Medicare says ‘no.’ Now what?

It’s no secret: In order to stay in business, you must be paid for the services you provide.  That’s as true in physical therapy as it is in any other private practice endeavor. 

In most cases, the Centers for Medicare and Medicaid Services (CMS) pays claims. But  suppose for a moment that CMS denies your claim.  What will you do?

Would it surprise you to hear that most therapists don't know what they’d do?  If you’re among them, it’s time to sharpen your information skills.

Appealing Medicare denials is becoming more and more of a likelihood for all outpatient therapy providers , and it can be a daunting task rife with stress. However, most Fiscal Intermediaries (FIs) or Medicare Administrative Contractors (MACs) send specific guidance on information they need to see in a denial. As this information sometimes differs, we’ve included here some general information that may be helpful.

In some cases, denials may be due to incomplete billing, such as a claim lacking the modifier applied to the CPT code. Denials can also result from inadequate supporting documentation that has been submitted in response to an Additional Documentation Request (ADR).

 Audit contractors are instructed to deny services if they meet any of the following

  • The item or service does not fall into a Medicare benefit category.
  • The item or service is statutorily excluded.
  • The item or service is not reasonable and necessary.
  • The item or service does not meet other Medicare program requirements for payment.

Auditors must adhere to CMS-issued national coverage determinations (NCDs) and regional local coverage determinations (LCDs). In the absence of NCDs or LCDs, the contractors are responsible for determining whether services are reasonable and necessary, based on the following criteria:

  • It must be safe and effective.
  • It must not be experimental or investigational.
  • It must be furnished in accordance with accepted standards of practice for the diagnosis or treatment of the beneficiary's condition.
  • It must be provided in a setting appropriate to the beneficiary's medical needs and condition, and ordered and performed by qualified personnel.
  • It must meet, but not exceed, the beneficiary's medical need.

It’s not uncommon for denials to result from billing coding errors or claims that include diagnoses that fall outside the LCD. So let‘s say that, for whatever reason, your claim has been denied. Here’s what you should know to prepare an effective appeal:

  1. Medicare has a formal appeals process; your MAC will have interactive PDF forms and instructions to get you started.  Also check the CMS appeals website for complete rules and references.
  2. Recoupment (for post-payment review) will begin on the 41st day from the date of the demand letter if your MAC does not receive, by the 30th day from the date of the demand letter, either payment in full, a request for an extended repayment schedule, or a valid redetermination request.
  3. Organize all the documents and include a cover letter with a case executive summary (think of it as an excellent D/C report), a rebuttal of the denial as well as an index of documents.  Make an effort to put items into evidence as early as you can in the appeals process.
  4. In spite of  a 24-to-30-month delay on ALJ hearings right now, appeal your case if you have deemed it defensible.  CMS collects data on appeals, and when you win, you will get interest on your payment.

Auditors can review billing history obtained from Medicare databases,  any documentation submitted with the claim, or other documentation
subsequently submitted by the provider. Information submitted by the provider must corroborate the documentation in the beneficiary's medical record and confirm that Medicare coverage criteria have been met.

In general, your appeal letter should include:

  • Nursing notes that support the functional level of the patient and the ongoing need for therapy.
  • Physician skilled certifications (for Medicare Part A patients).
  • Documentation from other disciplines that may support cognitive/communicative difficulties experienced by thepatient.
  • Dietary consultations that may support the presence of swallowing disorders.
  • Hospital History and Physical to add medical diagnoses that serve as complexities to the case.

You should compile an expanded, detailed summary of progress from the start of care; it should include both objective data and other supporting information that may not have been contained in the original documentation. Write the appeal as an explanation of why the services were rendered, what could have happened if they weren't rendered, and what functional outcomes the patient achieved because of the services.

It is important to remember that the issuers of denials are not typically therapists. They are trained auditors who determined, for whatever reason, that the services rendered were not reasonable and/or medically necessary.  Your task is to persuade them differently!


