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AOTA Action Alert!

January 11, 2018

Capitol Hill

A cap on Medicare outpatient therapy services went into effect on January 1st after Congress failed to act at the end of 2017. This $2,010 cap for occupational therapy services applies to all patients being reimbursed for outpatient, Part B therapy services, except for those provided at Hospital Outpatient Departments/Clinics (HOPD). The law applying the cap to HOPDs expired December 31, 2017. The Medicare therapy cap will in many cases deny access to medically necessary occupational therapy services for the most vulnerable Medicare beneficiaries

Last year, Congress drafted bi-partisan legislation to permanently repeal the therapy cap and replace it with a targeted review of claims.  However, the exceptions process expired at the end of 2017, and Congress failed to enact any legislation that would keep the cap from taking effect in 2018.  Congress must take action soon to prevent beneficiaries from hitting the cap and to end this policy.


AOTA has consistently reached out to the Center for Medicare and Medicaid Services (CMS) officials for guidance on how to handle claims approaching or exceeding the current cap, but has received no answer as of the publication of this article. Until we receive further guidance, AOTA recommends that therapy professionals issue a mandatory Medicare notice, called an Advanced Beneficiary Notice of Non-Coverage or “ABN,” to all Medicare beneficiaries they treat who reach the $2,010 cap.  The ABN is issued in situations where Medicare payment is expected to be denied.  Because Congress didn’t extend the exceptions process permitting the attachment of a KX modifier or the manual medical review process, it is your duty to notify your patients that their therapy services may be limited.


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