What is the Medicare therapy threshold (formerly the therapy cap) for physical therapy in 2022?

The 2022 Medicare therapy financial threshold for physical therapy is $2,150. Keep in mind that services delivered for speech-language pathology in the same calendar year count toward this therapy threshold while occupational therapy has a separate and distinct financial threshold of $2,150.

Does the Medicare therapy financial threshold only apply to outpatient physical therapy?

Yes, the Medicare therapy financial threshold only applies to Medicare Part B outpatient physical therapy services. This includes outpatient physical therapy services delivered in the home or in a clinic.

Is the Medicare therapy financial threshold calculated based on bill rate or Medicare allowed amount?

The financial threshold is calculated based on Medicare allowed amount. It does include the 20% coinsurance amount. It also includes the Medicare Part B deductible.

How does a therapy check utilization of the Medicare therapy financial threshold?

There are two ways to determine a patient’s utilization of the financial threshold:

1. Medicare MAC Portal Login – If you have a Medicare MAC portal login you can enter your patient’s first and last name, date of birth, and Medicare subscriber ID to access information and utilization on the financial threshold.
2. You can also access this information by calling the MAC IVR. I have recorded a video on these two options you may watch below.

What is the KX Modifier?

Medicare has stated that the KX modifier should be used to indicate that therapy services continue to be reasonable and medically necessary beyond the financial threshold for the calendar year.

When to add the KX Modifier

The KX Modifier should be added to your physical therapy claim on the visit you expect will exceed the Medicare therapy financial threshold. Since this isn’t always possible it may be advised to add the KX modifier one visit prior to reaching the threshold.

What if a therapist exceeds the threshold without adding the KX Modifier?

If you exceed the KX Modifier or a claim processes earlier than expected and you receive reason code 119  “Benefit maximum for this time period or occurrence has been reached” then you may reopen the claim using the Medicare MAC portal and add the appropriate KX Modifier for reprocessing.

Targeted Medical Review Process

If total therapy financial utilization exceeds $3,000 in the calendar year for combined PT and SLP services the targeted medical review process kicks in.

These reviews may focus on issues identified by:

• CMS internal data analysis
• CERT program
• Professional Organizations
• Federal Agencies
• and Comparative Billing Reports

APTA’s article Medicare’s Payment Threshold for Outpatient Therapy Services identified the following factors used to identify claims chosen for the targeted medical review process.

• The provider has had a high claims denial percentage for therapy services or is less compliant with applicable requirements.

• The provider has a pattern of billing for therapy services that is aberrant compared with peers, or otherwise has questionable billing practices for services, such as billing medically unlikely units of services within a single day.

• The provider is newly enrolled or has not previously furnished therapy services.

• The services are furnished to treat targeted types of medical conditions.

• The provider is part of group that includes another provider identified by the above factors.

Summary and Key Takeaways

1. The 2022 Medicare therapy financial threshold is $2,150 for combined PT and SLP services.
2. The KX Modifier should be used to indicate therapy services are reasonable and medically necessary beyond the therapy financial threshold.
3. Once a patient’s utilization exceeds $3,000 in combined PT and SLP services within a calendar year that patient’s account may be selected for the targeted medical review process.