Medicare Outpatient Therapy Cap: Implementation Factsheet


Source: 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

KX modifier

(currently in place through March 31, 2015)

Could be extended further or repealed entirely along with the cap

Manual Medical Review (MMR)

Jan-March 2013:

MACs conduct medical reviews of all claims over $3,700 on a prepay basis; pre-authorization granted in 20-visit increments

April-December 2013:

RACs take over the reviews and states divided into prepay and post-pay

  • Prepay: FL, CA, MI, TX, NY, LA, IL, PA, OH, NC, MO
  • Post-pay: All other states

First quarter of 2014:

No change from 2013 - RACs review claims over $3,700 and states divided into prepay and post-pay

March 2014-on:

RAC reviews paused during procurement; when contracts are final reviews will begin on a post-pay basis for all states. All claims will be reviewed retrospectively – this is just temporary provider relief

  • Procurement: Unknown how long this period will last b/c losing RACs sometimes protest, prolonging the process

No changes expected

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

No change

No changes expected

Note: If the CPT codes used by OT are reformed and revalued in the coming years, the MPPR would no longer be applicable

Functional Reporting

G-codes and modifiers required on the claim form to receive payment beg. July 1, 2013 (first half of 2013 was a testing period)

No change

Congressionally-mandated use of the CARE Tool to replace G-codes is a possibility

Physician Quality Reporting System (PQRS)

OTs in private practice eligible to report; failure to report in 2013 means  a        -1.5% penalty in 2015

OTs in private practice eligible to report; failure to report in 2014 means a -2% penalty in 2016

Measures revised by CMS each year in the MPFS final rule; a continued shift toward registries and other refinements is expected

Updated: April 2014