in place to ensure that Medicare beneficiaries receive medically necessary therapy, and it is billed to Medicare? Do you understand the requirement of the ABN?