Medicare Therapy Cap and Therapy Cap Exceptions for 2017

August 7, 2017
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As we approach the latter months of this year, this is a reminder of how the Medicare therapy cap rules apply during 2017.


  • Regular Medicare Therapy Cap.  The annual Medicare therapy cap is $1,980 for 2017.  As in past years, the cap for physical and speech therapy is combined-so for 2017, it is a combined $1,980.  Occupational therapy has its own (additional) $1,980 cap.  The cap exception process is still in place-so if PT or OT services are medically necessary, patients can exceed the cap as long as the KX modifier is attached to the claim.  Patients do not need to have any specific dx to qualify for the cap exception-the therapy only needs to be medically necessary.


  • “Hard cap” ($3,700 Cap).  A few years ago, CMS required a manual audit of all charges above $3,700 for a patient.  This is no longer the case.  As with all charges, CMS has a right to audit for medical necessity and it stands to reason that when a patient reaches the 40+ visits necessary to result in $3,700 of charges, medical necessity may be harder to demonstrate.  However, for the handful of patient who do exceed $3,700 of charges, as long as you can demonstration and document medical necessity (and meet the other general Medicare requirements), Medicare is required to pay for the therapy.


  • KX Modifier.  When a patient qualifies for the exception to the $1,980 cap, all claims above the cap must include the KX modifier which signifies to CMS that therapy above the cap is medically necessary.