Harmony Healthcare Blog

Medicare Part B Caps

Posted by Joyce Sadewicz on Tue, Feb 06, 2018

Edited by Kris Mastrangelo


Compliance • Audits/Analysis • Reimbursement/Regulatory • Education/Efficiency

Young physiotherapist exercising with elder disabled person.jpeg

Click Here to See our Update to this Post.

Congress recessed for 2017 without enacting legislation to address the Medicare “Extender Payment Policies”, including the Medicare Part B Cap.  These policies expired on December 31, 2017 indicating that on January 1, 2018, SNFs are under the prior caps without any cap exceptions based on patient need.  

There is now a hard cap: 

  • $2,010 for Physical and Speech Therapy services and
  • $2,010 for Occupational Therapy services and the
  • Exception process that permitted medically necessary services over the cap through the use of the KX modifier no longer applies

The Medicare Part B Cap was initiated by the Balanced Budget Act of 1997 and applied consistently since 2006, yet, intermittently prior to that in 1999 and 2003. 

Recently, it was expected that Congress would address this issue by the time the current Continuing Resolution expired on January 19th, however, it appears that Congress may again defer action of the Medicare Extenders including the Therapy Cap until at least February 16th, 2018 with another Continuing Resolution.  

There is a bipartisan agreement from both the Senate and House of Representatives to permanently repeal the Medicare Outpatient Therapy Caps that is waiting for a legislative vehicle to become enacted.  This is widely supported by the therapy organizations including the APTA and the AOTA, their membership, as well as providers and consumers.  If Congress is unable to concur on a permanent repeal of the therapy cap, there is a possibility they will enact a one or more year extension of the current exception process.  In the past, Congress allowed CMS to pay retroactively for therapy provided over the cap when the exception process was extended. 

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What does this mean for SNFs and their patients? 

  • There is currently a hard cap of $2,010 for Physical and Speech Therapy and $2,010 for Occupational Therapy with no exception process.  
  • CMS will temporarily delay all Medicare Part B outpatient therapy claims beginning January 1, 2018 for up to 30 days after receipt.  CMS typically reimburses within 14 days after a clean claim is received.  However, this will be extended to 30 days after a clean claim is received.

    For example, a claim submitted on February 1st for a January claim would be paid by February 15th.  Currently, it will not be paid until March 3rd.  This allows time for either the cap to be repealed or for an exception process to be reinstated. 
  • It is extremely important to inform patients and families of the cap and issue an ABN (CMS-R-131) when the patient reaches the cap of $2,010 to alert them that there is a hard cap for Medicare Part B.  CMS or the Medicare Administrative Contractors (MAC) have not provided clear guidance on how to inform patients and their families when a patient has reaches a cap when there is no exception process in place.  If the ABN is not issued and Congress does not enact the exception process or repeal the cap, then the facility will be responsible for the cost of therapy after the cap is reached.  
  • 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. 
  • Estimate the approximate cost for the ABN by determining the CPT Codes to be used per treatment. Determine the cost from the physician’s fee screen of the Medicare Administrative Contractor. Apply the MPPR (Multiple Procedure Payment Reduction) or use the MPPR fee screen and then multiply by the number of treatments estimated for the patient.  It is better to overestimate than underestimate. Explain the overestimation to patients and families to prevent financial surprises.

Harmony Healthcare International (HHI) is available to assist with any questions or concerns that you may have. You can contact us by clicking here.  Looking to train your staff?  Join us in person at one of our our upcoming Competency/Certification Courses.  Click here to see the dates and locations. 

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Tags: Medicare Part B Program development

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