Navigating the KX Modifier Threshold Increase

For physical therapists who serve Medicare patients, staying on top of annual policy changes is essential—not just for compliance, but for the financial health of your practice. One such critical update for 2025 is the increase in the KX modifier threshold for therapy services.

While this might sound like just another line item in a billing manual, understanding and properly applying the KX modifier can make the difference between getting paid—and getting denied.

As a medical billing company committed to helping physical therapy practices thrive, we’re here to break it down for you.

📈 What Is the KX Modifier Threshold?

The KX modifier is used on Medicare claims to indicate that services beyond a specific dollar amount are medically necessary. It’s a signal to Medicare that the patient requires continued therapy—even though their total annual costs have exceeded the established limit.

In 2025, the threshold for combined physical therapy and speech-language pathology services is $2,410. This is up from $2,230 in 2024, reflecting inflation adjustments and healthcare cost trends.

🚨 What Happens When a Patient Reaches the Threshold?

Once a patient’s combined physical therapy and speech-language pathology services exceed $2,410, you must include the KX modifier on all applicable CPT codes to continue receiving reimbursement.

Without this modifier, your claim will likely be denied, regardless of medical necessity.

📝 When Should You Use the KX Modifier?

The KX modifier should only be used when documentation supports the ongoing medical necessity of treatment. Here are key points to keep in mind:

• Track cumulative costs throughout the calendar year to know when a patient is approaching the threshold.

• Document thoroughly why additional services are still necessary—tie your notes directly to functional goals.

• Only use the KX modifier when the patient continues to show progress or has a compelling reason to maintain services (e.g., risk of regression).

🔍 Example: A Medicare patient receives therapy after a hip replacement and improves but still requires help with mobility and balance to reduce fall risk. Once their services exceed $2,410, you continue therapy and append the KX modifier with detailed documentation.

📌 Coding & Billing Tips for Using the KX Modifier

1. Include the KX modifier on each line item of the claim that applies to services above the threshold.

2. Do not use the KX modifier prematurely. Only start applying it after the threshold is exceeded.

3. Watch for targeted medical review triggers. While there’s no hard cap, services significantly above the threshold may be reviewed for overuse.

Working with a billing partner who tracks thresholds and audits documentation can prevent mistakes and revenue loss.

⏳ What About the Soft Cap or “Manual Review” Limit?

While the KX threshold is not a hard cap, there’s another number to be aware of: the manual medical review threshold, which remains at $3,000 for PT and SLP combined.

Once your services exceed this amount, Medicare contractors may review your documentation to determine if continued therapy is justified. Again, solid clinical notes and clear treatment plans are your best defense.

💬 How We Help Physical Therapists Stay Compliant

Tracking cumulative therapy costs, applying modifiers correctly, and documenting thoroughly—it’s a lot to manage when your focus is on patient care.

That’s where we come in.

As a medical billing company specializing in physical therapy practices, we help you:

• Monitor patient thresholds in real-time

• Alert you when modifier use is required

• Ensure compliant documentation before claims go out

• Reduce denials and delays in payment

✅ Final Thoughts

The increase in the KX modifier threshold is good news for physical therapists and patients—it allows more flexibility for continued care. But with that flexibility comes responsibility.

Using the KX modifier correctly not only protects your revenue but ensures that your patients continue to get the care they need.

Need help managing your Medicare billing processes?
We offer end-to-end billing services tailored to physical therapy practices. Contact us today for a free revenue assessment or to talk about how we can support your growth.