Spotlight Archive

The Therapy Services webpage is being updated to:

• Reflect the KX modifier threshold amounts for CY 2023 in the “Implementation of the Bipartisan Budget Act of 2018” section on the landing page.
• Update the CY 2023 list of codes that sometimes or always describe therapy services.  While there are no new CPT/HCPCS codes to add or delete, we are updating Disposition 10 to clarify that, for RTM services, physical and occupational therapists in private practice must continue to provide direct supervision of their therapy assistants for CY 2023 in keeping with the regulatory provisions that require direct supervision for all services they don’t personally furnish.  Otherwise, the CY 2023 Therapy Code List is identical to that of CY 2022.  See the Annual Therapy Update link for the 2023 Therapy Code List and Dispositions.
• Removing the statement on and the link to the Beneficiary Fact Sheet on Medicare Limits on Therapy Services as this information is obsolete and no longer needed due to the BBA of 2018 that repealed the application of the financial limitations, otherwise known as the “therapy caps.”

• As indicated in the CY 2022 Physician Fee Schedule (PFS) final rule, we are adding billing examples and the general rules for applying the therapy assistant modifiers, CQ and CO, to claims for services furnished in whole or in part by physical therapist assistants (PTAs) and occupational therapy assistants (OTAs), respectively.  The CQ/CO modifiers are added to claims when the PTA’s/OTA’s time exceeds the de minimis standard – 10 percent of a service or unit of a service ─ when that standard is applicable.  See the new link titled Billing Examples Using CQ/CO Modifiers for Services Furnished in Whole or in Part by PTAs and OTAs;
• To update the landing page to reflect the CY 2022 KX modifier threshold amounts and to add information from the CY 2022 PFS final rule on section 53107 of the Bipartisan Budget Act of 2018; and 
• To update the CY 2022 list of codes that sometimes or always describe therapy services.  Disposition 10 has been revised to include codes for services that are (a) furnished virtually that represent a type of sometimes therapy services that we’ve collectively termed “communication technology-based services” (CTBS); and (b) services furnished remotely that are termed “remote therapeutic monitoring (RTM) services.  See the Annual Update link for the 2022 Therapy Code List and Dispositions. (added November 10, 2021)

The Therapy Services webpage is being updated, in a new section on the landing page called “Implementation of the Bipartisan Budget Act of 2018”, to: (a) Reflect the KX modifier threshold amounts for CY 2021, (b) Add more information about implementing Section 53107 of the BBA of 2018, and (c) Note that the Beneficiary Fact Sheet has been updated.  

On June 19, CMS released a new Frequently Asked Questions (FAQ) document on Functional Reporting for PT, OT, and SLP Services. Please view the new FAQ document here (PDF).

This Therapy Services landing page is being updated to reflect the therapy provisions of the Bipartisan Budget Act of 2018 (BBA of 2018). It adds a new section titled “Latest Applicable Law” to replace the “Therapy Caps” section; and it also adds an Advance Beneficiary Notice of Noncoverage (ABN) Frequently Asked Questions (FAQ) document to the Downloads section – See “August 2018 ABN FAQs”. This spotlight was added August 2018.

This section was last revised in March 2021 to reflect the CY 2021 KX modifier thresholds. On February 9, 2018, the Bipartisan Budget Act of 2018 (BBA of 2018) (Public Law 115-123) was signed into law. This law included two provisions related to Medicare payment for outpatient therapy services including physical therapy (PT), speech-language pathology (SLP), and occupational therapy (OT) services:

• Section 50202 of the BBA of 2018 repeals application of the Medicare outpatient therapy caps and its exceptions process while adding limitations to ensure payment for appropriate therapy services. For related information see the CMS link to “Medicare Expired Legislative Provisions Extended and Other Bipartisan Budget Act of 2018 Provisions (PDF)." 
• Section 53107 of the BBA of 2018 relates to the payment of OT and PT services furnished by therapy assistants.

Through section 50202 of the BBA of 2018, the law preserves the former therapy cap amounts as thresholds above which claims must include the KX modifier as a confirmation that services are medically necessary as justified by appropriate documentation in the medical record. Just as with the incurred expenses for the therapy cap amounts, there is one amount for PT and SLP services combined and a separate amount for OT services. This amount is indexed annually by the Medicare Economic Index (MEI).  Claims for services over the KX modifier threshold amounts without the KX modifier are denied.  For CY 2021 this KX modifier threshold amount is:

• $2,110 for PT and SLP services combined, and
• $2,110 for OT services.

