Therapy Cap

The Middle Class Tax Relief and Job Creation Act of 2012 (H.R. 3630) was signed into law on February 22, 2012. The law extends the Medicare Part B Outpatient Therapy Cap Exceptions Process through December 31, 2012.

The statutory Medicare Part B outpatient therapy cap for Occupational Therapy (OT) is $1,880 for 2012, and the combined cap for Physical Therapy (PT) and Speech-Language Pathology Services (SLP) is also $1,880 for 2012. This is an annual per beneficiary therapy cap amount determined for each calendar year. Similar to the therapy cap, there is a threshold of $3,700 for PT and SLP services combined and another threshold of $3,700 for OT services. CMS has the authority to review any claim at anytime. Services above the $3,700 are subject to manual medical review and certain providers will be required to submit a request for an exception.

The therapy cap applies to all Part B outpatient therapy settings and providers including:

• Private practices
• Part B skilled nursing facilities
• Home health agencies (TOB 34X)
• Outpatient rehabilitation facilities (ORFs)
• Rehabilitation agencies (Comprehensive Outpatient Rehabilitation Facilities-CORFs)
• Hospital outpatient departments (HOPDs)-beginning Oct. 1, 2012 until Dec. 31, 2012

The law requires an exception process to the therapy cap that allows providers to receive payment from Medicare for services above the therapy cap amount. No automatic exceptions will be granted in 2012. Providers will be required to submit requests for exceptions to the threshold in advance of furnishing therapy services above the threshold. Providers within a Medicare Administrative Contractor (MAC) jurisdiction will be divided into three Phases. Providers may go to the following link to determine which Phase they have been assigned (you are in Phase III if not listed in Phase I or II):

https://data.cms.gov.dataset/Therapy-Provider-Phase-Information/ucum-64-bit

The Phases are as follows:

• Phase I            Oct. 1, 2012 to Dec. 31, 2012
• Phase II           Nov. 1, 2012 to Dec. 31 2012
• Phase III          Dec. 1, 2012 to Dec. 31, 2012

Critical Access Hospitals (CAHs) are not subject to the therapy manual medical review exception process.  Services provided in a critical access hospital do not count toward the therapy cap.  Provider letters were sent to CAHs in error and should be disregarded if you are a CAH.

You can contact CMS with questions about the therapy cap and new threshold via a designated e-mail box at therapycapreview@cms.hhs.gov.