Medicare therapy caps have had annual thresholds since 2018, due to Bipartisan Budget Act. They provide payment for Medicare outpatient (Part B) services, which include physical therapy, speech-language pathology, and occupational therapy. This means that before this law came in, Medicare had a cap for the number of therapy services you can receive annually. Since that law has been in force, Medicare beneficiaries can have as many therapy services as long as these services are considered medically necessary. This is because therapists can surpass the threshold if they append claims with the KX modifier.
Medicare And Therapy Services
Medicare covers outpatient services which include physical therapy, speech-language pathology, and occupational therapy as long as the physician thinks that this service is medically necessary for the beneficiaries’ health. There is no limit on the number of times beneficiaries can receive these services, but doctors can authorize up to 30 days of treatment for physical therapy. If you need treatment that lasts more than 30 days, your doctor will need to authorize the request again.
If a doctor prescribed therapy for you and there was no need for hospitalization (which is covered under Part A), Part B covers for these services. However, you are still responsible to meet the deductible (226$ in 2023) and pay 20% of the coinsurance for provided service.
What Is A Therapy Cap In 2023?
As already established, there is a therapy cap that Medicare will cover for therapy services. In 2023, the threshold amount that Medicare pays for physical, speech-language, and occupational services is 2230$ which is more in comparison to 2022, when the threshold amount was 2150$. If beneficiaries meet this threshold, these services will still be covered under Medicare Part B, and their medical necessity must be proved by using KX modifier.
If providers exceed the threshold of 2230$ they can continue to receive services for Medicare beneficiaries as long as they have proper documentation that explains why these services surpass the threshold. From 2018 to 2028, the threshold is 3000$ for physical and speech-language pathology services combined. After 2028, this threshold will be updated by Medicare Economic Index (MEI).
Medical Necessity For Therapy Services
In general, Medicare considers therapy services medically necessary if:
- they are certified by an approved doctor or physical therapist
- severe or complex condition that requires treatment
- this condition can be improved after applying this type of therapy (physical, speech-language, and occupational)
- requires skills and knowledge of a certified therapist
To fulfill medical necessity standards, therapists must lead certain documentation which legally approves that treatment is indeed medically necessary in case of Medicare audit. This documentation typically includes beneficiaries’ diagnoses, and conditions, and explains how this treatment helps patients’ conditions.
To conclude, you get physical therapy coverage under your Part B insurance for outpatient services, and under Part A if hospitalization is needed. However, those coverage is only provided if considered reasonable or necessary. If you have Part C (Medicare Advantage) you will also be covered for 80% of the services, because this covers replaces your Original Medicare (Parts A and B coverage).
If you have Medicare Supplement plans, also known as Medigap plans, alongside to your Original Medicare it may help cover the remaining 20% of the cost.
Craig W. Hansen is an insurance professional and co-founder of William & Michael Advisor Group LLC and Jersey Insurance Solutions. Craig has served his clients in many facets of the insurance industry, always with the same goal: excellence in service while building solid, long-term, lasting relationships. With over a decade of experience in the insurance benefits industry, Craig’s clients know they can call on him anytime and receive platinum service with a smile.
