Therapy Cap repeal is here but brings surprising changes to PTA reimbursement

On Friday morning, we all awoke to a government that experienced a hiccup of a shutdown, a ton of snow (if you’re in the Midwest like myself), and a major victory for the profession of physical therapy – a permanent repeal of the therapy cap. An APTA legislative goal for over two decades, the cap repeal ensures that patients who need therapy services can receive it without fear of being denied. Buried in this spending bill, however, was something no one expected – a 15% reduction in reimbursement for outpatient services provided by a PTA covered under Medicare part B. This took many by surprise, and is understandably causing concern within the profession. Let’s review the facts on cap repeal as well as the potential PTA changes.

The Qualifiers for Therapy Cap Repeal
The KX modifier, the modifier which has been in place for years to designate “medically necessary” therapy to avoid therapy cap restrictions remains in place. Therapy claims above $2,010 in a year (increasing annually) will require the KX modifier. The law states that above $3,000 there will be a “manual medical review” but the APTA has explained that not all claims above 3,000 will in actuality be reviewed. They state that only those providers with abnormalities such as high rates of claims denial or abnormal billing patterns would likely face review. For the purpose of the KX modifier and medical review threshold, PT and SLP remain bundled.

While, this arrangement may feel familiar to the days where the exceptions process was in place, politically it takes huge pressure off the profession to longer have the Therapy Cap on the political bargaining table year in and year out.

What are the facts regarding PTA reimbursement?

Let’s start with what we know. The reduction isn’t slated to take effect until 2022, with a “modifier” that will tag services provided by a PTA required by 2020. We have plenty of time to fight this change by assembling the voices of patients and providers alike. The law must undergo a rules making process by CMS in order to be implemented, and the APTA hopes to influence this process in order to achieve the most favorable outcome possible. Justin Moore, APTA CEO, addressed concerns about the PTA reimbursement changes in a tweet Friday afternoon.

Does this single out physical therapy?

The bill signed into law by the President this morning also affects Occupational Therapy Assistants, joining several other healthcare professions that deal with varying rates of reimbursement. Physician’s assistants and nurse practitioners also operate under this 85% fee schedule when providing services. There are rules, however, that provide options to bump this back up to 100%. When services are provided as “Incident To” an established plan of care, they can be billed at the normal fee schedule. Note: It remains to be seen if PTAs and COTAs will be provided the same opportunity as these other healthcare providers.

The Bottom Line

  • There is no longer a hard cap, but you will still need to submit the KX modifier with therapy that exceeds $2,010 a year.
  • Claims that exceed $3,000 will be subject to a potential manual medical review.
  • After 2022 therapy provided by a PTA will still be reimbursed by Medicare.
  • This legislative change affects PTA reimbursement under the Medicare Part B (Physician Fee Schedule).
  • Reimbursement in inpatient settings or under alternative payment models is not affected.
  • Commercial insurance reimbursement is not directly affected, but Medicare tends to set the trend.

Remember, there is a lot of time for therapists and patients to advocate for equitable reimbursement. Physical therapy, provided by both PTs and PTAs, provides an incredible value to our healthcare system, one that gains recognition by our policymakers every day. While a legislative victory for our patients was secured with therapy cap repeal, we must remain active advocates for the profession in order to best serve the public.

Are you an APTA member? Check your email for the official update from APTA.

Written by: 

Ian MacMuride, SPTA, CSCS, voted most likely to be watching CSPAN on a Friday night, loves policy, and a stout ginger beer. Follow him on Twitter here.

Ryan Pawloski, SPT, 2nd year student at UIC, passionate about athlete rehabilitation, legislative policy, and improving patient access to physical therapy. Follow him on Twitter here.