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Therapy Services


Extension of Therapy Cap Exceptions

The Medicare Improvements for Patients and Providers Act of 2008 was enacted on July 15, 2008.  One provision of this legislation extends the effective date of the exceptions process to the therapy caps to December 31, 2009.  Outpatient therapy service providers may now resume submitting claims with the KX modifier for therapy services that exceed the cap furnished on or after July 1, 2008.  

For physical therapy and speech language pathology services combined, the limit on incurred expenses is $1810 for calendar year 2008.  For occupational therapy services, the limit is $1810.  Deductible and coinsurance amounts applied to therapy services count toward the amount accrued before a cap is reached.   Services that meet the exceptions criteria and report the KX modifier will be paid beyond this limit.

Before this legislation was enacted, outpatient therapy service providers were previously instructed to not submit the KX modifier on claims for services furnished on or after July 1, 2008.  The extension of the therapy cap exceptions is retroactive to July 1, 2008.   As a result, providers may have already submitted some claims without the KX modifier that would qualify for an exception.  

Providers submitting these claims using the 837 institutional electronic claim format or the UB-04 paper claim format would have had these claims rejected for exceeding the cap.   These providers should resubmit these claims appending the KX modifier so they may now be processed and paid.  Providers submitting these claims using the 837 professional electronic claim format or the CMS-1500 paper claim format would have had these claims denied for exceeding the cap.   These providers should request to have their claims adjusted in order to have the contractor pay the claim.    

In all cases, if the beneficiary was notified of their liability and the beneficiary made payment for services that now qualify for exceptions, any such payments should be refunded to the beneficiary.


Medicare Part B provides coverage for many types of therapy services. This document serves as a guide to direct professionals to additional resources regarding rehabilitation therapy services, coverage requirements, payment systems, and points of contact for further information.

The Medicare contractor who pays your claims is the best source of answers to specific Medicare questions. Contractors are Carriers, Intermediaries, or Program Safeguard Contractors who interpret Medicare laws, develop local policies, and educate providers. Please use the Medicare Contractors Toll-free Customer Service websites and toll-free phone numbers for local coverage policy and other general instructions.

If you are have difficulty communicating with your contractor, use the Regional Office Contacts web page to identify the CMS Regional Office servicing your area of operations and utilize either the toll-free number or mailing address for assistance.


Medicare Claims Processing Manual, Chapter 5, Sections 10, 20, 30, 40, 100 [PDF, 431KB]

Medicare Benefit Policy Manual, Chapter 15, Sections 220 and 230 [PDF, 831KB]

CR 3648: Changes to Chapter 15, Sections 220 and 230 [PowerPoint Zipped, 84KB]

CR 4115 [PDF, 173KB]

MM4115 [PDF, 306KB]

CR4226 [PDF, 375KB]

CR5253 [PDF, 223KB]

Related Links Inside CMS

Regional Offices

National Correct Coding Initiative Edits

Related Links Outside CMSExternal Linking Policy

APTA - American Physical Therapy Association

AOTA - American Occupational Therapy Association

ASHA - American Speech-Language-Hearing Association


Page Last Modified: 07/16/2008 1:43:23 PM
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