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 $2,110, 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.
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:
Once patients have exceeded the previous therapy cap amount ($2,080), speech-language pathologists are required to apply the KX modifier on the claim form to attest to ongoing medical necessity, and may continue to submit claims for coverage.
When the beneficiary exceeds the KX modifier threshold 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 $2,110 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 contractors.
By appending the KX modifier, the speech-language pathologist is attesting that the services billed:
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 the G-codes.
For speech-language pathology services, when the $2,110 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 pathology services.
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].
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 providers:
The contractor responsible for conducting targeted medical reviews will be the Supplemental Medical Review Contractor (SMRC), Strategic Health Solutions. 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.
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.
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.