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Therapy Cap Repeal: What You Need to Know

Pyhiscal Therapy

Recently congress introduced new legislation that included a repeal of the 2,010-therapy cap, which President Trump signed.

The American Physical Therapy Association (APTA) did support the end to the hard cap, since it is seen as a win for the most vulnerable of Medicare patients. But, with this change comes a new system with its own problematic areas to work with.

Here's what you need to know, all the good, the bad and the ugly, and how it affects you and how to plan.

With the removal of the hard cap, lawmakers also adopted a new system of payment thresholds and triggers as well as a differential payment rate of physical therapist assistants (PTAs) and occupational therapy assistants (OTAs). The payment differential was strongly opposed by the APTA. This new payment differential will start in 2022 and it states that PTAs and OTAs will be paid 85% of the Medicare physician fee. With this payment differential not being implemented until January 1. 2022, there is still time for the Centers for Medicare and Medicaid Services (CMS) to explore solutions.

The Good:

  • This legislation provides a fix for the therapy cap, it has permanently extended the current exceptions process and eliminated the need to address the same issue from year to year.

  • Claims that are above $2,010 will still require the use of the KX modifier.

  • The threshold for targeted medical review has been lowered to $3,000 through 2027, but CMS is not going to be receiving any increase in funding for pursuing expanded medical review.

  • Claims that are above $ 3,000 are no longer automatically be subjected to targeted medical review. Now only a percentage of providers under certain criteria will be targeted, for example ones who have had a high claims denial percentage.

The Bad and The Ugly:

  • These legislation changes will hurt clinics that depend on PTAs and have a large proportion of Medicare patients.

  • The payment differential on PTAs and OTAs that will begin on January 1 ,2022.

How to effectively deal with these changes:

  • Communicate new changes with clinical and billing teams. Make sure that they fully understand, have all clinical and billing team members read the APTA announcement.

  • Efficient documentation will now matter more than ever. PT and PTAs now must do more in less time and will need to adjust accordingly. Review how to proper documentation guidelines with them for maximum efficiency.

For more information on this new legislation please visit the APTAs website and the CMS website.

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