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Written by: Bob Habasevich, PT on Thursday, May 10, 2012 Posted in: Outpatient Rehab

Once again this year we witness what is becoming the annual ritual of extending the Medicare therapy caps; the failed attempt to correct all that is wrong with the outpatient payment methodology for rehabilitation therapies.

The original $1,500 cap on Part B Medicare therapy services was intended as a cost control mechanism, but has not proved effective in saving Medicare money. Instead, it has punished the most debilitated of Medicare patients and denied them needed care. Congress has recognized that a financial limitation on therapy is detrimental to Medicare patients. Through the years, it has placed numerous moratoriums on its implementation.

For some practicing therapists now reaching their 15th anniversary since graduation, they have never known anything but the therapy cap as the standard rationing methodology in place to limit patient access to therapy. Sometimes, with short term extensions like we just received from Congress for two months, we go through it more than once a year.  It needs to stop.  Congress needs to address this flawed formula.

Outpatient therapy services are furnished in such diverse settings as hospital outpatient facilities, nursing facilities (SNF), comprehensive outpatient rehabilitation facilities (CORF) and outpatient rehabilitation facilities (ORF). In addition, outpatient therapy services may be furnished by individual practitioners including physical therapists in private practice (PTPP), occupational therapists in private practice (OTPP), speech-language pathologists in private practice (SLPP), physicians and specified non-physician practitioners (NPP) as permissible by state law.

Until now therapy caps did not apply to hospitals, and patients could receive therapy by a therapist in a hospital outpatient setting after reaching the annual cap. The proposed cap will apply to hospitals, as well as the usual therapy outpatient providers.

Statutory mandates since 1997 have required HHS to take certain actions toward developing a payment system for outpatient therapy that considers patientsu2019 individual needs for care.  The agency has made progress to standardize and collect information on the health and functioning of patients receiving outpatient therapy servicesu2014a key part of developing a system based on patientsu2019 actual needs for therapy.  However, a payment system that classifies patients according to need and pays for care regardless of provider type with a case mix- risk adjusted methodology is still years away.

And in the meantime, we will look forward to a March renewal of the therapy caps renewal. Because, without this key information of patient need and the resource costs of meeting it, a fair and equitable payment system is just not possible.