Physical Therapist

Physical Therapy

Healthpro Rehab

Managed Care in Post-Acute Settings

Many patients require continued medical care, either at home or in a specialized facility, following a hospitalization for injury or illness. “Post-acute care” refers to a range of medical care services, including therapy, that support the patient’s continued recovery from illness or management of a chronic illness or disability.

Skilled-nursing facilities provide skilled nursing, medical management and therapy services on a 24-hour basis to patients who do not require as high-intensity services as provided in the hospital setting.

There are several other settings for post-acute managed care:

Home health care is a regulated program of care provided through certified home health agencies, delivered by health care professionals in the patient’s home for treatment of a medical condition, illness or disability.

Hospice provides comprehensive, interdisciplinary health care to terminally ill patients, as well as bereavement and support services to the patients’ loved ones.

Medical rehabilitation focuses on improving or restoring functional independence for patients with disabilities resulting from injury, illness, or a medical condition. Medical rehabilitation is provided at all levels and locations of health care, including in general acute-care hospitals, inpatient rehabilitation facilities, skilled-nursing facilities, long-term-care hospitals, outpatient programs and home health agencies.

Long-term-care hospitals provide hospital-level care for medically complex, long-stay patients. They meet the same requirements as general acute-care hospitals, but have significantly longer average lengths of stay — 25 days or greater.

All of these facilities face the obstacle of new reimbursement schedules, as presented by the Centers for Medicare and Medicaid. Managed care programs for Medicare patients, called Medicare Advantage programs, are presenting the dual challenge of lower payments and increased paperwork.

Professional observers of the health care system say Medicare Advantage plans are attractive to beneficiaries because they often offer lower co-payments or co-insurance.

As more beneficiaries enroll in Medicare Advantage plans and as more states look to rein in costs through expansion of Medicaid managed care, post-acute providers such as nursing homes face the same kind of managed-care growing pains hospitals experienced in the 1990s.

Providers and patient advocacy groups worry that managed care might have harmful effects on post-acute patients, particularly those with disabilities who need long-term services and support in their homes and communities.

Nevertheless, post-acute-care providers are finding they can no longer survive solely in the fee-for-service world. Instead of primarily billing traditional Medicare and Medicaid, these providers increasingly are negotiating with managed-care plans to increase their revenue stream and stay viable.

As Medicare Advantage grows, providers are having to contract with those plans to get those patients. This has created challenges for providers who know what they get paid under traditional Medicare, but, when dealing with managed-care plans, must negotiate rates and comply with each plan's requirements.

Providers say that traditional Medicare payment rates are better than Medicare Advantage rates. Depending on the market, managed-care rates are 10% to 40% less than traditional Medicare rates. Some providers may accept lower rates with the hope— not always realized — that insurers will drive volume to their facilities.

Meanwhile, states are moving more long-term services and supports — including personal services in the home, assisted living or residential arrangements — into Medicaid managed care.

No doubt about it, post-acute care providers face challenges in navigating the new managed-care world in Medicare and Medicaid. But providers, advocates and policy analysts agree they don't have much choice. It’s the new way of doing business, and advisors agree that “to ignore it is to your own detriment.”


Alix Partners

California Hospital Organization

Modern Health Care



Documenting therapy services is essential to the case

As is most service areas, “the job’s not done until the paperwork’s done.”  In the case of therapy service provided in skilled-care facilities, this means the provider therapist must provide sufficient documentation to the Centers for Medicare and Medicaid Services to meet requirements for payment.

Documentation plays a critical role in explaining the need for Medicare therapy services and justification on the use of the exceptions process.  Therapy providers are required to provide documented reports of each patient’s initial evaluation, diagnosis, prognosis, and plan of care; added documentation covers followup visits, reexamination, and subsequent discharge.

Documentation should also include objective measures of the patient's improvement as a means to justify therapy services above the cap. Because documentation is usually reviewed by Medicare contract nurses, rather than therapists, it should not be assumed that the reviewer will understand why the service requires the skill of a therapist. Providers must be careful to ensure that documentation is legible, relevant, and sufficient to justify the services billed.

