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CMS removes functional reporting requirements and changes therapy provisions

CMS has released an update on therapy caps and functional reporting.

Effective for dates of service on or after January 1, 2018, providers of therapy services shall continue to report the KX modifier on claims as applicable; however, the modifier no longer represents an exception request but serves as a confirmation that services are medically necessary as justified by appropriate documentation in the medical record after the beneficiary has exceeded the threshold of incurred expenses.

Therapists must continue to track their patients’ utilization toward the threshold and attach the KX modifier to all claims for therapy services that are medically necessary that exceed the annual threshold amount (in 2019, the threshold is $2,040 for PT and SLP services combined and $2,040 for OT services). The patients’ utilization can be determine using the Common Working File, contacting the Medicare Administrative Contractor, and referencing the patient/staff’s recollection. By attaching the KX modifier to a claim, a therapist attests that the services billed:

  • are reasonable and necessary
  • require the skills of a therapist
  • are justified by supporting documentation in the patient’s medical record

Claims that exceed $3,000 in total are subject to a targeted medical review. This change is effective for dates of service on or after January 1, 2019. HCPCS G-codes and severity modifiers for functional reporting are no longer required on claims for therapy services.

More information on functional reporting can be found here: