In 2025, the Medicare therapy threshold sits at $2,410 for physical therapy and speech-language pathology services combined. Once a patient’s cumulative Medicare therapy charges exceed this amount in a calendar year, you must append the KX modifier to every subsequent claim—or risk automatic denials.

For many physical therapy practices, the KX modifier represents a compliance anxiety point: Will Medicare deny my claims? Will I trigger an audit? Do I have enough documentation to support continued treatment?

The good news: The therapy threshold is not a hard cap. Medically necessary treatment beyond $2,410 is covered—as long as you document properly and use the KX modifier correctly.

This comprehensive guide explains the 2025 KX modifier threshold, the difference between a “soft cap” and the old “hard cap,” documentation requirements to support continued treatment, and strategies to avoid triggering Targeted Medical Review (TMR) audits.

What Is the Medicare Therapy Threshold?

The Medicare therapy threshold is a dollar amount set annually by CMS. When a beneficiary’s cumulative therapy charges reach this threshold within a calendar year, claims require additional documentation attestation via the KX modifier to justify continued treatment.

2025 Therapy Threshold: $2,410

For calendar year 2025:

  • Physical Therapy + Speech-Language Pathology combined: $2,410 threshold
  • Occupational Therapy (separate): $2,410 threshold

Important: PT and SLP share one threshold, while OT has its own separate threshold.

Example:

  • Patient receives $1,800 in PT services
  • Patient receives $700 in SLP services
  • Combined total: $2,500 (exceeds $2,410 PT/SLP threshold)
  • KX modifier required for all PT and SLP services beyond $2,410

Historical Context: From Hard Cap to Soft Cap

Understanding the current threshold requires knowing its history.

1997-2005: Therapy Caps Introduced

  • Balanced Budget Act of 1997 established annual dollar limits ($1,500) on therapy services
  • These were hard caps—once reached, Medicare stopped paying entirely

2006-2017: Exceptions Process

  • Congress repeatedly suspended or modified caps
  • “Exceptions process” allowed treatment beyond caps with additional paperwork

2018-Present: Permanent Repeal with Threshold

  • Bipartisan Budget Act of 2018 permanently repealed therapy caps
  • Replaced with therapy threshold system (soft cap)
  • Medicare doesn’t deny claims at the threshold—but requires KX modifier attestation and may trigger medical review

Key difference:

  • Hard cap (pre-2018): Claims denied automatically once cap reached
  • Soft cap / Threshold (2018-present): Claims continue with KX modifier; subject to potential medical review

What Is the KX Modifier?

The KX modifier is a billing modifier that attests that services exceeding the therapy threshold are medically necessary and that documentation in the patient’s medical record supports continued treatment.

When to Use the KX Modifier

You must append the KX modifier to therapy claim lines when:

  1. The beneficiary’s cumulative therapy charges for the calendar year have reached or exceeded the threshold ($2,410 for PT/SLP combined)
  2. You are billing for services at or above the threshold amount
  3. You have documentation in the medical record supporting medical necessity for continued treatment

Example scenario:

  • Patient’s cumulative 2025 PT charges: $2,350
  • Today’s PT visit charges: $120 (2 units therapeutic exercise + 1 unit manual therapy)
  • New cumulative total: $2,470
  • KX modifier required: Today’s claim brings patient over the $2,410 threshold

How to apply:

  • Add -KX to each CPT code on the claim
  • Example: 97110-KX, 97140-KX

What Happens If You Don’t Use the KX Modifier?

Automatic claim denial.

If a patient has exceeded the threshold and you submit a claim without the KX modifier, Medicare will deny the claim with a reason code indicating missing modifier.

Correction process:

  • Review medical record to verify documentation supports continued treatment
  • Resubmit claim with KX modifier appended

Prevention: Modern EMR systems like Proactive Chart automatically track cumulative therapy charges and alert you when patients approach the threshold, prompting KX modifier usage. Learn more about accurate billing with the 8-minute rule to ensure proper charge calculations.

Documentation Requirements to Support the KX Modifier

The KX modifier is an attestation that your documentation justifies continued treatment. You don’t submit documentation with the claim, but you must have it in the medical record in case of audit or medical review.