Along with this KX modifier threshold, the BBA of 2018 retains the targeted medical review (MR) process (first established through Section 202 of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA)), but at a lower threshold amount of $3,000. For CY 2021 (and each calendar year until 2028 at which time it is indexed annually by the MEI), the MR threshold is $3,000 for PT and SLP services and $3,000 for OT services. The targeted MR process means that not all claims exceeding the MR threshold amount are subject to review as they once were. For a general overview of the MR process, go to the Medical Review and Education website.  Lastly, Section 50202 of the BBA of 2018 did not change the provider liability procedures which first became effective January 1, 2013 (with passage of The American Taxpayer Relief Act of 2012 (ATRA)) and continues to provide limitation of liability protections to beneficiaries receiving outpatient therapy services when services are denied for certain reasons, including failure to include a necessary KX modifier. Please refer to the document titled  “August 2018 ABN FAQs (PDF)” posted in the Downloads section below. 

Section 53107 of the BBA of 2018 additionally requires CMS, using a new modifier, to make payment at a reduced rate for PT and OT services that are furnished in whole or in part by physical therapist assistants (PTAs) and occupational therapy assistants (OTAs).  Payment for these services is at 85 percent of the otherwise applicable Physician Fee Schedule payment amount/rate for the service, effective January 1, 2022. The BBA of 2018 established interim dates to implement the payment reduction via notice and comment rulemaking: (a) establish a new modifier to identify services furnished in whole or in part by a PTA or OTA by January 1, 2019 and (b) require the modifier on claims beginning January 1, 2020.  For CY 2019, CMS created two payment modifiers as follows:

• CQ modifier:  PT services furnished in whole or in part by PTAs and
• CO modifier: OT services furnished in whole or in part by OTAs. 

For CY 2020, CMS established a de minimis standard for such services – meaning that portions of a service furnished by the PTA/OTA independent of the physical therapist/ occupational therapist, as applicable, that do not exceed 10 percent of the total service are not subject to the payment reduction; while portions of a service furnished by the PTA/OTA independent of the therapist that exceed 10 percent of the total service must be reported with the CQ/CO modifier, alongside of the corresponding GP/GO therapy modifier.  Portions of services provided by the PTA/OTA together with the physical therapist/occupational therapist are counted as services provided by physical and occupational therapist. 

For more information for beneficiaries about Outpatient Therapy Services, including the repeal of the therapy caps under the BBA of 2018, please view the Beneficiary Fact Sheet on Medicare Limits on Therapy Services.

If you have questions about the Medicare Program, you should first get in touch with your Medicare Contractor. To find contact information, please use the Provider Compliance Interactive Map.

For more information about other outpatient therapy payment policies, please see:

• The Medicare Claims Processing Manual, Chapter 5 (PDF)

For applicable coverage policies for therapy services, please refer to the Medicare Benefit Policy Manual:

• Sections 220 and 230 of Chapter 15 (PDF) and Chapter 12 (PDF) for PT, OT, and SLP services in Comprehensive Outpatient Rehabilitation Facilities

Medicare applies a multiple procedure payment reduction (MPPR) to the practice expense component of certain “always therapy” services. Since April 1, 2013, this MPPR rate is 50 percent for both practitioner/office and institutional settings. The “MPPR Rate File” was recently updated for CY 2018 and can be found in the Downloads section of this webpage. This spotlight was added December 2017.

Medicare applies a multiple procedure payment reduction (MPPR) to the practice expense component of certain therapy services. Since April 1, 2013, this MPPR rate is 50 percent for both office and institutional settings. The “MPPR Rate File” was recently updated for CY 2017 and can be found in the Downloads section of this webpage. This spotlight was added December 2016.

Beginning January 1, 2017, physical and occupational therapists will use eight new CPT codes to bill Medicare for the evaluations and re-evaluations they furnish (97161 – 97168). Each of the existing PT and OT evaluation codes (97001 & 97003) was replaced with three new codes – representing low, moderate or high complexity: (a) codes 97161, 97162, and 97163 for PT; and (b) codes 97165, 97166, and 97167 for OT. The new PT and OT re-evaluation codes, 97164 & 97168, replaced the existing codes (97002 & 97004). 

The new CPT code descriptors for PT and OT evaluative procedures include specific components that are required for reporting as well as the corresponding typical face-to-face times for each service. These new codes represent “always therapy” services and always require the corresponding discipline-specific therapy modifier: (a) the new PT codes (97161 – 97164) require the “GP” modifier, and (b) the new OT codes (97165

The therapy caps exceptions process for PT, OT, and SLP services was extended through the remainder of CY 2015, and for all of CY 2016 and CY 2017, when the Medicare Access and CHIP Reauthorization Act was signed into law on April 16, 2015.

As explained in the previously-issued Jimmo v. Sebelius Settlement Agreement Fact Sheet (see Downloads section on the SNF PPS web page), the Centers for Medicare & Medicaid Services (CMS) is issuing revised portions of the relevant program manuals used by Medicare contractors.  For additional information, please see the  Jimmo v. Sebelius Settlement Agreement – Program Manual Clarifications (Fact Sheet) - Updated 2/3/2014 (PDF)