The Centers for Medicare and Medicaid Services (CMS) states that therapy services shall be payable when the medical record and the information on the claim form consistently and accurately report covered therapy services. Documentation must comply with all legal/regulatory requirements applicable to Medicare claims. CMS outlines its minimal documentation requirement in the Medicare Benefit Policy Manual Publication, 100-02, Chapter 15, Section 220.3. Also available is a guide to educate providers on common documentation errors for outpatient rehabilitation therapy services.

In general, Medicare requires that therapy services are of appropriate type, frequency, intensity, and duration for the individual needs of the patient. Documentation should:

  • Establish the variables that influence the patient's condition, especially those factors that influence the clinician's decision to provide more services than are typical for the individual's condition.
  • Establish through objective measurements that the patient is making progress toward goals. CMS is aware that regression and plateaus can happen during treatment, and recommends that the reasons for lack of progress be noted and the justification for continued treatment be documented if treatment continues after regression or plateaus.

The following types of documentation of therapy services are expected to be submitted in response to any contractor request for documentation, unless otherwise specified. The timelines are minimum requirements for Medicare payment.

Evaluation: The initial evaluation, or the plan of care including an evaluation, should document the necessity for a course of therapy through objective findings. Evaluation shall include a diagnosis (where allowed by state and local law) and description of the specific problem(s) to be evaluated and/or treated; a Plan of Care consistent with the related evaluation; Progress Reports at least every 10 days to provide justification for the medical necessity of treatment; and discharge documentation that includes all treatment provided since the last progress report and indicates that the therapist reviewed the notes and agrees to the discharge.

All documentation must include adequate identification of the patient/client and the physical therapist or physical therapist assistant. The patient's/client's full name and identification number, if applicable, must be included on all official documents .All entries must be dated and authenticated with the provider's full name and appropriate designation.

Documentation must be authenticated, depending on the level of the therapist (skilled, assistant, student, etc.), by properly certified persons and should include indication of no-shows and cancellations.

We at Blue Sky Therapy are ready to assist your therapy – we’re the experts!

Blue Sky Therapy has a continued commitment to patient-driven quality, excellence, integrity and innovation in everything that we do. That’s why we are scrupulous about planning the treatment of each and every client, and carefully documenting the outcome!


Centers for Medicare and Medicaid

American Speech-Language-Hearing Association

American Physical Therapists Association

How does the Affordable Care Act help older Americans?

On March 23, 2010, President Obama signed the Affordable Care Act, which put in place comprehensive health insurance reforms aimed at making health care more affordable, accessible and of a higher quality, for families, seniors, businesses, and taxpayers alike.  Beneficiaries include previously uninsured Americans and Americans who had insurance that didn’t provide adequate coverage and security.

Refinements to the law have followed every year. Here are the highlights:

In 2010,  a new Patient's Bill of Rights went into effect, protecting consumers from the worst abuses of the insurance industry. Cost-free preventive services began for many.

In 2011,  people with Medicare began getting key preventive services for free, and also received a 50% discount on brand-name drugs in the Medicare “donut hole.”

In 2012,  Accountable Care Organizations and other programs helped  doctors and health care providers work together to deliver better care.

In 2013, open enrollment in the Health Insurance Marketplace began.

In 2014, all  Americans were given access to affordable health insurance options. The Marketplace allows individuals and small businesses to compare health plans on a level playing field. Middle and low-income families get tax credits that cover a significant portion of the cost of coverage. And the Medicaid program was expanded to cover more low-income Americans. All together, these reforms mean that millions of people who were previously uninsured now have coverage.

And in 2015,  the program was amended to begin paying  physicians based on value,  not volume.  The new provision ties physician payments to the quality of care they provide; those who provide higher value care will receive higher payments than those who provide lower quality care.  

Older Americans are benefiting also, as the Affordable Care Act provides affordability, access and quality for this age group.  New protections include strengthening Medicare, offering a range of preventive services at no cost, and giving discounts on drugs when in the coverage gap (also called the “donut hole”) in prescription drug coverage. For instance,  if you have Original Medicare, you may qualify for a yearly wellness visit and many preventive services for free.