What Documentation Must Demonstrate

To support the KX modifier, your clinical notes must show:

  1. Continued medical necessity for skilled physical therapy

    • Patient condition requires skilled intervention beyond what could be provided by non-skilled caregivers or through self-management

  2. Expectation of additional functional improvement

    • Patient is making measurable progress toward functional goals
    • OR patient’s condition is expected to improve with continued skilled treatment (e.g., post-surgical patient still in recovery phase)

  3. Complexity justifying extended treatment

    • Patient has comorbidities, complications, or factors requiring longer rehabilitation course
    • Standard treatment protocols don’t apply due to patient-specific circumstances

  4. Specific, measurable goals with realistic timelines

    • Clear functional goals (not vague statements like “improve function”)
    • Timeline for achieving goals and discharge plan

Required Documentation Elements

Updated Goals:

  • Review and update goals at least every 10 visits or 30 days (whichever comes first)
  • Use objective, measurable criteria (ROM degrees, strength grades, functional distances, timed tests)

Example (Good):

“Patient goal: Independent stair climbing (12 steps) with single-point cane and without rest breaks within 4 weeks. Current status: Requires bilateral handrail support and 1 rest break after 8 steps. Knee flexion ROM improved from 95° to 110° over past 2 weeks, progressing toward goal of 120° for functional stair clearance.”

Example (Poor—Will Not Support KX):

“Patient continues to improve with physical therapy. Will continue current treatment plan.”

Objective Progress Measurements:

  • Document specific measurements at regular intervals
  • Demonstrate progress trend, even if incremental

Example (Good):

“Knee ROM progress: Initial eval 85° flexion → Week 2: 95° → Week 4: 110° → Week 6: 118°. Patient demonstrates consistent weekly improvement of 4-6° despite post-operative scar tissue limitations.”

Justification for Skilled Services:

  • Explain why continued PT is necessary vs. home exercise program alone

Example (Good):

“Patient requires continued skilled PT for: (1) Manual therapy to address adhesions limiting ROM despite HEP compliance, (2) Progressive resistance training requiring frequent modification based on post-op healing status, (3) Neuromuscular re-education for persistent quad lag requiring tactile cueing and biofeedback, (4) Gait training with assistive device progression requiring safety assessment and clinical judgment.”

Expected Timeline for Discharge:

  • Provide realistic discharge timeline

Example (Good):

“Patient anticipated to achieve independence with ADLs and stair climbing within 4-6 additional weeks (12-15 visits) based on current rate of progress. Discharge plan: transition to home exercise maintenance program with 1-month follow-up.”

Complicating Factors (When Applicable):

  • Document factors extending treatment course beyond typical protocols

Example (Good):

“Patient’s diabetes and obesity complicate post-operative healing. Wound healing delayed by 3 weeks compared to typical TKA timeline. PT progression adjusted to accommodate slower tissue healing and increased fall risk due to peripheral neuropathy.”

Documentation Red Flags That Won’t Support KX Modifier

Red Flag #1: Maintenance/Plateau Language

  • ❌ “Patient is maintaining current functional level.”
  • ❌ “No significant changes since last visit.”
  • ❌ “Continue current treatment plan.”

What auditors see: If the patient has plateaued or is only maintaining (not improving), Medicare considers this maintenance therapy—not covered.

Red Flag #2: Vague or Non-Specific Goals

  • ❌ “Improve strength and ROM.”
  • ❌ “Reduce pain and increase function.”
  • ❌ “Return to prior level of function.”

What auditors see: No measurable criteria to determine medical necessity or progress.

Red Flag #3: Lack of Skilled Service Justification

  • ❌ “Patient performed exercises independently while therapist documented.”
  • ❌ “Patient completed same HEP exercises during clinic visit.”

What auditors see: Services could be performed through home exercise program; no skilled intervention documented.

Red Flag #4: Inconsistent Functional Limitations

  • ❌ “Patient reports severe pain and inability to ambulate” (but prior note states “ambulated 500 feet independently”)

What auditors see: Documentation inconsistencies trigger deeper review.

The Medical Review Threshold: $3,000

In addition to the $2,410 KX modifier threshold, CMS established a Medical Review Threshold at $3,000 (remaining at this level through 2027).

What Is the Medical Review Threshold?

