Friday, October 27, 2017

Congress Issues Draft Bill to Repeal Medicare Part B Therapy Caps

Dan Ciolek

On Thursday, October 26, the U.S. House Energy and Commerce Committee, the House Ways and Means Committee, and the Senate Finance Committee announced a bipartisan, bicameral deal on a permanent repeal of the annual limit on per-patient therapy expenditures in Medicare, commonly known as therapy caps.

AHCA/NCAL is encouraged that the proposed policy appears to permanently resolve this long-standing problem and will assure timely, uninterrupted beneficiary access to necessary outpatient therapy services. Additional details will be available soon, however, here are the major components of the proposed policy.

  • The Part B therapy caps would be repealed beginning January 1, 2018.
  • The limited targeted medical review process first established in the MACRA 2015 legislation would be made permanent beginning January 1, 2018, with the following details:
    • The dollar threshold for possible medical review targeting would be set at $3,000; 
    • Providers would be required to submit a KX modifier at the $3,000 targeted medical review threshold; and
    • The CMS funding for medical review would be fixed at the same $5 million per year levels as the prior MACRA review process. 

Of note, the legislative proposal does not currently contain any offsets to pay for the provisions. Current therapy cap exceptions protections for beneficiaries are due to expire. Congress must act before the end of the year to either repeal the therapy caps or to grant another temporary extension for the exceptions process to protect beneficiary access to care.

Therapy caps, first established by the Balanced Budget Act of 1997 (BBA), limited the amount of therapy services a beneficiary could receive in a year, regardless of their condition. The therapy cap limits for 2017 are:

  • $1,980 for physical therapy (PT) and speech-language pathology (SLP) services combined
  • $1,980 for occupational therapy (OT) services 

Congress has acted 17 times since 1999 to suspend or modify the therapy cap process through various temporary legislative patches. In 2006, Congress created an exceptions process allowing patients to exceed the cap based on medical necessity. Most recently, the cap was addressed in the 2015 MACRA legislation, which established a targeted medical review strategy that AHCA/NCAL advocated strongly for to replace the severely burdensome pre-pay review of 100 percent of claims over $3,700 that was previously enacted in 2012. 

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