Medicare Outpatient Therapy Cap: Implementation Factsheet

AOTA, Regulatory Affairs




Therapy Cap

for OT


The amount will be adjusted incrementally based on the Medicare Economic Index (MEI), or Congressional action could repeal it entirely.

Exceptions Process

KX modifier

Use of this modifier could be extended further or repealed entirely along with the cap.

Manual Medical Review (MMR)

The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) extended the therapy caps exceptions process through December 31, 2017 and modified the requirements for manual medical review for services over the $3,700 therapy thresholds.

Medicare Administrative Contractors (MACs) now conduct medical reviews of targeted claims over the $3,700 thresholds through MACRA, rather than reviewing all claims exceeding the threshold.

Congressional action to repeal and replace the therapy cap could make changes to the threshold dollar amount and/or the criteria used to target therapy claims for MAC review.

Multiple Procedure Payment Reduction (MPPR)

50% of the practice expense (PE) component of the fee schedule formula for all second and subsequent codes billed on the same day, for the same patient, by the same NPI

The MPPR Rate File was recently updated for CY 2017.

No changes expected

Functional Reporting

G-codes and modifiers are required on the claim form to receive payment (began in 2013).

Every year since implementation, AOTA has consistently advocated with CMS for practical changes to Functional Reporting categories and requirements. AOTA advocacy efforts will continue.