Therapy Cap

March 1, 2007

CMS has established new requirements for supplies and providers of durable medical equipment, prosthetics, ORTHOTICS and supplies (DMEPOS). These requirements will likely affect your facility unless you work in a hospital setting. Please click here to view the information.

Washington Update: January 3, 2006
Therapy Cap Fix Postponed

Budget Reconciliation legislation was complicated in the Senate as a parliamentarian maneuver by Democrats struck three provisions of the legislation before passage. This changed the bill from the House passed bill so the House will be required to vote on the Senate passed measure.  They are expected to approve it. Unfortunately, the House recessed for 2005 and is not planning on reconvening until January 31, 2006. On January 1, 2006, the Medicare cap on outpatient therapy services went into effect, as legislation has not been enacted to stop it, subsequently limiting coverage to $1,740.

The House is expected to address this legislation when it returns on January 31 and the President should sign the bill into law shortly thereafter. Provisions allowing an exemption from the therapy cap are still anticipated to take effect retroactively beginning January 1, 2006.

In terms of the outpatient therapy cap, the FY 2006 Budget Reconciliation allows for the following:

• Creates a process (by the Secretary of Health and Human Services) in which individuals enrolled in Medicare may request an exemption from the dollar limitation of the therapy cap. If the Secretary does not respond within 10 business days of receiving the request, it will be considered approved as medically necessary.
   
• The implementation of clinically appropriate code edits to identify and eliminate improper payments for therapy services.

The ASHT government relations team will update you as more information becomes available and will alert you when the Center for Medicare and Medicaid Services (CMS) has established the procedure for exemption from the therapy cap. We are currently in contact with CMS to ensure the process will be the least disruptive for your patients and your practice.

On February 8, 2006, President Bush signed the “Deficit Reduction Act of 2005” into law, stating that “the Act reduces unnecessary spending of taxpayer dollars,” and reflects “a commitment to fiscal responsibility.” As you probably remember, the Senate approved the FY 2006 Budget Reconciliation Conference Report in December before winter recess. The House, however, was forced to vote again on the bill after the Senate made minor changes to the language. The House finally passed the FY 2006 Budget Reconciliation on February 1, with a 216 to 214 vote, largely along party lines.

The bill contains a legislative victory for the therapy community, as provisions implement a program that allows exceptions to the outpatient therapy cap for 2006. The bill:

• Creates a process (by the Secretary of Health and Human Services) in which beneficiaries enrolled in Medicare may request an exemption from the $1,740 (approximate) dollar limitation for outpatient therapy services.
• Services deemed medically necessary will be reimbursed.
• The approval is passive. If the Secretary does not respond that the service is not medically necessary within 10 business days of receiving the request, the care can be provided.
• Implements clinically appropriate code edits to identify and eliminate improper payments for therapy services.

Shortly after the President signed the “Deficit Reduction Act” into law, the Centers for Medicare and Medicaid (CMS) released a fact sheet establishing the therapy cap exception process. This process can be viewed on the CMS website here: http://www.cms.hhs.gov/apps/media/press/release.asp?Counter=1782

While this outcome is a victory for the therapy community, a permanent fix will still be needed in 2007. Fortunately, two members of Congress, one member of the House and one from the Senate, have taken up the call to permanently fix the therapy cap. Last year, both H.R. 1125, introduced by Representative English (R-PA) and S.1024, introduced by Senator Ensign (R-NV), sought to repeal the Medicare caps on outpatient rehabilitation therapy. This year Representative English and Senator Ensign have reintroduced this legislation as H.R. 916 and S.438 with the same goal in mind. Although the Budget Reconciliation has postponed the $1,740 cap, a permanent fix remains a priority for ASHT.

ASHT's Position:   Support the legislation and repeal the cap.

For more information about H.R. 916 and S.438 please CLICK HERE.

Direct Access

Last year, H.R. 792 and S. 493, the "Medicare Patient Access to Physical Therapists Act of 2003," were aimed at amending Medicare in order to authorize qualified physical therapists to provide services for Medicare beneficiaries without the requirement of a "primary care" physician referral. Both pieces of legislation, however, preserve the existing law that requires Medicare beneficiaries to obtain a physician referral before seeking the care of an occupational therapist. This legislation has been reintroduced in the House of Representatives by Representative Hart (R-PA) as H.R. 1333 and in the Senate by Senator Lincoln (D-AR) as S. 647.

ASHT's Position:   No formal position, although currently ASHT is carefully considering its stance on this issue.

For more information about H.R. 1333 and S. 647 please CLICK HERE.

Competitive Bidding on Durable Medical Equipment (DME)

Section 302 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, authorizes the Secretary to utilize a competitive acquisition authority, and requires Medicare to replace the current DME payment methodology for certain items with a competitive acquisition process. This new bidding process will establish payment amounts for certain DME, enteral nutrition, and off the shelf orthotics. Additionally, CMS will implement a competitive bidding program in July 2006 to allow Medicare providers to purchase certain drugs at market prices. In 2007, CMS will expand the use of competitive bidding to the purchase of durable medical equipment (DME) and supplies.

Although Representative Hobson (R-OH) and Representative McCarthy (D-NY) introduced legislation in 2004 that would repeal the reduction in Medicare payment for certain items of DME, there has been no new legislation introduced in the 109th Congress.

ASHT's Position:   Oppose the CMS regulation which allows less qualified individuals to provide DME to patients, and which may cause delay in treatments due to the necessity of a bidding process. Support legislation to repeal the reduction in Medicare reimbursement for DME.

HCPCS: Code Revision/Reimbursement

HCPCS is divided into two subsystems:   Level I and Level II

Level I:   CPT-4, a numeric coding system maintained by the AMA to identify medical services and procedures furnished by physicians and other healthcare professionals.

Level II:   Standardized coding system that is used primarily to identify products, supplies, and services not included in the CPT-4 Codes.

There have been no new HCPCS legislation/regulations introduced this year.

ASHT's Position:   Level II "L" codes should be revised.

30 Day Rule

The 30 day rule requires that patients visit their physician every thirty days to continue treatment and therapy.

There has been no new legislation/regulations regarding the 30 day rule introduced this year.

ASHT's Position:   The 30 day rule is a barrier to effective and consistent treatment and it should be eliminated.