Learn the details of how the health care law affects all people with Medicare:

Statistics show that Medicare is stronger today, thanks to the Affordable Care Act. In 2014, the Medicare Trustees projected that the Medicare Trust fund financing Medicare’s hospital insurance coverage will remain solvent until 2030, four years beyond what was projected in the 2013 report. Just a few years ago, the Medicare Trust fund was projected to run out of money by 2017.

For more information, call 1-800-MEDICARE (1-800-633-4227). TTY users can call 1-877-486-2048. Or click here to go online to the government’s Website for the Affordable Care Act.

We at Blue Sky Therapy are ready to assist your therapy – we’re the experts!

Blue Sky Therapy has a continued commitment to patient-driven quality, excellence, integrity and innovation in everything that we do. That’s why we are scrupulous about planning the treatment of each and every client, and carefully documenting the outcome!

This information is not intended to replace the advice of a doctor. Blue Sky disclaims any liability for the decisions you make based on this information.

This information only applies if you have Original Medicare. If you have a Medicare Advantage Plan (like an HMO or PPO), check with your plan for information about your plan’s coverage rules.



Looking at rehab after surgery? Blue Sky will be there!

What are the chances you’ll need some form of surgery – and some form of therapy afterwards – during your senior years? 

Very good.  Count on it.

You can also assume you’ll be undergoing that therapy in a short-term rehabilitation program,  often inside a skilled nursing facility.  Although friends and family may be willing and able to assist in this goal, optimal recovery can only be achieved through medical professionals.
Short-term rehabilitation facilities provide therapy for patients recovering from a surgery, illness or accident. Generally, programs for those needing short-term, in-patient rehabilitation last for as little as a couple of days to as many as several weeks.

In short-term rehabilitation, we help our patients to achieve their maximum functional capacity and get back to their normal lives in the shortest time possible. To achieve this goal, they receive physical, occupational and speech therapy from therapists who are part of a team with the patient’s physician, nurse, social worker, and, when needed, a nutritionist.  This team prepares the patient’s individualized treatment plan.

When your rehab facility calls on a therapist from Blue Sky Therapy, you can rest assured.  We’re a therapist-owned provider of contract rehabilitation services.  We’re widely known for our innovations in resident-centered care, and we can proudly claim to have set the standard in the rehabilitation industry, providing physical, occupational, and speech therapy to residents throughout eastern Ohio and western Pennsylvania.

Patients in Blue Sky Therapy’s partner facilities can relax and recover while receiving care and rehabilitation services.  Programs can involve more than one therapy session in a day, at a pace designed to enhance abilities without inhibiting healing.

What are the different kinds of therapy?

Physical therapy addresses musculoskeletal and neurological issues including joints, muscles, bones, nerves and spine. Therapists teach the skills needed to achieve maximum functional mobility as well as health, wellness and injury-prevention strategies.

Occupational therapy addresses the skills needed to perform the daily activities of life at home, at work, and in the community. Our therapists teach adaptive skills: how to use assistive devices, how to simplify processes, and how to improve mobility, range of motion and endurance.

Speech therapy focuses on the ability to communicate and interact with others. Therapists concentrate on restoring skills such as listening/hearing, speaking and writing,  as well as overcoming swallowing disorders and breathing/respiratory problems.

In addition, there are specialty programs that address joint replacement, balance and falls prevention, pain control, low vision, cognitive evaluation, and management of lymphedema (swelling in arms or legs), among others.

Depending on the skilled nursing facility, Blue Sky Therapy will provide six to seven days a week of rehabilitation.  Afterward, to ensure a smooth transition to home, the rehabilitation facility will usually assist with setting up homecare services.

Remember, if you have Medicare coverage you will need to qualify for skilled care in order for Medicare to pay for short-term rehabilitation. 

We at Blue Sky Therapy are ready to assist your therapy – we’re the experts!

