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The Medicare program limits how much it will pay in one calendar year for medically necessary outpatient (Part B) therapy services, including services furnished by a skilled nursing facility (SNF) to outpatients or residents not otherwise eligible for Part A benefits. The limit is called the “therapy cap.” In 2015, the therapy cap limit is $1,940 for physical therapy (PT) and speech-language pathology (SLP) services combined; and $1,940 for occupational therapy (OT) services. After the annual Medicare Part B deductible is paid ($147 in 2015), Medicare will pay up to 80% of the Medicare-approved amount for each service and the Medicare beneficiary is responsible for the remaining 20%. Medicare will pay its share for therapy services until the total amount paid by both Medicare and the beneficiary reaches either one of the therapy cap limits.

Currently, a beneficiary may qualify for an exception to the therapy cap limit (which would allow Medicare to pay for services after the patient reaches the therapy cap limit) if he or she receives medically necessary PT, SLP, and/or OT services over the $1,940 therapy cap limit, and the therapist attests that continued services are medically necessary. If the beneficiary is approaching the therapy cap limit, the therapist must determine whether it is medically necessary to continue therapy.

In order to continue receiving therapy, the therapist must document the need for medically necessary services in the medical record. The therapists must also indicate on the Medicare claim through use of the KX modifier for all procedures furnished above the cap threshold that services above the therapy cap limit is medically reasonable, necessary and documented in the medical record.

Beginning in 2013, CMS revised the beneficiary liability policy related to the therapy cap and exceptions process. Read about the revision in the MMR section.

If Medicare denies the therapy claim, an appeal can be submitted through the regular Medicare appeals process.

AHCA Says SNF patients are most harmed by annual caps on therapy services… read more​

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