The AAFP calculates it as payments, net of credits, divided by charges net of approved contractual adjustments for the selected time frame. MGMA calls it the adjusted fee-for-service collection percentage, also known as the net collection percentage: net fee-for-service revenue divided by adjusted fee-for-service charges. AAOE’s version is net collections divided by net charges. | ||
|---|---|---|
Why it matters in orthopedics
Practices with in-house physical or occupational therapy, and those that dispense braces as DMEPOS suppliers, append KX routinely. In both settings it is an attestation: you are telling Medicare the medical record supports coverage. A missing KX can stop payment, and an unsupported KX can turn into an overpayment on review.
How it works
Context | When to append KX | If the criteria are not met |
|---|---|---|
Outpatient PT, speech-language pathology and OT | Once the patient’s calendar-year total passes the KX threshold and continued therapy is medically necessary and documented | Claims above the threshold without KX are denied; give an ABN for therapy that is not medically necessary |
Knee orthoses (LCD L33318, policy article A52465) | On base and addition codes only when all LCD coverage criteria are met | Use GA with a valid ABN or GZ without one; lines with no KX, GA or GZ are rejected |
For therapy, the CY 2026 threshold is $2,480 for PT and speech-language pathology combined and a separate $2,480 for OT. Claims above $3,000 can be selected for targeted medical review, a threshold that stays in place through CY 2027. The CY 2027 proposed rule would raise the KX threshold to $2,540, pending the final rule; see our CY 2027 Physician Fee Schedule overview.
For knee orthoses, LCD L33318 was revised for dates of service on or after January 25, 2026. It now covers prefabricated single- or double-upright knee orthoses with adjustable joints and varus or valgus adjustment (L1843, L1845, L1851, L1852) for ambulatory patients with medial or lateral tibiofemoral osteoarthritis that causes pain or reduced mobility or function, who are willing to use the brace. Other covered indications include documented knee instability and a recent knee injury or surgery.
Orthopedic example
After a total knee replacement, a patient’s Medicare-allowed PT and speech-language pathology total for 2026 passes $2,480. The therapist documents continued functional gains and an updated plan of care, so later claim lines carry KX. Separately, a patient with medial compartment osteoarthritis receives an off-the-shelf unloader brace (L1851); the record documents ambulation, arthritis-related pain, the brace’s varus or valgus adjustment and the patient’s willingness to wear it, so the supplier appends KX.
Common denial triggers
Therapy lines above the threshold are billed without KX.
KX is appended without documentation that supports medical necessity, which surfaces on medical review.
Brace lines carry none of KX, GA or GZ and are rejected as missing information.
A custom-fabricated orthosis is billed without documenting why a prefabricated one won’t work.
The supplier bills before receiving a standard written order, or bills bilateral braces without separate RT and LT lines. See our review of common orthopedic claim denials for related patterns.
How to prevent or fix
Track each patient’s accrued therapy amount; because the threshold is a per-beneficiary annual amount, therapy from other providers may already count toward it. Update thresholds every January. Build brace documentation templates from the LCD criteria. When therapy or bracing won’t meet the criteria and the patient still wants it, give an Advance Beneficiary Notice and bill with GA. Correct and resubmit rejected lines. Workers’ compensation and commercial payers set their own modifier rules, so don’t append KX on those claims by default.
Frequently asked questions
Does the KX modifier guarantee payment?
No. KX is your attestation that the medical record supports coverage under the applicable Medicare policy. Medicare can still review the claim, and therapy claims above $3,000 in a year can be selected for targeted medical review. If the documentation doesn’t support the services, Medicare can deny the claim or recover the payment, so every KX line should match a documented plan of care or the LCD’s coverage criteria.
What is the therapy KX threshold for 2027?
CMS has proposed $2,540 for CY 2027, for PT and speech-language pathology combined and separately for OT, up from $2,480 in CY 2026. The figure comes from the CY 2027 Physician Fee Schedule proposed rule, which applies a 2.5% Medicare Economic Index increase and rounds to the nearest $10. CMS plans to update the figure with newer index data in the final rule, so confirm the amount before January 1, 2027.
When should a brace claim carry GA or GZ instead of KX?
Use GA or GZ when the knee orthosis does not meet every coverage criterion in LCD L33318. Append GA when you gave the patient a valid Advance Beneficiary Notice before delivery, and GZ when you did not. Policy article A52465 says knee orthosis lines billed without KX, GA or GZ are rejected as missing information, so every base and addition code line needs one of the three.
Guides that cover this term
CY2027 Medicare Physician Fee Schedule: What It Means for Orthopedic Practices
CMS’s proposed 2027 fee schedule cuts the conversion factor, joint replacement RVUs and same-day E/M pay. What orthopedic practices should do now.
→
The Most Common Orthopedic Claim Denials in 2026, and How to Prevent Them
Ten orthopedic denial types, the CARCs behind them, their root causes and how to prevent them, plus when to appeal or correct and resubmit.
→
Related terms
Sources
Therapy Services — CMS, accessed October 14, 2026
Medicare Physician Fee Schedule Final Rule Summary: CY 2026 (MM14315) — CMS MLN Matters, December 9, 2025
Medicare and Medicaid Programs; CY 2027 Payment Policies Under the Physician Fee Schedule (CMS-1848-P), 91 FR 43842 — Federal Register, July 16, 2026
LCD L33318 Knee Orthoses — DME MACs via CMS Medicare Coverage Database, revision effective January 25, 2026
LCD Reference Article A52465 Knee Orthoses - Policy Article — DME MACs via CMS Medicare Coverage Database, revision effective January 25, 2026
This entry is educational and is not legal, coding-compliance or billing advice. Payer rules change often, so confirm requirements with the payer before you bill. CPT® is a registered trademark of the American Medical Association; code descriptions here are Rette’s plain-language summaries.