Blue Sky Therapy has a continued commitment to patient-driven quality, excellence, integrity and innovation in everything that we do. That’s why we are scrupulous about planning the treatment of each and every client, and carefully documenting the outcome!

This information is not intended to replace the advice of a doctor. Blue Sky disclaims any liability for the decisions you make based on this information.


Fifty-Plus Advocate

Manual Medical Review Process for Therapy Claims extended through 2017

On April 16, 2015, the President signed into law the Medicare Access and CHIP Reauthorization Act of 2015 (see the entire bill by clicking on the link), which temporarily extends the therapy cap exceptions process and modifies the manual medical review process for therapy services through December 31, 2017.

In the meantime, providers should continue to apply the KX modifier on claims above the therapy cap.

The manual medical review process for Medicare Part B therapy services that exceed a $3,700 threshold was mandated in 2012 and requires reauthorization annually. Under the mandate, claims above $3,700 for physical therapy and speech language pathology services combined, and above $3,700 for occupational therapy services, are subject to manual medical review by recovery audit contractors (RACs). The caps are calculated per beneficiary, per year.
Manual medical reviews of outpatient therapy claims above the cap were put on hold last year, but existing RACs received approval on January 16, 2015 to resume sending additional documentation requests (ADRs) to Part B providers.

Review Process
Under a new post-payment review system introduced by the Centers for Medicare and Medicaid Services, RACs are required to review outpatient therapy claims using a tiered approach to ADRs. The new process, which went into effect in January 2015, permits RACs to review 100% of a provider's eligible claims using a 5-step approach to ADRs:
•    A RAC's first ADR may only review one claim, but …
•    The second ADR may review up to 10% of eligible claims,
•    The third ADR may review up to 25% of eligible claims,
•    Tthe fourth ADR may review up to 50% of eligible claims, and  
•    Finally, a RAC's fifth ADR to a particular provider may review 100% of the provider's total eligible claims. The new tiered approach retains the RAC's cycle of 45 days between ADRs.
The process allows for 100% review of provider claims above the $3,700 therapy caps ("eligible claims"), but prevents the RACs from requesting large and potentially unmanageable amounts of records at one time.

CMS believes the new manual review process meets the congressional mandate of a 100% review rate for outpatient therapy claims above the outpatient therapy cap, but will do so in a more equitable manner.

For now, the review process is limited to claims reviewed by existing RACs for claims made from March 1, 2014 through December 31, 2014. CMS has not yet finalized the process for claims made in 2015. The manual medical review process is also limited to claims made by Part B outpatient therapy providers, including but not limited to therapists' private offices, offices of physicians, Part B skilled nursing facilities, home health agencies, and hospital outpatient departments.

We at Blue Sky Therapy are ready to assist your therapy – we’re the experts!

Blue Sky Therapy has a continued commitment to patient-driven quality, excellence, integrity and innovation in everything that we do. That’s why we are scrupulous about planning the treatment of each and every client, and carefully documenting the outcome!


Wachler & Associates Health Care law firm

Therapy Cap and SGR Vote Results

According to the APTA, the Senate voted to approve a permanent fix for the Sustainable Growth Rate (SGR) by a vote of 92 to 8. The bill will now await the President's signature.

As a part of the SGR bill, Senators Cardin (D-MD) and Vitter (R-LA) proposed an amendment to permanently repeal the Medicare therapy caps. The amendment needed 60 votes to pass and failed by a vote of 58 to 42. Under the SGR bill, the therapy cap exceptions process will continue for 2 years until December 31, 2017.

For more information, visit

Thank you for all your actions in reaching out to Senate in an effort to permanently end therapy caps.  

Our senators need to hear from every one of us in the next few days!

The current Sustainable Growth Rate (SGR) formula patch and therapy cap exceptions process expired on March 31. During the last week of March, the House of Representatives passed H.R. 2, a bill that would permanently repeal that formula, which many claim is flawed, but the Senate adjourned for its April recess on March 27 without voting on the bill.  Therefore, the Centers for Medicare and Medicaid Services are now allowed to hold Medicare claims for physician services up to 10 business days.

