$2,480
KX threshold
CY2026 annual amount for OT, up from $2,410. Above it, attach KX to attest medical necessity.
Occupational Therapy Billing Services
Therapy-Cap Compliance Reset
The KX threshold and the CO modifier, working together
Here is the short answer. Medically necessary OT above the annual threshold still pays. You add the KX modifier once the patient crosses the CY2026 cap of $2,480, and you tag every minute an occupational therapy assistant delivered with the CO modifier, which pays those minutes at 85 percent. Get both flags right on the same line and the claim clears. Miss either one and it denies or overpays.
$3,000
Medical review threshold
Held at $3,000 for CY2026. Crossing it can trigger targeted medical review of documentation.
85%
OTA payment rate
CO minutes pay at 85 percent of the fee schedule, a 15 percent reduction, since Jan 1 2022.
10%
De minimis standard
CO applies when an OTA furnishes more than 10 percent of a given service.
Two flags, two questions
KX and CO never compete. They sit on the same line and answer different things.
KX
Is this still medically necessary above the cap?
- Triggered by the running annual total, not by who delivered care.
- Attach once the beneficiary passes $2,480 for the year in OT.
- Attests the record supports continued skilled therapy.
- No dollar reduction. It unlocks payment, it does not cut it.
CO
Who actually furnished these minutes?
- Triggered by the OTA delivering more than 10 percent of a service.
- Applies whether or not the patient is over the threshold.
- Pays that line at 85 percent, a fixed 15 percent reduction.
- Independent of KX. The two can and often do appear on one claim line.
One beneficiary, one year
Where the flags switch on as the annual total climbs
$0
Evaluation. No threshold modifier yet.
$2,480
KX threshold. Attach KX to every OT line from here up.
$3,000
Medical review threshold. Documentation may be pulled.
The CO modifier runs on a separate rail the whole way across. If an OTA delivered the minutes, CO rides that line at $0, at $2,480, and at $3,000 alike.
Line-level logic
The four-question pass that finishes every OT line
-
01
Running total over $2,480?
Check the beneficiary year-to-date OT dollars. If yes, this line needs KX.
-
02
Did an OTA furnish this service?
If an assistant delivered more than 10 percent of it, this line needs CO.
-
03
Both true on one line?
Then both flags go on the same line. KX for necessity, CO for the OTA rate. They do not cancel each other.
-
04
Documentation carries the KX?
The note must justify skilled care above the cap. KX is an attestation, and the record has to back it.
The 15 percent, in dollars
Same code, same threshold, different deliverer
Occupational therapist
100%
Full fee schedule allowance on the line. KX only, if over the cap.
Occupational therapy assistant
85%
Same code, 15 percent reduction under CO. KX still rides on top when over the cap.
Illustrative arithmetic, not a fee quote. On a line allowed at $100, the OTA-delivered version pays $85. The reduction is automatic once CO is present, so mis-tagging in either direction moves real money on every unit.
Archetype, illustrative
A mid-size OT clinic runs the reset
- KX added by memory, applied late and unevenly across therapists.
- OTA minutes billed at full rate, so CO went missing on shared visits.
- Over-cap lines denied for a missing KX, then re-worked by hand.
- No running year-to-date total surfaced at the point of charge entry.
- Year-to-date OT dollars visible before the note is signed, so KX fires on cue.
- OTA minute share checked against the 10 percent line, CO applied where it belongs.
- Both flags reconciled on the same claim line before submission, not after denial.
- Over-threshold documentation prompts built so the record can carry the KX attestation.
The mechanics above are an operator archetype, not a named client. The point holds anywhere. The threshold is not the enemy of medically necessary care. Sloppy flagging is.
Cited by name
The 2026 guidelines behind every number here
- CMS CY2026 Medicare Physician Fee Schedule Final Rule Sets the CY2026 KX modifier threshold at $2,480 for occupational therapy, updated annually by the Medicare Economic Index.
- CMS Therapy Services, KX Modifier Threshold guidance Defines the KX modifier as the attestation that services above the annual threshold are reasonable and necessary, with supporting documentation in the record.
- Targeted Medical Review threshold Held at $3,000 for CY2026. Claims above it may be selected for targeted medical review of the medical record.
- CO modifier and OTA payment reduction Services furnished in whole or in part by an occupational therapy assistant carry the CO modifier and pay at 85 percent of the fee schedule, a 15 percent reduction in effect since January 1, 2022, applied under the more than 10 percent de minimis standard.
This page is operational guidance for billing teams, not legal or coverage advice. Confirm current amounts against the CMS final rule and your MAC before you bill.
ASP-RCM Solutions, Occupational Therapy Billing Services
We build the threshold total into the charge, so KX and CO stop being a guess.
Our OT billing team surfaces year-to-date dollars at charge entry, checks OTA minute share against the de minimis line, and reconciles KX and CO on the same claim line before it leaves the building. Medically necessary care above the cap gets paid, and OTA lines get costed right the first time.
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