March 13, 2012 News

Medicare Payments, Therapy Caps Set Through 2012

Legislation passed in late February averts a 27.4% reduction in Medicare fee schedule rates and extends the Medicare therapy cap exceptions process, both through 2012.

The provisions were included in the Middle Class Tax Relief and Job Creation Act of 2012. The legislation extends the fee schedule that had been in place for the first two months of 2012.

The extension of the therapy cap exceptions process—which allows Medicare beneficiaries to receive speech-language and physical therapy services beyond an $1,880 limit—includes additional safeguards to ensure that only medically necessary services above the cap are permitted:

  • The use of the National Provider Identification number (NPI) of the physician reviewing the need for treatment.
  • The continued use of the "KX" modifier on claims above the cap.
  • A required manual medical review when expenditures reach $3,700 (combined physical therapy and speech-language treatment) for services furnished on or after Oct. 1, 2012.
  • Temporary application of the therapy caps to hospital outpatient departments for services provided from Oct. 1 through Dec. 31, 2012.

The legislation will require two reports:

  • By June 15, 2013, MedPAC (the Medicare Payment Advisory Commission, an independent agency that advises Congress on Medicare issues) must report on how to improve the therapy benefit. MedPAC must include recommendations for a payment system that better reflects individual acuity, condition, and therapy needs and must examine private sector initiatives.
  • The Government Accountability Office must report to Congress by May 1, 2013, on the manual medical review process.

The legislation also requires the Centers for Medicare and Medicaid Services (CMS) to implement by Jan. 1, 2013, a claims-based data collection strategy for reforming the Medicare outpatient therapy payment system. Data collection shall include "patient function during the course of better understand patient condition and outcomes." CMS must consult with relevant stakeholders in developing the strategy.

In using the "KX" modifier and requesting an exception from the therapy cap, speech-language pathologists should ensure that documentation supports services above the cap and demonstrates that the patient continues to improve. ASHA's National Outcomes Measurement System (NOMS) may be used to report functional progress.

Visit ASHA's website for more information on NOMS or on the exceptions process, or e-mail

Ingrida Lusis, director of federal and political advocacy, can be reached at

cite as: Lusis, I. (2012, March 13). Medicare Payments, Therapy Caps Set Through 2012. The ASHA Leader.


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