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  • Writer's picturePatientStudio

Understanding the Medicare Physical Therapy Cap 2024

The Medicare Physical Therapy Cap, an essential element of the Balanced Budget Act (BBA) 1997, was originally designed as a temporary cost-control measure. Despite a strong push for its repeal, Congress continued to renew it each year until 2018. This year, the cap was replaced with a soft cap, otherwise known as an annual threshold amount.


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What is the Physical Therapy Medicare Cap for 2024?

The therapy threshold for Calendar Year (CY) 2024 is $2,330 for physical therapy and speech-language pathology services combined and $2,330 for occupational therapy services. A $100 increase from last year’s amount for both. After passing the cap, the KX modifier must be affixed to all claims for medically necessary services that exceed this threshold.


Services That Count Towards the Therapy Threshold

The Physical Therapy Medicare Cap for 2024 applies to all Part B outpatient therapy services furnished in various locations. It is crucial to note that therapy services received due to multiple diagnoses over the benefit period all count towards the patient's threshold. The threshold, however, should not deter Medicare patients from receiving medically necessary care.


How to Calculate a Patient's Progress Towards the Therapy Threshold

Every time a new patient seeks treatment, it's essential to determine whether the patient has received any other therapy services during the current benefit period. These services would apply to the threshold. The patient's progress towards the therapy threshold is calculated using the allowable fee schedule. Therapists can request a history of the therapy services a patient has received from CMS by contacting their Medicare contractor if the patient is unable to provide this information.


Understanding the Therapy Threshold Exceptions Process

The therapy threshold is not the ultimate limit of reimbursement for a particular patient. If a therapist believes that continuing therapy with a patient is medically necessary and thus qualifies the patient for an exception to the threshold, they simply need to attach the KX modifier to the claims that exceed the threshold and clearly document their reasons for continuing treatment.


Automatic Exceptions (KX Modifier)

By attaching the KX modifier to a claim, therapists attest that the services billed qualify for the threshold exception, are reasonable and necessary, require the skills of a therapist, and are justified by supporting documentation in the patient's medical record. The automatic exceptions process can be used to treat beyond the threshold.


Targeted Medical Review

If a patient's treatment expenses surpass $3,000, these claims may be subject to a targeted medical review. However, not all claims that exceed the threshold will be targeted for review. Instead, auditors will select claims above the threshold to review based on specific criteria.


Advance Beneficiary Notice of Noncoverage (ABN)

If a therapist would like to continue therapy for a patient who has exceeded the threshold but does not qualify for an exception, they can do so through the use of an Advance Beneficiary Notice of Noncoverage (ABN). An ABN notifies a Medicare patient that Medicare might not cover the therapy services they are about to receive and serves as proof that the patient understands their financial obligation.


Medical Necessity and the GA Modifier

The medical necessity of services is determined based on the cost of treatment in relation to the patient's chances of reaching a desired level of relief or functional improvement and the treatment's potential to mitigate the patient's risk of suffering an even worse outcome if the current condition is left untreated. When services are not medically reasonable and necessary, therapists should issue an ABN and add the GA modifier to the claim.


Conclusion

Understanding the Therapy Medicare Cap and its related elements such as the modifier KX, therapy threshold, Advance Beneficiary Notice of Noncoverage, and GA modifier is crucial for therapists. This knowledge ensures accurate physical therapy billing and compliance with Medicare regulations. As therapists navigate through the complexities of these regulations, the focus remains on providing medically necessary care to patients.

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