Therapy Cap

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.” 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.

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. Representative English and Senator Ensign have introduced legislation, H.R. 916 and S.438, that would repeal the Medicare caps on outpatient rehabilitation therapy. Although the Budget Reconciliation has postponed the $1,740 cap, a permanent fix remains a priority for ASHT.

Of additional importance, on May 30, 2006, over a third of the House asked committee leaders in charge of Medicare to extend the exceptions process for beneficiaries who exceed caps for Medicare-paid outpatient therapy. The letter asks the leaders of both the Ways and Means Committee and the Energy and Commerce Committee to extend the “ exceptions process for a minimum of the 2007 calendar year.”

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)

CMS has opened the proposed DMEPOS rule for comment through June 30. As a result, ASHT is working with the AMA and other affiliated organizations to develop a list of essential (and often inexpensive) products that should not be included in the competitive bidding process. If you would like more information about the proposed rule, you can find the proposal in its entirety at the CMS website HERE.

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.

Under this new DME model, CMS will use competitive bidding in selected markets. The MMA requires that competition occur in ten of the largest metropolitan statistical areas (MSAs) starting in 2007, expanding to 80 of the largest MSAs by 2009. CMS will choose the 10 regions they believe will provide the most competitive environment and will be of a size that will not overwhelm their current capacity to conduct a bidding process. Under a previous DME demonstration project, competitive bidding achieved Medicare savings and this expanded program is expected to produce similar results.

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.