Outpatient rehab therapy practices can have difficulty maintaining a profit due to the complexity of billing for Medicare Part B services. Due to strict rules, reimbursements can be easily delayed or denied if steps are missed. As of 2018, approximately 61% of Medicare claims for physical therapy alone contained regulatory errors, according to the Office of Inspector General of the Department of Health and Human Services.
Your practice or department can become more profitable if you understand the extensive regulations and requirements. To help you navigate when and how to document and submit claims under this rule, we explain the Medicare therapy threshold for speech-language pathologists, physical therapists, and occupational therapists.
A brief history of Medicare's therapy threshold
In the past, Medicare has capped the amount beneficiaries could receive for speech-language pathology, occupational therapy, or physical therapy. Despite Congress' original intention, the exceptions process allowed billing for medically necessary services beyond the established cap.
A new therapy threshold, or KX modifier threshold, was introduced with the Bipartisan Budget Act of 2018. Therapy thresholds are not intended as hard limits. For services exceeding the threshold amount, providers must use the KX modifier.
The Medicare therapy threshold limits for 2022 have been set. What are they?
Medicare's therapy threshold limits for 2022 are as follows:
The combined cost of physical therapy and speech-language pathology is $2,150.
The cost of occupational therapy services is $2,150.
For combined PT and SLP services in 2021, the threshold was $2,110, and for OT services, it was $2,110.
What is the process for determining medical necessity?
Medical necessity is defined by the Centers for Medicare and Medicaid Services (CMS) as: “health care services or supplies needed to prevent, diagnose, or treat an illness, injury, condition, disease, or its symptoms, and that meet accepted standards of medicine.” There are differing definitions of medical necessity between commercial and private payers, so make sure you check your payer's rules.
Physical therapy association American Physical Therapy Association (APTA) recommends medically necessary treatments when:
The assessment is conducted by a licensed physical therapist.
The therapy removes or improves restrictions, limitations, or impairments placed on the patient.
Throughout the treatment process, a PT supervises or directs the procedure.
In order to complete this task, you need skills, knowledge, or professional judgment.
Patient convenience is not its only purpose.
Evidence-based practice is used as part of its standards.
Injuries are reduced or function is improved.
Medicare's definition of medical necessity is used by the American Speech-Language-Hearing Association (ASHA) and the American Occupational Therapy Association (AOTA).
To ensure that your documentation supports and defends a patient's clinical need for the services in question, you should carefully review payer definitions. Medical necessity definitions may also be available in some states, which can help guide defensible claims.
Fitness, wellness, and preventive PT, OT, and SLP services are not covered by Medicare. Providing incomplete documentation may result in a denial of reimbursement for medically necessary services.
Using the KX modifier to bill above the therapy threshold
Your reimbursement claim must include certain modifiers if a Medicare patient's care exceeds the threshold. Your reimbursement will be delayed or denied if you fail to include the appropriate modifiers for claims above the therapy threshold. It is possible (in theory) to provide unlimited services under that code with the appropriate modifiers and approved documentation as long as they remain medically necessary.
KX modifier
When the KX modifier appears on a claim, it indicates the provider deems continued care medically necessary, even though the patient services have exceeded the capped amount allowed. The medical necessity of the continued services must be supported by medical record documentation.
Medical necessity must be indicated with the KX modifier on each claim line over the therapy threshold. To ensure that the patient can return to maximum expected function within a reasonable timeframe, the patient's record should include defensible documentation to support the clinical need for the services. In order to use this modifier, you do not need prior authorization.
Medicare beneficiaries' exemption eligibility is determined by CMS based on the following factors:
A patient's specific diagnosis and condition, as well as its severity and complexity.
Describes the type, duration, and frequency of patient services.
Treatment beyond the therapy threshold is necessary due to the patient's active health conditions and complications.
For example, someone who has had a stroke may require neuromuscular reeducation to regain their daily living skills. The KX modifier must be included when the services exceed $2,150 when billing for 97112 (neuromuscular re-education). Note the complexity of your patient's case, their recovery goals, and any other contributing factors you consider essential for demonstrating medical necessity in your documentation.
In Conclusion
There are many Medicare billing rules and regulations to understand, and the therapy threshold can be particularly difficult to understand. When maintaining your patient’s health and wellness is your top priority, it can become frustrating to deal with concepts like billing thresholds which may ultimately disrupt care.
At PatientStudio, our billing and documentation systems are fully compliant with all CMS regulations, and will notify you when a threshold is eminent for any and all patients. Take the time for a demo of the PatientStudio system today to see how we can help you maximize approved claims and increase your patient’s care.