Medicare Part B Therapy Caps – Update

Carl J Pucci

AHCA has provided an update with regard to the Medicare Part B exception process. As previously reported, the “extender payment policies” expired on December 31, 2017.  Congress has yet to enact legislation to address this issue and may defer action until Mid-February.

Below is the AHCA Bulletin which contains an FAQ providing members with detailed information and potential next steps by CMS.

UPDATE: Impact of the Congressional delay on Medicare extenders including Part B therapy caps starting on January 1, 2018

On December 22, 2017, we informed you that Congress had adjourned for 2017 without enacting legislation to address what is often referred to as Medicare "extender payment policies." These policies expired on December 31 and include the Part B therapy cap exception process. This means that effective January 1, 2018, SNFs are operating under prior therapy caps without any exceptions based on patient need. Specifically, there is now a hard cap of $2,010 on the annual amount of allowed charges for Medicare Part B physical therapy and speech-language pathology services (PT/SLP) combined and a separate limit of $2,010 for occupational therapy (OT) services. 

Although we had expected that Congress would likely address this issue by the time the current Continuing Resolution expires on January 19, it now appears that Congress may again defer action on the Medicare extenders and therapy caps until at least February 16 with another Continuing Resolution. This has extended the uncertainty about beneficiary access to therapy services for a few more weeks. However, we remain confident that Congress will act to address this issue soon. 

Currently, there is a bipartisan and bicameral agreement on a policy to permanently repeal the Medicare outpatient therapy caps that is broadly supported by therapists, providers, and consumers that is awaiting a legislative vehicle to become enacted. However, if they are not able to get final agreement on a permanent therapy cap repeal, there is an overwhelming probability they will enact a one or more year extension of the current exceptions process, as they have done several times previously.

As mentioned in a prior update, for those beneficiaries and providers that are impacted by the caps, historically, Congress has retroactively permitted CMS to pay facilities for the therapy provided over the cap threshold. We will continue to communicate our concerns to both Congress and CMS and advocate for a solution to the issues we are facing. 

The remainder of this update is a Frequently Asked Questions (FAQ) format intended to provide updated information to AHCA/NCAL members regarding:

  1. who the Medicare Part B therapy caps impact,
  2. temporary changes to the Centers for Medicare and Medicaid Services (CMS) claims processing of outpatient therapy claims,
  3. information about appropriate beneficiary notification during this period of uncertainty, and 
  4. how to advocate for restoration of beneficiary access to necessary outpatient therapy services.

Q1: Who do the Medicare Part B therapy caps impact?

A1: Beginning January 1, 2018, there is a hard cap of $2,010 on the annual amount of allowed charges for Medicare Part B physical therapy and speech-language pathology services combined, and a separate limit of $2,010 for occupational therapy services. 

  • See this MLN Matters article for more information on the 2018 therapy cap amounts. 
  • Services furnished to a beneficiary in 2017, even if under the same episode of care would not apply to the 2018 caps. The cap dollar counts start on January 1, 2018. 
  • For each cap threshold, all services furnished in 2018, regardless of the number of episodes of care would apply to the same cap threshold. For example, if a beneficiary used up $500 of PT services during the first week of January, then stopped. Then started PT services during the third week of January for a completely different condition, the PT/SLP cap dollar count for the second PT episode would start at $500 and not $0.  

Q2: What temporary changes has CMS announced regarding how Medicare Part B therapy claims will be processed in 2018?

A2: On January 16, the Centers for Medicare and Medicaid Services (CMS) issued the following statement:

CMS is committed to implementing the Medicare program in accordance with all applicable laws and regulations, including timely claims processing. Several Medicare legislative provisions affecting providers and beneficiaries recently expired, including exceptions to the outpatient therapy caps, the Medicare physician work geographic adjustment floor, add-on payments for ambulance services and home health rural services, payments for low volume hospitals, and payments for Medicare dependent hospitals. CMS is implementing these payment policies as required under current law. 

However, CMS is taking steps to limit the impact on Medicare beneficiaries by holding claims affected by the therapy caps exceptions process expiration for a short period of time beginning on January 1, 2018. 

CMS is not holding any other claims except those affected by the therapy caps. If legislation regarding the therapy caps is not enacted in this short period of time, then CMS will release and process the therapy claims accordingly. Under current law, CMS may not pay electronic claims sooner than 14 calendar days (29 days for paper claims) after the date of receipt, but generally pays clean claims within 30 days of receipt.

This means that CMS will temporarily delay the processing of all Medicare Part B outpatient therapy claims affected by the therapy caps for up to 30 days after receipt. Typically, Medicare Administrative Contractors (MACs) pay clean electronic claims 14 days after receipt. For example, if a SNF submitted a claim on February 1 for outpatient therapy services furnished during January, then instead of processing the claim on February 15, the MAC may wait until March 3 to pay the claim. If Congress does not resolve the therapy cap policy before the end of February, it appears that CMS intends to enforce the therapy cap limits and will deny payment above the $2,010 cap limits.   

Q3: How do SNFs notify beneficiaries/responsible parties that the beneficiary has reached either or both PT/SLP or OT $2,010 caps, and before the enactment of cap relief legislation in 2018?

A3:  This is a difficult question to answer because to date, neither CMS or the MACs have issued clear guidance that is applicable when there is no available cap exceptions process. Since early December 2017, we have made CMS aware of questions related to this issue and have requested they provide appropriate and timely billing guidance. In the absence of formal CMS guidance, AHCA/NCAL is recommending that outpatient therapy providers issue an advance beneficiary notice (ABN) notice to any beneficiary that has reached the applicable $2,010 PT/SLP or $2,010 OT cap limit for services furnished in 2018, with an explanation that because of the therapy caps, Medicare does not cover PT/SLP services combined or OT services separately over $2,010 per calendar year. 

The ABN informs the beneficiary why Medicare may not or won't pay for a specific item or service and allows the beneficiary to choose whether or not to get the item or service and accept financial responsibility. ABN issuance allows the provider to charge the beneficiary if Medicare doesn't pay. If the ABN isn't issued when it is required and Medicare doesn't pay the claim, the provider/supplier will be liable for the charges.      

If a provider issues an ABN due the beneficiary surpassing the cap limit, and Congress subsequently enacts legislation to restore coverage for therapy services furnished above the caps, then AHCA/NCAL will share any guidance from CMS regarding how to submit claims for services furnished above the cap limits. 

Q4: Is there anything SNF providers can do to encourage Congress to enact legislation to restore beneficiary access to necessary SNF Medicare Part B therapy?

A4: AHCA/NCAL encourages providers to educate their members of Congress about the problems therapy caps create on beneficiary access and care delivery, particularly for residents with multiple chronic conditions and mobility deficits in the SNF and assisted living environments. Once the language of the final proposed cap relief legislation and the way it will be paid for is put forth by Congress, we will notify you about any specific advocacy activities we recommend.   

For questions related to the status of Medicare Part B Therapy Caps and 2018 payment and billing policy, please contact Mike Bassett, AHCA Vice President, Government Relations.


Carl J. Pucci
Chief Financial Officer
518-462-4800 x36