On February 9, 2018 Congress passed, and the President signed, a spending bill to keep the government operating for two years. Included in the bill was a permanent repeal of the Medicare therapy caps on PT, OT and speech therapy services. Thanks to everyone who worked long and hard on this issue for many years!
Even with the therapy cap repeal, therapists still need to bill with the KX modifier, indicating services are medically necessary, once therapy spending reaches $2,010. This amount will be adjusted annually and is still calculated on PT/Speech services combined, with OT separate. Bills can be denied if the KX modifier is not used on claims which exceed the $2,010 threshold. At the $3,000 threshold (lower than the previous $3,700) there is the potential for a targeted medical review. This review would be triggered by various factors, for example if you are new Medicare provider, or have aberrant billing compared to peers, or belong to a practice whose partners have been flagged for aberrant billing. CMS will not receive any increased funding to pursue expanded medical review, and the overall number of targeted medical reviews is not expected to increase. The $3,000 amount will also be adjusted annually by Medicare Economic Index (MEI) beginning in the year 2028.
This rule will be retroactively applied to all therapy expenses incurred starting January 1, 2018.
However, the news is not all good. The budget deal also includes a provision to offset the cost of the therapy cap repeal that the therapy community did not support and tried to change after it was announced at the last minute. The law allows for a reduction in Medicare Part B payment for services in which a physical therapist assistant (PTA) or occupational therapy assistant (OTA) is involved. Beginning January 1, 2022, payment for services provided by a PTA or OTA would be paid at 85% of the Medicare fee schedule. This was not part of any of the discussions or negotiations on Capitol Hill over the past year, nor was it included as part of the proposed package that was announced this past fall as part of the bipartisan, bicameral agreement. Alternative proposals to eliminate, reduce, or delay the PTA and OTA payment differential were rejected.
The next step is for CMS to develop proposed rules to further define and provide additional guidance prior to implementation of the PTA/OTA rule. With your help, PTPN and other stakeholders will work to mitigate the impact of this provision. We’ll let you know when you can weigh in.
While it may not be perfect, we should take this opportunity to celebrate this achievement! Together we can make a difference!