When Congress returns from its two-week recess on April 13, the Senate will have one day to deal with the SGR, before CMS will have to resort to holding claims. CMS has reminded providers that, under current law, electronic claims are not paid sooner than 14 calendar days after the date of receipt (29 days for paper claims).  CMS will notify providers on or before April 11, regarding what next steps CMS will take.

Senate leaders have indicated they plan to vote on permanent repeal when they return. We must keep the pressure on the Senate to pass the SGR repeal and replacement bill so that they know how necessary and important this bill is to all of us!

The bill would add about $200 billion to the projected Medicare budget over the next 10 years. It would include replacing the SGR with an increase of 0.5% in Medicare physician reimbursement starting in July 2015 through December 2015, and then annual 0.5% increases lasting through 2019.

The measure would also consolidate various reporting programs, such as the Meaningful Use program for electronic health records and several quality reporting programs, into a new merit-based incentive payment system and would incentivize physicians to participate in alternative payment models such as accountable care organizations (ACOs).

The bill also would extend the Children's Health Insurance Program as well as funding for community health centers and the National Health Service Corps.

House leaders are optimistic about the bill, which in the words of House Minority Leader Nancy Pelosi would “replace the broken SGR formula and transition Medicare away from a volume-based system toward one that rewards value, ensures the accuracy of payments, and improves the quality of care."

The fix has also been endorsed by many medical groups including the American Medical Association and the Association of American Medical Colleges. Now add your voice, by contacting your senator – in Ohio, Sherrod Brown by email or by phoning (202) 224-2315; Rob Portman, by email or by phoning 202-224-3353; in Pennsylvania, Robert Casey Jr. by email or by phone, 202.224.6324 or Pat Toomey by email or by phone, (202) 224-4254.

We at Blue Sky Therapy are ready to assist your therapy – we’re the experts!

Blue Sky Therapy has a continued commitment to patient-driven quality, excellence, integrity and innovation in everything that we do. That’s why we are scrupulous about planning the treatment of each and every client, and carefully documenting the outcome!



Let’s work together to end the therapy cap!

On Thursday, March 26, the U.S. House of Representatives passed the Medicare Access and CHIP Reauthorization Act (H.R. 2), to repeal and reform the Sustainable Growth Rate (SGR),   while extending the Medicare therapy cap exception process only until December 31, 2017. The Senate has not yet voted on the legislation and is in recess until April 13.

In the meantime, Senator Ben Cardin, a Maryland Democrat, announced that he is prepared to lead the fight to end 18 years of temporary fixes to the therapy cap by ending the cap completely. The historic change could come through an amendment to H.R. 2. But there’s a challenge: Senators need to agree to allow a vote on Cardin's amendment.

The Centers for Medicare and Medicaid Services (CMS) has advised that they will typically hold claims for 14 calendar days, allowing Congress a short window of time when they return from the recess to come to an agreement and pass legislation to prevent cuts to payments and allow necessary therapy services to continue above the therapy cap amount of $1,940.

What You Can Do:  The American Physical Therapists Association, the American Occupational Therapy Association and American Speech and Hearing Association are asking that you please keep up communication with your legislators; encourage your patients and colleagues to reach out as well to support inclusion of full repeal of the therapy cap.  For Ohio and Pennsylvania partners, the contact information is as follows:

In Ohio, Sherrod Brown by email or by phoning (202) 224-2315; Rob Portman, by email or by phoning 202-224-3353; in Pennsylvania, Robert Casey Jr. by email or by phone, 202-224-6324 or Pat Toomey by email, or by phone, 202-224-4254.

Take just a few minutes to send an email to ask your representative to co-sponsor this important legislation and make sure your voice is heard as an advocate for physical, occupational, and  speech therapy.

We at Blue Sky Therapy are ready to assist your therapy – we’re the experts!