Once a patient’s cumulative therapy charges exceed $3,000 in a calendar year, claims may be subject to Targeted Medical Review (TMR) by Medicare Administrative Contractors (MACs).

Important distinction:

  • $2,410 threshold: KX modifier required, but claims are not automatically reviewed
  • $3,000 threshold: Claims may be selected for manual medical review (chart audit)

TMR selection criteria:

  • Not all claims over $3,000 are reviewed (MAC uses sampling methodology)
  • High-utilization providers (practices with many patients exceeding $3,000) have higher review likelihood
  • Claims showing documentation red flags are more likely to be selected

What Happens During a Medical Review?

Process:

  1. MAC selects claim for review (typically after payment is made)
  2. MAC requests full medical records for the patient’s episode of care
  3. Reviewer (typically a licensed PT or OT) evaluates documentation to determine if services were medically necessary
  4. MAC issues determination: Claim upheld, partially denied, or fully denied

Potential outcomes:

  • Upheld: No action; payment retained
  • Partially denied: MAC determines some visits were not medically necessary; recoupment (you must repay Medicare for disallowed visits)
  • Fully denied: Entire episode deemed not medically necessary; full recoupment required

Appeals process:

  • You have the right to appeal MAC determinations
  • Appeal success depends on strength of documentation

How to Avoid Triggering Medical Review

Strategy #1: Conservative Treatment Estimates

  • Avoid overly optimistic discharge timelines (e.g., “patient needs 40 more visits”)
  • Re-evaluate every 10 visits with updated prognosis

Strategy #2: Benchmark Against National Utilization

  • Most common PT diagnoses average 8-12 visits
  • Complex post-operative cases average 15-24 visits
  • If your utilization is significantly higher than averages for similar diagnoses, documentation must clearly justify

Strategy #3: Avoid Practice-Wide Patterns

  • MACs flag practices where every patient receives extended treatment (e.g., all patients receive exactly 24 visits)
  • Demonstrate individualized care with varying treatment durations based on patient response

Strategy #4: Discharge Proactively

  • When patient reaches functional plateau or achieves goals, discharge promptly
  • Continuing treatment beyond plateau solely to “maintain” function is not covered

Proactive Chart’s KX Modifier Tracking

Managing therapy thresholds manually is error-prone. Proactive Chart automates the process:

✅ Real-time threshold tracking - Dashboard shows each patient’s cumulative Medicare therapy charges ✅ Automatic KX modifier application - When patient exceeds $2,410, system automatically appends KX modifier to claims ✅ Documentation prompts - Alerts you to update goals, document progress, and justify continued treatment when approaching threshold ✅ Medical review risk score - Flags patients approaching $3,000 threshold and suggests documentation enhancements ✅ Audit-ready reports - Generates summary of patient progress and skilled service justification for medical review defense

Example alert:

“Patient Sarah Johnson has reached $2,275 in PT charges (93% of threshold). Today’s visit will exceed $2,410. KX modifier will be automatically applied. Documentation reminder: Update goals and document progress to support medical necessity.”

KX Modifier Billing Examples

Example 1: First Visit Exceeding Threshold

Patient background:

  • Cumulative 2025 PT charges: $2,350
  • Today’s visit: 97163 (PT evaluation, high complexity) = $170.04

Billing:

  • Today’s visit brings cumulative total to $2,520.04
  • Exceeds threshold by $110.04
  • Apply KX modifier to evaluation code: 97163-KX

Documentation must include:

  • New goals with objective measures and timeline
  • Justification for continued skilled PT
  • Expected discharge timeline

Example 2: Ongoing Treatment Beyond Threshold

Patient background:

  • Cumulative 2025 PT charges: $2,650
  • Today’s visit: 97110 (2 units) + 97112 (1 unit) + 97140 (1 unit) = $116.89

Billing:

  • Patient already over threshold
  • Apply KX modifier to all CPT codes: 97110-KX (×2 units), 97112-KX, 97140-KX

Documentation must include:

  • Continued progress toward goals (objective measurements)
  • Skilled service justification for each intervention
  • Reassessment of prognosis and discharge timeline

Example 3: PT and SLP Combined Threshold

Patient background:

  • 2025 PT charges: $1,900
  • 2025 SLP charges: $600
  • Combined total: $2,500 (exceeds $2,410 threshold)
  • Today: PT visit for $95

Billing:

  • PT claim requires KX modifier: 97110-KX, 97140-KX
  • SLP claims also require KX modifier (shared threshold)

Note: PT and SLP must coordinate to track shared threshold—both providers need to append KX modifier once combined charges exceed $2,410.

