Q&A

Medicare therapy cap and use of the ABN.

By Rick Gawenda*

Since passage of the Bipartisan Budget Act of 2018 (HR 1892) that repealed the therapy cap for outpatient therapy services, there have been many questions about the application of the KX modifier for services that exceed either $2,010 or $3,000 physical therapy and speech therapy combined in 2018 or a separate $2,010 or $3,000 for occupational therapy. Most of the questions center around: Should I provide the Medicare beneficiary with an advance beneficiary notice of noncoverage (ABN) when they exceed either $2,010 or $3,000 in calendar year 2018?

In this article, I will answer the following questions:

1. If the therapy cap has been repealed, why do we still have an annual therapy cap dollar threshold and have to use the KX modifier?
2. If a Medicare beneficiary has exceeded the therapy cap dollar threshold of $2,010 in 2018 and I believe therapy is still medically necessary, must I use the KX modifier and bill the Medicare program for those visits and services?
3. When a Medicare beneficiary reaches the therapy cap dollar threshold of $2,010 in calendar year 2018, is an advance beneficiary notice (ABN) required if I feel therapy is still medically necessary and requires the skills of a therapist?
4. If a Medicare beneficiary has exceeded the targeted medical review dollar threshold of $3,000 in 2018 and I believe therapy is still medically necessary, must I use the KX modifier and bill the Medicare program for those visits and services?
5. When a Medicare beneficiary reaches the targeted medical review dollar threshold of $3,000 in calendar year 2018, is an advance beneficiary notice (ABN) required if I feel therapy is still medically necessary and requires the skills of a therapist?
6. Can we have all Medicare patients sign a generic advance beneficiary notice (ABN) on their first visit for outpatient therapy services to protect ourselves from possible lack of payment from the Medicare program?

Let’s get to the answers!

1. Question: If the therapy cap has been repealed, why do we still have an annual therapy cap dollar threshold and have to use the KX modifier?

Answer: The KX modifier will attest that the therapist feels therapy is still medically necessary for the Medicare beneficiary and requires the unique skills of a therapist to provide.

2. Question: If a Medicare beneficiary has exceeded the therapy cap dollar threshold of $2,010 in 2018 and I believe therapy is still medically necessary, must I use the KX modifier and bill the Medicare program for those visits and services?

Answer: Due to the passage of HR 1892 by the United States Senate and House of Representatives on February 9, 2018, which was then signed into law by President Trump, the therapy cap was repealed effective with dates of services on and after January 1, 2018. This means there is no hard therapy cap for physical therapy and speech therapy services combined or occupational therapy for calendar year 2018 and subsequent years. However, the KX modifier must still be appended to services provided above $2,010 for physical therapy and speech therapy and a separate $2,010 for occupational therapy in 2018. The required use of the KX modifier is for attestation that services are medically necessary. This requirement does include outpatient hospitals and critical access hospitals. You would then be required to submit these claims to the Medicare program.

3. Question: When a Medicare beneficiary reaches the therapy cap dollar threshold of $2,010 in calendar year 2018, is an advance beneficiary notice (ABN) required if I feel therapy is still medically necessary and requires the skills of a therapist?

Answer: In this situation, an ABN would not be appropriate to issue to the Medicare beneficiary since the therapist feels therapy is still medically necessary and requires the skills of a therapist to provide. In this situation, you would append the KX modifier to those CPT (Current Procedural Terminology) codes on the claim form. The KX modifier attests therapy is still medically necessary. An ABN is provided to the Medicare beneficiary when normally the services are covered by the Medicare program, but in this situation you feel the services are either not medically necessary and/or would not be covered by the Medicare program.

4. Question: If a Medicare beneficiary has exceeded the targeted medical review dollar threshold of $3,000 in 2018 and I believe therapy is still medically necessary, must I use the KX modifier and bill the Medicare program for those visits and services?

Answer: Due to the passage of HR 1892 by the United States Senate and House of Representatives on February 9, 2018, which was then signed into law by President Trump, the therapy cap was repealed effective with dates of services on and after January 1, 2018. This means there is no hard therapy cap for physical therapy and speech therapy services combined or occupational therapy for calendar year 2018 and subsequent years. However, the KX modifier must still be appended to services provided above $3,000 for physical therapy and speech therapy and a separate $3,000 for occupational therapy in 2018. The required use of the KX modifier is for attestation that services are medically necessary. This requirement does include outpatient hospitals and critical access hospitals. You would then be required to submit these claims to the Medicare program.

5. Question: When a Medicare beneficiary reaches the targeted medical review dollar threshold of $3,000 in calendar year 2018, is an advance beneficiary notice (ABN) required if I feel therapy is still medically necessary and requires the skills of a therapist?

Answer: In the given situation, an ABN would not be appropriate to issue to the Medicare beneficiary since the therapist feels therapy is still medically necessary and requires the skills of a therapist to provide. In this situation, you would append the KX modifier to those CPT codes on the claim form. The KX modifier attests therapy is still medically necessary. An ABN is provided to the Medicare beneficiary when normally the services are covered by the Medicare program, but in this situation you feel the services are either not medically necessary and/or would not be covered by the Medicare program.

6. Question: Can we have all Medicare patients sign a generic advance beneficiary notice (ABN) on their first visit for outpatient therapy services to protect ourselves from possible lack of payment from the Medicare program?

Answer: No. Providers may not issue generic ABNs to all Medicare patients. The provider must have a valid reason as to why they feel the Medicare program will not pay the services they have listed on the ABN form. “Generic ABNs” are routine ABNs given to beneficiaries that do no more than state that Medicare denial of payment is possible, or that the notifier never knows whether Medicare will deny payment. Such “generic ABNs” are not considered to be acceptable evidence of advance beneficiary notice. The ABN must specify the service and a genuine reason that denial by Medicare is expected. “Generic ABNs” are defective notices and will not protect the notifier (provider) from liability.

Rick Gawenda is the president of Gawenda Seminars & Consulting and a member of the PPS Payment Policy Committee. He can be reached at info@gawendaseminars.com.

* The author has a vested interest in the subject of this article.