Medicare Caps on Therapy Services

by  Christine Woolstenhulme, QCC, QMCS, CPC, CMRS
October 9th, 2014

Medicare has set annual therapy caps at $1920 and they start over Jan. 1 of each year.  Medicare combined the therapy limits SLP (Speech-Language Pathology) and PT (Physical Therapy) for a combined total of $1920.00 in 2014. There is also a therapy cap limit for OT (Occupational Therapy) Services of $1920.  These both have a threshold of $3700. (Be sure to contact your local carrier to verify limits).

If you feel the Beneficiary qualifies for a therapy cap extension you can bill for additional services using a KX modifier, therefore attesting that the services are reasonable and necessary and there is documentation supporting the decision.  In addition, you must have the Beneficiary sign an ABN.  If Medicare determines the therapy services aren’t medically reasonable and necessary, the Beneficiary is responsible (if a proper ABN was implemented), being made aware the service may not be a covered benefit and made the decision to proceed with the treatment above the outpatient therapy cap limits.

Medicare is implementing a manual medical review to be completed on every claim after the beneficiary’s services exceed $3700, with the exception of Critical Access Hospitals (CAH’s) and all claims with a KX modifier. Keep in mind if you do get paid and the cap has been reached when the recovery auditor matches the claim to the medical record and his findings are not favorable, you will receive a detailed letter on where to send the overpayment. To read more about it (Click Here).

Therapy cap applies to all part B outpatient therapy settings. The therapy cap will apply to outpatient hospitals as detected by:


For more information on CMS therapy caps for providers and Medicare Fact Sheet for Beneficiaries: Limits on Therapy Services  (Click Here)



Medicare Caps on Therapy Services. (2014, October 9). Find-A-Code Articles. Retrieved from

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