Common KX Modifier Questions

Q: Do I need to submit special documentation with KX modifier claims?

A: No. The KX modifier is an attestation that documentation exists in the medical record. You don’t submit additional paperwork with the claim. However, you must have documentation ready in case of audit or medical review.

Q: Can I use the KX modifier preemptively?

A: No. Only apply the KX modifier once the patient has actually reached or exceeded the $2,410 threshold. Applying it prematurely may confuse claims processing.

Q: What if my documentation isn’t strong enough to support continued treatment?

A: If your documentation doesn’t support medical necessity, you should not use the KX modifier. Instead:

  • Discharge the patient if functional goals are met or plateau reached
  • Transition to maintenance/wellness program (not covered by Medicare; cash-pay or patient responsibility)

Billing with the KX modifier when documentation doesn’t support continued treatment is considered fraudulent.

Q: Does the threshold reset each calendar year?

A: Yes. On January 1 each year, the cumulative therapy charge counter resets to $0 for each beneficiary. You start fresh with a new $2,410 threshold.

Q: What if the patient changes providers mid-year?

A: The threshold follows the beneficiary, not the provider. If a patient transfers from another PT practice mid-year, their cumulative therapy charges carry over. Check with Medicare to determine the patient’s current cumulative charges.

Proactive Chart feature: Queries Medicare eligibility system to retrieve patient’s year-to-date therapy charges when scheduling new patients.

Q: Can I bill beyond the threshold if the patient has secondary insurance?

A: The KX modifier is specific to Medicare. Secondary insurance policies have their own rules regarding therapy limits (some have visit limits, dollar limits, or no limits). The KX modifier only affects the Medicare portion of the claim.

Q: What is the “de minimis” standard?

A: The 10% de minimis rule applies to the therapy threshold: Services furnished by the treating therapist (not an assistant) can include up to 10% of service time by an assistant without requiring assistant modifiers (CQ/CO). This is separate from the KX modifier requirement.

Cost-Benefit Analysis: Treating Patients Beyond the Threshold

Should you continue treating patients who exceed the threshold?

Financial Considerations

Arguments for continuing treatment:

  • Medicare does pay for medically necessary services beyond $2,410
  • Patient outcomes and satisfaction improve with adequate treatment duration
  • Discharging prematurely risks poor outcomes, re-injury, and readmission

Arguments for conservative discharge:

  • Documentation burden increases for high-threshold patients
  • Medical review risk increases above $3,000
  • Recoupment risk if documentation deemed insufficient
  • Time spent on chart audit defense is unpaid

Balanced approach:

  • Continue treatment when clinically indicated and documentation is strong
  • Discharge when functional plateau reached or goals achieved
  • Avoid extending treatment unnecessarily solely to maximize revenue

Risk Mitigation Strategies

For patients likely to exceed $3,000:

  • Conduct interim progress reviews at $2,500, $2,750, and $2,900
  • Document progress comprehensively at each review
  • Consider requesting peer review from another PT to assess medical necessity
  • Prepare audit defense documentation package (progress summaries, goal achievement charts, functional outcome measures)

Defensible Documentation Templates

Template 1: KX Modifier Attestation Note (Initial Threshold Breach)

Therapy Threshold Documentation (KX Modifier Attestation)

Patient [Name] has reached the 2025 Medicare therapy threshold ($2,410). As of today’s visit, cumulative PT charges: $[amount].

Medical Necessity for Continued Treatment: Patient’s current functional deficits require continued skilled physical therapy services. Patient is demonstrating consistent progress toward functional goals and has not reached a functional plateau.

