Changes to 2012 Medicare Therapy Cap Take Effect on October 1

The Centers for Medicare and Medicaid Services (CMS) have provided guidance to the changes in this year’s therapy services beginning October 1, 2012.  The 1997 Balanced Budget Act established financial limitations on outpatient therapy services in all settings except outpatient hospital.  Some exceptions to these limitations were enacted by the 2005 Deficit Reduction Act, and these have been extended several times, most recently by the Middle Class Tax Relief and Job Creation Act of 2012. 

The full report from CMS can be found here with a CMS summary here.

For 2012, the therapy caps are set at $1880 for physical therapy and speech language pathology services, and a separate $1880 cap on occupational services, if those services are provided on an outpatient basis in a non-hospital setting. Suppliers and providers have been, and can continue to use the KX modifier to request an exception to the therapy caps on claims that are over these amounts. The use of the KX modifier indicates that the services are reasonable and necessary and there is documentation of medical necessity in the patient’s medical record.

Beginning on October 1, 2012, and continuing through December 31, 2012, there will be two new therapy services thresholds of $3700 per year: one annual threshold each for 1) Occupational Therapy (OT) services,  and 2) Physical Therapy (PT) services and Speech-Language Pathology (SLP) services combined. Per-beneficiary services above these thresholds will require mandatory medical review.

It is important to note that, although the therapy caps are only applicable to hospitals for services provided on or after October 1, 2012, claims paid for outpatient therapy services since January 1, 2012, will be included in the caps accrual totals in applying the caps after October 1, 2012.

Additionally, beginning October 1, 2012, the National Provider Identifier (NPI) of the physician (or Non-Physician Practitioner (NPP) where applicable) certifying the therapy plan of care must be reported.   NPPs who can certify the therapy plan of care include nurse practitioners, physician assistants and clinical nurse specialists.