Health Information Management

Master the -KX modifier and therapy documentation

JustCoding News: Outpatient, November 4, 2009

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by Kate Brewer, PT, MBA, GCS

The therapy cap exception process for skilled nursing facilities is set to expire December 31. As of now, the only action taken is the introduction of legislation to repeal the caps on January 7 in the form of the Medicare Access to Rehabilitation Services Act.

If Congress does not act on this before January 1, 2010, the therapy caps will remain in place with no exception process. Until then, skilled nursing facilities must abide by the therapy cap process as outlined in Chapter 5, section 10.2(c), of the Medicare Claims Processing Manual.

Under the exception process, when a therapist identifies that a beneficiary qualifies for medically necessary services in excess of the therapy caps, he or she can identify this by appending modifier -KX to the claim for the charges in excess of the cap. However, this is not the only necessary step.

The Medicare Claims Processing Manual states: “Exceptions shall be identified by a modifier on the claim and supported by documentation.” Supporting documentation is necessary because the presence of the modifier does not necessarily qualify for an exception on its own.

When a claim with a -KX modifier is called into review by your fiscal intermediary, Medicare administrative contractor, or carrier, and documentation to support the use of the -KX modifier is not present, the services in excess of the therapy caps could be denied.

Supporting documentation
Documentation should be present in the medical record when the beneficiary reaches the cap. This documentation should include specific justification for why the beneficiary qualifies for medically necessary services in excess of the therapy cap. Such justification may include the following:

  • The beneficiary’s medical condition and diagnosis. Documentation should include any existing medical diagnosis that may affect or complicate the beneficiary’s therapy treatment. Comorbidities and exacerbations of chronic diseases can slow progress, so noting their existence will help justify the cap exception. Documentation should list the conditions that are affecting recovery and progress.
  • The services provided, including the type, frequency, and duration. This information helps convey the intensity and nature of the services provided to the beneficiary to help justify the medical necessity.
  • An overview of the patient’s condition and progress. To help support the therapy cap exception, note how the resident has responded to therapy services and the progress he or she has made toward the long-term goal.
  • A statement of medical necessity to support further therapy services. Ideally, this statement would note the long-term goal and the resident’s qualification to receive further skilled therapy services based on medical necessity.

An example of documentation that justifies the therapy cap exception is as follows:

Patient’s progress has been affected by existing diagnosis of rheumatoid arthritis, which has affected her ability to heal and perform mobility tasks following the surgery for her hip fracture. As noted in the documentation, significant progress has been made, but physical therapy treatment is still medically reasonable and necessary to progress toward long-term goal of independence as prior to admit.

In addition to justifying the therapy cap exception when the cap is reached, you should also acknowledge that therapy services were provided in excess of the caps in the resident’s discharge note. You can accomplish this by including language in the discharge note, such as:

The services provided to the patient exceeded the Medicare Part B cap for the year on February 22, 2009. Services were continued in accordance with the automatic exception process as the resident showed good potential to continue to improve on mobility skills to return to prior functional level of independence.

To check whether your facility’s staff members are providing proper documentation to support the use of modifier -KX, pull a sample of records for beneficiaries who have exceeded the therapy caps for 2009 to ensure that documentation is present. Without it, your claims may be at risk for denial.

Editor’s note: Kate Brewer, PT, MBA, GCS, is the president and owner of Progressive Rehab Solutions, a company that provides practical solutions to practice management, compliance, documentation, and coding issues, and vice president of rehab services at Greenfield (WI) Rehabilitation Agency, Inc. E-mail her at

This story was published in the November issue of Billing Alert for Long-Term Care.

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