Current Functional Limitations: [List specific functional limitations—e.g., “Unable to climb full flight of stairs independently; requires bilateral handrail support and 2 rest breaks”]

Objective Progress Indicators: [Provide measurable improvements—e.g., “ROM: Shoulder flexion improved from 110° (initial eval) to 145° (current); Strength: Rotator cuff strength improved from 3/5 to 4/5; Function: Can now reach overhead shelf (previously unable)”]

Updated Goals:

  1. [Specific, measurable goal with timeline—e.g., “Independent stair climbing (12 steps) without assistive device within 4 weeks”]
  2. [Additional goals]

Skilled Services Required: Patient requires ongoing skilled PT for: [Explain—e.g., “Manual therapy to address capsular restrictions limiting ROM; progressive strengthening requiring clinical judgment for post-operative protocol advancement; neuromuscular re-education for scapular dyskinesis”]

Expected Discharge Timeline: Anticipated discharge within [timeframe] ([number] additional visits) based on current rate of progress. Discharge criteria: [Specific functional achievements required for discharge]

Complexity Factors: [If applicable—e.g., “Patient’s diabetes and obesity complicate healing process, extending typical post-operative timeline”]

I attest that services exceeding the therapy threshold are medically necessary and supported by documentation in this medical record.

[Treating PT Signature, Date]

Template 2: Progress Note for Patient Beyond $3,000 Threshold

Progress Review - Medical Review Threshold Reached

Patient [Name] has exceeded $3,000 in cumulative Medicare PT charges (current total: $[amount]).

Summary of Progress Since Initial Evaluation: [Provide comprehensive summary showing clear progression—use table format if possible]

MeasureInitial EvalCurrentGoal
Knee Flexion ROM85°118°125°
Quad Strength3/54+/55/5
Gait Distance100 ft w/ walker500 ft w/ caneCommunity ambulation
Stair ClimbingUnable8 steps w/ rail12 steps independent

Clinical Justification for Extended Treatment Course: [Explain why patient requires more visits than typical—e.g., “Patient experienced post-operative infection requiring 2-week delay in PT progression. Additional 6 visits required to compensate for delayed rehabilitation timeline. Patient is currently progressing appropriately and expected to achieve discharge goals within 3 additional weeks.”]

Skilled Services Justification: Patient continues to require skilled PT intervention beyond home exercise program due to: [Specific skilled needs]

Anticipated Discharge Date: Projected discharge: [Date] ([number] additional visits). Patient will transition to independent HEP with 1-month follow-up to assess maintenance.

This extended treatment course is medically necessary and supported by objective progress indicators documented throughout care.

[Treating PT Signature, Date]

Conclusion: The KX Modifier Is Not Scary—If You Document Well

The 2025 therapy threshold of $2,410 is not a hard stop—it’s a documentation checkpoint. Medicare will continue paying for medically necessary physical therapy beyond this threshold, provided you:

  1. Append the KX modifier to claims once the threshold is reached
  2. Document objective progress toward functional goals
  3. Justify skilled service necessity for continued treatment
  4. Update goals and prognosis regularly
  5. Prepare for potential medical review if exceeding $3,000

Key takeaways:

  • $2,410 threshold: KX modifier required; claims paid with proper documentation
  • $3,000 threshold: Medical review possible; ensure documentation is audit-ready
  • Documentation is everything: Objective measures, progress trends, skilled service justification
  • Automation prevents errors: Modern EMR systems track thresholds and prompt for KX modifier

Ready to eliminate threshold tracking stress and ensure KX modifier compliance? Learn how Proactive Chart automates therapy threshold management and protects you from audit risk. Schedule a demo today.

References:

  • Centers for Medicare & Medicaid Services. (2025). Therapy Services Billing Guidelines. CMS.gov/Medicare/Billing/TherapyServices.
  • Centers for Medicare & Medicaid Services. (2024). Medicare Physician Fee Schedule Final Rule CY 2025. Federal Register.
  • American Physical Therapy Association. (2025). Medicare Payment Thresholds for Outpatient Therapy Services. APTA.org.
  • Noridian Healthcare Solutions. (2025). Per-Beneficiary KX Modifier Thresholds. Noridian Medicare JF Part B.

Disclaimer: Therapy threshold policies are subject to annual updates. This article reflects 2025 guidelines. Always consult current CMS resources and qualified billing specialists for practice-specific advice. Documentation requirements may vary by Medicare Administrative Contractor (MAC).