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Therapy Services

Guidance for CY 2019 Therapy Services Updates.

Issued by: Centers for Medicare & Medicaid Services (CMS)

Issue Date: December 21, 2018

CY 2025 Therapy Services Updates

The Therapy Services webpage is being updated as follows:

  • The file containing the multiple procedure payment reduction (MPPR) rates for CY 2025 has been revised.  Medicare applies a MPPR to the practice expense (PE) component of certain “always therapy” services.  Since April 1, 2013, this MPPR rate is applied at 50 percent for all therapy services that are paid under the PFS.  It applies to the second and subsequent therapy services provided to a patient on the same day.  The service with the highest PE relative value unit (RVU) is paid at 100% and the remaining services are paid at 50%. The MPPR file that was posted on January 8th has been revised to reflect the extension of the work geographic index floor of 1.0 (American Relief Act) and is posted in the below Downloads section dated February 14, 2025.
  • Disposition #10 in the CY 2025 Annual Therapy Update was revised to reflect the American Relief Act that extended the ability of PTs, OTs, and SLPs to furnish Telehealth Services through March 31, 2025.  Disposition #10 informs therapists about services that are provided remotely or virtually, including the telephone assessment and management services (codes 98966-98968) that were initially added in 2020 during the COVID-19 public health emergency (PHE) and, before being revised, permitted the use of the codes through the end of CY 2024.  Since these telephone codes (98966-98968) were added to the list of Telehealth Services, we are clarifying that PTs, OTs, and SLPs may continue to furnish these telephone services, but only through March 31, 2025 (absent additional legislation). See Disposition #10 in the Annual Therapy Update link for the 2025 Therapy Code List and Dispositions.
     

Implementation of the Bipartisan Budget Act of 2018

This section was last revised in January 2025 to reflect the CY 2025 KX modifier thresholds. On February 9, 2018, the Bipartisan Budget Act of 2018 (BBA of 2018) (Public Law 115-123) was signed into law. This law included two provisions related to Medicare payment for outpatient therapy services including physical therapy (PT), speech-language pathology (SLP), and occupational therapy (OT) services:

Through section 50202 of the BBA of 2018, the law preserves the former therapy cap amounts as thresholds above which claims must include the KX modifier as a confirmation that services are medically necessary as justified by appropriate documentation in the medical record. Just as with the incurred expenses for the therapy cap amounts, there is one amount for PT and SLP services combined and a separate amount for OT services. This amount is indexed annually by the Medicare Economic Index (MEI).  Claims for services over the KX modifier threshold amounts without the KX modifier are denied.  For CY 2025 this KX modifier threshold amount is:

  • $2,410 for PT and SLP services combined, and
  • $2,410 for OT services.

Along with this KX modifier threshold, the BBA of 2018 retains the targeted medical review (MR) process (first established through Section 202 of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA)), but at a lower threshold amount of $3,000. For CY 2021 (and each calendar year until 2028 at which time it is indexed annually by the MEI), the MR threshold is $3,000 for PT and SLP services and $3,000 for OT services. The targeted MR process means that not all claims exceeding the MR threshold amount are subject to review as they once were. For a general overview of the MR process, go to the Medical Review and Education website.  Lastly, Section 50202 of the BBA of 2018 did not change the provider liability procedures which first became effective January 1, 2013 (with passage of The American Taxpayer Relief Act of 2012 (ATRA)) and continues to provide limitation of liability protections to beneficiaries receiving outpatient therapy services when services are denied for certain reasons, including failure to include a necessary KX modifier. Please refer to the document titled  “August 2018 ABN FAQs (PDF)” posted in the Downloads section below. 

Section 53107 of the BBA of 2018 additionally requires CMS, using a new modifier, to make payment at a reduced rate for physical therapy and occupational therapy services that are furnished in whole or in part by physical therapist assistants (PTAs) and occupational therapy assistants (OTAs).  Payment for these services is at 85 percent of the otherwise applicable PFS payment amount/rate for the service, effective January 1, 2022. The BBA of 2018 established interim dates to implement the payment reduction via notice and comment rulemaking: (a) establish a new modifier to identify services furnished in whole or in part by a PTA or OTA by January 1, 2019 and (b) require the modifier on claims beginning January 1, 2020.  For CY 2019, CMS created two payment modifiers as follows:

  • CQ modifier:  PT services furnished in whole or in part by PTAs and
  • CO modifier: OT services furnished in whole or in part by OTAs. 

For CY 2020, CMS established a de minimis standard for such services – meaning that portions of a service furnished by the PTA/OTA independent of the physical therapist/ occupational therapist (PT/OT), as applicable, that do not exceed 10 percent of the total service are not subject to the payment reduction; while portions of a service furnished by the PTA/OTA independent of the therapist that exceed 10 percent of the total service, or unit of service, must be reported with the CQ/CO modifier, alongside of the corresponding GP/GO therapy modifier.  Portions of services provided by the PTA/OTA together with the PT/OT are counted as services provided by the PT or OT. 

For CY 2022, in response to stakeholders concerns and to promote appropriate care, CMS revised the de minimis policies and defined 2 exceptions when the de minimis standard is not applied:

  • In cases where there is one final 15-minute unit left to bill, the “8-minute rule” rule is applied when the PT/OT furnishes 8 or more minutes (the Medicare billing requirement for that final 15-minute service unit) – that final unit is billed without the CQ/CO modifier because the PT/OT provided enough minutes on their own (more than half) to report the service.
  • When there are two units of the same service remaining to be billed, and the PT/OT and the PTA/OTA each furnish between 9 and 14 minutes of a 15-minute timed service where the total time of therapy services furnished in combination by the PTA/OTA and PT/OT is at least 23 but no more than 28 minutes, one unit of the service is billed with the CQ/CO modifier (for the unit furnished by the PTA/OTA) and one unit is billed without it (for the unit furnished by the PT/OT).

For more information about when the de minimis policy is applied and for the billing examples that we indicated were forthcoming in the CY 2022 PFS final rule, see the section on this webpage titled Billing Examples Using CQ/CO Modifiers for Services Furnished in Whole or in Part by PTAs and OTAs.

If you have questions about the Medicare Program, you should first get in touch with your Medicare Contractor. To find contact information, please use the Provider Compliance Interactive Map.

For more information about other outpatient therapy payment policies, please see:

For applicable coverage policies for therapy services, please refer to the Medicare Benefit Policy Manual:

Other

A New Advance Beneficiary Notice of Noncoverage (ABN) Frequently Asked Questions (FAQs) Document Is Now Available

On August 16, 2018, CMS issued a new Advance Beneficiary Notice of Noncoverage (ABN) Frequently Asked Questions (FAQ) document to reflect the changes of the Bipartisan Budget Act of 2018. Please find the document in the below Downloads section titled: “August 2018 ABN FAQs”.

 

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DISCLAIMER: The contents of this database lack the force and effect of law, except as authorized by law (including Medicare Advantage Rate Announcements and Advance Notices) or as specifically incorporated into a contract. The Department may not cite, use, or rely on any guidance that is not posted on the guidance repository, except to establish historical facts.