CMS Pub. 100-08, ch. 3, § 3.3.2.7

This section applies to MACs.

Financial limitations on therapy services (therapy caps) were originally initiated by the

Balanced Budget Act (BBA) of 1997. Section 50202 of the BBA of 2018 repeals

application of the therapy caps but 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. Please use

the applicable threshold for the CY under review.

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.