The Medicare Therapy Cap is Gone – What You Need to Know

After 20 long years, the Medicare part B Therapy Cap has finally been lifted. Excellent news to be sure, however, there is bad news too, starting in 2022 assistant staff (PTAs & OTAs) will receive a 15% reimbursement reduction for any services provided under Medicare part B.

Clearly, the deal is not optimal, but at least we can move on from the cycle of short term legislative fixes and the annual threat of billing uncertainty. It’s a huge win for therapy and all of the advocates that have fought so long to get the cap lifted. Let’s take a quick look at some of the changes as they currently stand.

Fixing the Therapy Cap

There are some holdovers here from the former exceptions process, including the requirement of the KX modifier for claims above $2,010. The medical review that had previously been in place at $3,700 has been lowered to $3,000. Hospital outpatient facilities should also be aware they are subject to the same KX modifier and medical review thresholds.

The therapy cap fix is retroactive to January 1, 2018 and providers should re-submit any claims that have been denied due to the cap limit. As was the case in the past, therapy services (physical therapy, occupational therapy and speech-language pathology) are again lumped together for the purposes of these thresholds.

SNFs Hit Hard

Unfortunately, the budget squeezes skilled nursing facilities even further by removing nearly $2 billion from their medicare payments over the next 10 years, by freezing the market basket rate at 2.4%. Though there is beneficial news for seniors, in that the coverage gap in Medicare Part D plans (“the donut hole”) is partially closed by the budget deal. Beneficiaries will only be responsible for contributing 25% of prescription costs.

Major Changes to Home Health & More on the Horizon

Home health may also be hurt by the 15% cut in reimbursement of therapy assistants, however, the cut can be avoided if a home health care plan is in place. Starting in 2020, the unit of payment will change 60 days to 30-day units and the market basket rate will be set at 1.5%. The budget directs HHS to develop a new case-mix system, also to be implemented by 2020. Finally, the rural Home Health add-on has been maintained – an add on of between .5% and 4% for rural home health services.

That’s a lot of changes, some good, many bad. But, as we enter this new “cap-less” world let’s all just take a moment to appreciate the tireless work of all the advocates that fought for repeal and consider the tremendous benefit to the fields of physical therapy, occupational therapy and speech-language pathology.