MedPAC Recommends Cuts on Outpatient Therapy Caps
Tuesday, February 4, 2014
by: VNAA Policy Team

Section: Public Policy and Advocacy

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The Medicare Payment Advisory Commission (MedPAC) urges Congress to reduce the therapy cap for physical therapy and speech-language pathology services combined and the separate cap for occupational therapy to $1,270 each. That would amount to a 33.9 percent reduction from current caps of $1,920. The Medicare Economic Index would update these caps each year.
MedPAC would permanently include services delivered in hospital outpatient departments under therapy caps and apply a multiple procedure payment reduction of 50 percent to the practice expense portion of outpatient therapy services provided to the same patient on the same day.
Also, MedPAC recommended Congress should reduce the certification period for the outpatient therapy plan of care from 90 days to 45 days, develop national guidelines for therapy services, implement payment edits at the national level based on these guidelines that target implausible amounts of therapy and use authorities under the Affordable Care Act.
Therapy caps exception process is one of 20 in the list of “extenders,” listed as major health-related provisions that expire during the current fiscal year and typically included in previous short-term Medicare physician payment proposals before Congress. The most important extenders provision is the “doc fix,” repealing the Medicare physician payment Sustainable Growth Rate (SRG) and replacing it with an improved incentive program.
In December, Congress approved a three-month reprieve, until March 31, while it worked on a permanent repeal. The therapy caps exceptions process received a similar extension. Groups representing therapy providers are urging that Congress repeal the caps.
The House Commerce Committee is one of the congressional panels considering extenders legislation. In the Senate, the Finance Committee will have its version. In December, its version of the SGR repeal bill that did not advance beyond Committee would repeal the cap effective Jan. 1, 2015 and require prior-authorization “targeting therapy services furnished to a beneficiary above certain thresholds” established by the Department of Health and Human Services, according to a Finance summary.
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