The 2026 therapy threshold, in real dollars.
A calculator-style walkthrough of the moment cumulative OT charges cross the KX threshold and, higher up, the $3,000 targeted medical review line. So your therapists append KX for the right reason, not out of reflex.
Append the KX modifier only when a beneficiary's cumulative outpatient OT charges for the calendar year pass the annual KX threshold and the care remains reasonable, necessary, and documented. KX is an attestation of medical necessity above the threshold, not a box you tick on every claim. Cross the higher $3,000 line and KX is still required, but a share of those claims can be pulled for targeted medical review, so the note has to stand on its own.
Decision panel
Move the slider to where this patient sits today
Enter the beneficiary's year-to-date allowed OT charges and confirm your practice's current KX threshold. The panel tells you which of the three billing bands you are in and what it means for the claim in front of you.
OT KX & Medical Review Band Finder
Per beneficiary · per calendar year · OT onlyDo not append KX yet
Cumulative OT charges are still under the annual KX threshold. Bill normally. Appending KX here adds an attestation you do not yet need.
The three numbers that govern the claim
One discipline, two thresholds, one payment rule
The KX modifier threshold
Once a beneficiary's cumulative OT charges pass this annual, MEI-indexed amount, every therapy line above it carries KX to attest continued medical necessity. OT has its own threshold; PT and SLP share a separate combined one.
Attestation, not a capTargeted medical review threshold
Held in place by statute through CY2027. Crossing it does not stop payment. It flags the claim as eligible for a contractor to pull a targeted sample and verify the documentation supports the care.
Held through 2027CO assistant modifier reduction
OT services furnished in whole or in part by an occupational therapy assistant carry the CO modifier and pay at 85% of the fee schedule amount. It applies when the OTA independently furnishes more than the 10% de minimis share.
CO · 15% reductionWorked example
Where a real plan of care crosses the line
Maple Grove Occupational Therapy, a four-therapist outpatient clinic (archetype, not a client), treats a Medicare patient recovering from a distal radius fracture. Charges accumulate visit by visit. The KX threshold is crossed mid-plan, and every line from that point forward needs the modifier.
The other 2026 lever
What the CO modifier does to the same line
The KX threshold decides whether you get paid past the line. The CO modifier decides how much. When an OTA furnishes the service beyond the 10% de minimis share, that line is paid at 85% of the fee schedule amount. Values below are illustrative arithmetic on a round $100 base.
Why the reason matters
Reflex KX versus right-reason KX
KX by reflex
- Appended to every therapy line regardless of cumulative total
- Attests necessity the note does not actually support
- Masks whether a patient is genuinely near the threshold
- Turns the attestation into noise that invites scrutiny
- Leaves the practice exposed if a claim is pulled for review
KX for the right reason
- Applied once cumulative charges truly cross the threshold
- Backed by a plan of care that shows continued benefit
- Documentation re-justifies medical necessity each visit
- Ready for targeted review the moment charges near $3,000
- Keeps the modifier meaningful and the claim defensible
The guidelines behind this
Every number here traces to a named rule
- 01Calendar Year 2026 Medicare Physician Fee Schedule final rule (CMS PFS, CY2026).
Confirms the annual therapy KX modifier threshold and its update through the Medicare Economic Index for the year.
- 02Section 1833(g) of the Social Security Act.
Establishes the outpatient therapy expenditure thresholds and the KX modifier exceptions process for medically necessary services above them.
- 03Bipartisan Budget Act of 2018 (Public Law 115-123), Sections 50202 & 53107.
Permanently repealed the therapy caps while retaining the KX threshold, set the $3,000 targeted medical review threshold through CY2027, and directed the OTA/PTA payment differential.
- 04Medicare Claims Processing Manual, Chapter 5 (Part B Outpatient Rehabilitation and CORF/OPT Services).
Operational detail on applying the KX modifier, the CO and CQ assistant modifiers, and the 10% de minimis standard.
Your therapists should treat. Let the threshold logic run itself.
ASP-RCM builds the KX threshold, the $3,000 review line, and the CO reduction into the claim edits and documentation prompts before a line ever goes out. So the modifier lands for the right reason, the note is ready if a claim is pulled, and no clean OT dollar is lost to reflex coding or a missed 85% flag.
Talk to our OT billing teamEducational summary of Medicare policy, not billing or legal advice. Confirm current-year threshold amounts against the CY2026 Physician Fee Schedule final rule and your MAC's guidance before you file.
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