Medicare Part B Review Process for Therapy Claims
On February 8, 2018, Congress passed legislation to permanently
repeal the therapy caps and replaced them with a targeted medical review
threshold of $3,000 for therapy services billed under Part B. There is one targeted review threshold of $3,000 for occupational therapy and a second threshold of $3,000 for speech-language pathology and physical therapy combined. There is also a trigger of $2,040, at which point the KX modifier must be included on the claim to demonstrate continued medical need for services. The following
provides speech-language pathologists with relevant information on the targeted
medical review threshold, use of the KX modifier, and documentation requirements.
Targeted Medical Review Threshold
Speech-language pathologists may exceed the threshold
and continue to provide services to Medicare beneficiaries if they have
documented justification on why the services for the particular patient exceed
the threshold. The threshold is $3,000 for speech-language pathology and
physical therapy services combined from 2018-2028. Beginning in 2028, the
threshold amount will be updated annually by the Medicare Economic Index (MEI).
Full details regarding the settings to which the
threshold will apply will be provided by the Centers for Medicare and Medicaid
Services (CMS) and these updates will be reflected on this webpage as they
become available. Historically, targeted medical review applied to all services
billed under Medicare Part B, including all the following settings:
- Offices of
physicians and certain non-physician practitioners
- Part B
skilled nursing facilities
- Home health
agencies (visits provided on an outpatient basis)
agencies (also known as outpatient rehabilitation facilities)
outpatient rehabilitation facilities
Once patients have exceeded the previous therapy cap amount ($2,040), speech-language pathologists are required to apply the KX modifier on the claim form to attest to ongoing medical necessity, and may thus continue to submit claims for coverage.
Use of the KX
When the beneficiary exceeds the previous therapy cap amount ($2,040) and continues
to demonstrate a medical need for therapy services, the KX modifier is required
with the CPT/HCPCS code on the claim form. The KX modifier can be included with
claims prior to reaching the $2,040 trigger because the patient’s current accrued
claims amount cannot be known for certain due to claims submitted by other
providers. However, it should not routinely be used with claims significantly
before reaching the trigger. Overuse may result in additional reviews by
By appending the KX modifier, the speech-language pathologist is attesting
that the services billed:
- are reasonable and necessary services
that require the skills of the speech-language pathologist;
- are justified by appropriate
The use of the GN modifier to identify
speech-language pathology services is still required, in addition to the KX
modifier. Providers may report the modifiers on claims in any order (for example: 92507, GN, KX)
Note: The KX
modifier is not related to the functional
reporting requirements (G-codes) and should not be appended to
For speech-language pathology services, when the $2,040 trigger is exceeded by at least one line on the claim, use the KX modifier on all of
the lines on that claim that refers to physical therapy and speech-language
Documentation is key to ensuring compliance with the
exceptions process. The speech-language pathologist's use of the KX modifier is
an attestation to CMS that services are medically necessary and justification
of the need for services above the threshold is documented in the medical
record. If CMS finds that documentation does not support the provision of
services above the cap, the speech-language pathologist may be subject to sanctions under the False
Claims Act. CMS has stated that the Medicare contractor has the authority to
make the final determination on whether or not to pay the claims.
Due to the increased reliance on the clinician's
professional judgment, the need to appropriately document services is
imperative. Documentation must show that skilled therapy services are
medically necessary and that there is an expectation that the patient's
condition will improve significantly in a reasonable and generally predictable
period of time or that skilled interventions are necessary for the patient to
maintain a level of function (e.g. a patient with a degenerative neurological
condition). Additional information on CMS documentation requirements can be found at ASHA's website or
in Chapter 15, Section 220.2 of the Medicare Benefit Policy Manual [PDF].
Targeted Medical Review Process
Under the targeted medical review threshold, claims
will not be reviewed unless the provider meets the criteria for review. These
criteria are the same criteria applied to therapy services since 2015 and
established by the Medicare Access and CHIP Reauthorization Act (MACRA).
Previously, CMS targeted the following categories of
- Services provided in skilled nursing
facilities (SNFs), private/group practices, and outpatient facilities;
- Services billed by providers who provide
a high number of minutes or hours of therapy per day at the patient level;
- Services billed by providers who have a
high percentage of patients that exceed the $3,700 threshold.
ASHA anticipates that the contractor responsible for
conducting targeted medical reviews will be the Supplemental Medical Review
Contractor (SMRC), Strategic
Health Solutions. Previously, CMS
instructed the SMRC to conduct reviews in the following manner.
- The SMRC will send one Additional
Document Request (ADR) for 40 claims per provider. At this time, providers
should expect only one request, with the possibility of additional
requests if it appears there are significant compliance issues.
- The SMR has 45 days to review the claims
and associated medical records and to issue a determination to the
provider that addresses all 40 claims under review.
- Once a determination has been issued, the
provider may engage the SMRC in a discussion period to provide additional
details that may help overturn the initial determination in the provider’s
- Any unresolved denials will then be
turned over to the local Medicare Administrative Contractor (MAC) for
recoupment, at which time the provider will be given the options of
- The SMRC will also educate providers
regarding Medicare regulations where compliance issues have been
CMS has instructed the SMRC to compare like
providers (e.g., SNF to SNF, private practice to private practice).
ASHA will continue to update this webpage as more
details about potential targets and the medial review process become available.
What To Do if You are Targeted for Review
These reviews are targeting claims for outpatient speech-language pathology services billed under Part B only. If you receive an ADR letter from Strategic Health Solutions, please follow the instructions in the letter, including pulling all medical records
for the claims requested and submitting the information in a timely fashion in the manner requested by the SMRC (e.g., mail, fax, CD). If you do not submit the documentation requested by the SMRC, these claims will be denied. Once a determination is made, you will need to decide if you want to use the
discussion period to address any negative determinations and engage the SMRC as soon as possible to avoid the appeals process.