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Background on Therapy Caps

For 2017, the therapy cap is $1,980 for speech-language pathology and physical therapy services combined.

The Medicare cap on outpatient rehabilitation therapy services was originally instituted under the Balanced Budget Act of 1997 as a combined cap on speech-language pathology (SLP) and physical therapy (PT) services, as well as a separate cap on occupational therapy (OT) services to Medicare beneficiaries.

The original $1,500 cap on Part B Medicare therapy services was intended as a cost control mechanism, but has not proved effective in saving Medicare money. Instead, the sickest of Medicare patients were being denied needed care. Congress has recognized that a financial limitation on therapy is detrimental to Medicare patients and through the years placed numerous moratoriums on its implementation.

On April 16, 2015, the President signed the "Medicare Access and CHIP Reauthorization Act of 2015" into law. The law directs the Centers for Medicare and Medicaid Services (CMS) to continue to allow exceptions to therapy caps for medically necessary services provided through December 31, 2017. The therapy cap exceptions process requires reauthorization annually and historically been achieved within payment, tax, or fiscal related legislation. In recent years, Congress has added the following therapy provisions to the exceptions process that also require annual authorization:

  • the use of an NPI number for the physician reviewing the need for therapy;
  • the manual medical review process for expenditures that reach $3,700 for speech-language pathology and/or physical therapy services; and
  • the application of the therapy cap and exceptions process to hospital outpatient departments.

Updates to instructions and implementation from CMS will be shared via ASHA Headlines and posted on ASHA's Billing & Reimbursement website.


Here are some simple things you can do to help improve the therapy benefit:

Additional Resources

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