Blue Sky Therapy has a continued commitment to patient-driven quality, excellence, integrity and innovation in everything that we do. That’s why we are scrupulous about planning the treatment of each and every client, and carefully documenting the outcomes.


American Physical Therapists Association

American Occupational Therapy Association

Facebook: Stop the Medicare Therapy Cap 

“I need therapy. How much of the cost will Medicare pay?”

To most seniors on fixed incomes, that’s the first question that comes to mind.  Thank goodness we live in the Information Age – most of the answers are at the tips of our fingers!

First, find out how much your specific test, item, or service will cost:  talk to your doctor or other health care provider. The specific amount you’ll owe may depend on whether you have other insurance, how much your doctor charges, whether your doctor accepts assignment, the type of therapy provider, and the location where you get your test, item, or service.

Your doctor may recommend you get services more often than Medicare covers. Or, he or she  may recommend services that Medicare doesn’t cover. If this happens, you may have to pay some or all of the costs. It’s important to ask questions so you understand why your doctor is recommending certain services and whether Medicare will pay for them.

Medicare Part B (Medical Insurance) helps pay for medically necessary outpatient physical and occupational therapy, and speech-language pathology services.  (The government describes “medically necessary” as “Health Care services needed to prevent, diagnose, or treat an illness, injury, condition, disease or its symptoms and that meet accepted standards of medicine.”)

There are limits on these services when you get them from most providers. These limits are called “therapy caps” or "therapy cap limits."

The therapy cap limits for 2015 are:

  • $1,940 for physical therapy (PT) and speech-language pathology (SLP) services combined;
  • $1,940 for occupational therapy (OT) services.

Everyone with Medicare is covered.  First, though, you must pay the amount of your yearly deductible for Part B.  After that, Medicare will pay its share – 80 percent – of the remaining bill, and you will pay the final 20 percent. The Part B deductible is $147 for 2015.  Medicare will pay its share for therapy services until the total amount paid by both you and Medicare reaches either one of the therapy cap limits.

 (Note that both the United States House and Senate are considering amendments to the Medicare fee schedule.)

You may qualify for an exception to the therapy cap limits so that Medicare will continue to pay its share for your therapy services beyond the therapy cap limits. In this case, your therapy provider must:

  • Establish your need for medically reasonable and necessary services and document this in your medical record; and
  • Indicate on your Medicare claim for services above the therapy cap that your outpatient therapy services are medically reasonable and necessary.

As part of the exceptions process, there are additional limits called “thresholds.”  If you get outpatient therapy services higher than the threshold amounts, a Medicare contractor will review your medical records to check for medical necessity. The threshold amounts for 2015 are: 

  • $3,700 for physical therapy  and speech-language pathology combined; and
  • $3,700 for occupational therapy.

Generally when an exceptions process is in effect, if your therapy provider provides documentation showing that your services were medically reasonable and necessary and indicates this on your claim, Medicare will continue to cover its share above the $1,940 therapy cap limits.

Because Medicare doesn't pay for therapy services that aren't reasonable and necessary, your therapist or therapy provider must give you a written notice, called an Advance Beneficiary Notice of Noncoverage (ABN), before providing generally covered therapy services that aren't medically reasonable and necessary for you at the time. The ABN lets you choose whether you want the therapy services. If you choose to get these services, you agree to pay for them.

To find out of your test, item or service is covered, just go to this page.  It’s the official government site  for Medicare services.  Type in the name of the service you’re considering in the box at the top of the page, and you’ll know right away if it’s a covered procedure.

We at Blue Sky Therapy are ready to assist your therapy – we’re the experts!

Blue Sky Therapy has a continued commitment to patient-driven quality, excellence, integrity and innovation in everything that we do. That’s why we are scrupulous about planning the treatment of each and every client, and carefully documenting the outcome!

This information is not intended to replace the advice of a doctor. Blue Sky disclaims any liability for the decisions you make based on this information.

This information only applies if you have Original Medicare. If you have a Medicare Advantage Plan (like an HMO or PPO), check with your plan for information about your plan’s coverage rules.

More resources:

American Physical Therapy Association