Manual Medical Review

Manual Medical Review of Therapy Services

Effective October 1, 2012, according to the Balanced Budget Act of 1997 enacted financial limitations on outpatient physical therapy, occupational therapy, and speech-language pathology services in all settings except outpatient hospital. Exceptions to the limits were enacted by the Deficit Reduction Act, and have been extended by legislation several times. 

Section 3005 of the Middle Class Tax Relief and Job Creation Act of 2012 (MCTRJCA) extended the therapy caps exceptions process through December 31, 2012, and made several changes affecting the processing of claims for therapy services. Suppliers and providers will continue to use the KX modifier to request an exception to the therapy cap on claims that are over the 2012 cap amounts — $1,880 for occupational therapy services and $1,880 for the combined services for physical therapy and speech-language pathology. Use of the KX modifier indicates that the services are reasonable and necessary and that there is documentation of medical necessity in the patient’s medical record. 

MCTRJCA also established a requirement for manual medical review of claims over $3,700. In mid-September 2012, CMS will mail a letter to beneficiaries who have received therapy services in Calendar Year (CY) 2012 over $1,700. The CMS letter will inform them of the $1,880 therapy cap, the exceptions process and that, if services over the cap do not qualify for the exception as medically necessary, that they will be responsible for the charges.

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