How do I Calculate Medicare Therapy Cap?

Medicare rules and guidelines are constantly changing. However, Medicare has instituted a therapy cap to help control costs for the government to provide therapy to seniors. Although a moratorium has been passed multiple times to delay the onset of the therapy caps, they may become law at any time, and therapists should track their expenditures to allow for education of patients on their potential costs associated with any uncovered services. As of August 2010, after a patient has met their caps, therapists must complete a Cap Exemption Form to clarify the need for continued services beyond the capped coverage.

Instructions

• 1

  Calculate the anticipated daily cost of therapy for your patient. Determine the expected number of minutes to be billed and each code which you expect to bill. Reference Medicare's website for the most recent payment schedule to determine the cost of each billing code (see References). Make sure to only bill for one unit of service-based codes, such as electrical stimulation, regardless of the time you plan to spend to complete that treatment, but multiply the fee times the units of treatment for a time-based code. Add these numbers to assess the estimated daily cost of therapy.

• 2

  Multiple the anticipated daily cost of therapy by 0.80 because Medicare only covers 80 percent of the cost of therapy until the cap is met. For example, if the daily cost was $37.50, then you would multiply $37.50 x .8 = $30.

• 3

  Divide the current Medicare Part B cap, which is $1,860 for occupational therapy and $1,860 for physical therapy and speech therapy combined, by the estimated billed daily treatment amount. This will give you an estimated number of days on which treatment can be provided to the patient before his Medicare cap is met. So, continuing the example, $1,860 / $30 = 62 days of therapy.