Manual Medical Review

NASL 2019 Issue Briefs:


The Middle Class Tax Relief & Job Creation Act of 2012 established, in addition to the therapy caps, an annual threshold at $3,700 to be applied separately for the two categories of therapy services (occupational and physical/speech-language pathology combined) effective October 1, 2012. Medical review was required for services furnished above the threshold. The American Taxpayer Relief Act of 2012 (ATRA) also extended the medical review requirement for therapy services furnished January 1, 2013 through December 31, 2013.


In December 2013, Congress enacted a 3-month patch, which prevents the SGR cut to the Physician Fee Schedule and extends the therapy cap exceptions process and MMR process through March 31, 2014.

On April 16, 2015, President Barak Obama signed the bi-partisan, bi-cameral Medicare Access & CHIP Reauthorization (MACRA) Act into law. The new law (Public Law No: 114-10) repeals the flawed formula known as the Sustainable Growth Rate (SGR) that forced deep rate cuts to reimbursement of physician and other practitioner services paid under the Physician Fee Schedule with a new incentive program. 

Additionally, the new law extends the therapy cap exceptions process for another two years until December 31, 2017. 

On April 1, 2014, President Obama signed into law the Protecting Access to Medicare Act of 2014.  This new law extends the exceptions process for outpatient therapy caps through March 31, 2015.  Section 103 of this Act contains a number of Medicare provisions affecting the outpatient therapy caps and manual medical review (MR) threshold.

The therapy caps exceptions process for PT, OT, and SLP services was extended through the remainder of CY 2015, and for all of CY 2016 and CY 2017, when the Medicare Access and CHIP Reauthorization Act  (MACRA) was signed into law on April 16, 2015.

The therapy caps exceptions process applies an annual manual medical review (MMR) requirement when a beneficiary’s incurred expenses reaches a threshold of $3,700.  Each beneficiary’s incurred expenses apply towards the MMR thresholds in the same manner as it applies to the therapy caps. There’s one threshold for PT and SLP services combined and another threshold for OT services.  Now, through MACRA, not all claims exceeding the thresholds are subject to MMR as they were before. 

The MMR is currently in effect through December 31, 2017 for some claims over the $3,700 thresholds.  For a general overview of the medical review process, go to the Medical Review and Education website.  For more information on the MMR of therapy claims above the $3,700 thresholds, visit the Medical Review and Education website’s Therapy Cap section.

After extended advocacy by NASL and partners, the current manual medical review (MMR) of therapy claims above a $3,700 threshold is replaced with a targeted review program that provides the Secretary of Health & Human Services with discretion to use such factors as the Secretary determines to be appropriate. These may include providers with a higher denial percentage for therapy services and other providers in the same group or practice; providers who are new to Medicare or haven't provided therapy before; and therapy to treat certain types of medical conditions.


CMS Overview - CY13 Therapy $3,700 Threshold Process
General Information from CMS on the Therapy Cap & MMR

General Information on CMS’ Recovery Audit Program
MLN Article on CMS Program Integrity Contractors
Recovery Audit Contractors - FAQs

RAC Myths from CMS
Changes in ADR Limits for Medicare Providers (except suppliers and physicians) as of April 15, 2013
List of RACs by Region
Medicare Claims Appeals Basics & Background (PPT)

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