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Therapy cap insanity on Capitol Hill

May 13, 2014
by Bob Gatty
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A popular definition of insanity is to do the same thing over and over again and expect different results. Well, if that’s true, then Congress must be really insane.

At issue is the nagging problem of the Medicare caps on physical, occupational and speech therapy imposed by the Balanced Budget Act of 1997. Because the cap limitation have proven to be inadequate, Congress has acted at least 11 times to prevent their implementation, either through a moratorium or by establishing and extending an “exceptions” process.

So you would think that, after 11 times, the light bulb would go on in more than one congressional brain and the cap would either be enhanced so it reflects reality or eliminated altogether. That’s what the organizations representing the long-term care industry want, and to at least one lawmaker, that seems to make total sense.

In April, the American Health Care Association and the National Center for Assisted Living (AHCA/NCAL) applauded Sen. Ben Cardin (D-Md.) for reiterating his support for legislation that would repeal the caps on Medicare Part B therapy services. The senator raised the issue during questioning of Health and Human Services Secretary Kathleen Sebelius at a Senate Finance Committee hearing.

Cardin said the current cap on therapy services, currently $1,920 per year, is not good health policy. He expressed concern that the therapy claims review process, known as the manual medical review (MMR), could be problematic both financially and physically for Medicare beneficiaries if access to services is compromised. Cardin also cautioned that the MMR process could prevent “timely payments” to providers of therapy services.

“On behalf of skilled nursing centers in Maryland and around the country, we commend Sen. Cardin for his dogged determination on the critical need to lift these needless, arbitrary therapy caps,” said Mark Parkinson, president and CEO of AHCA/NCAL.


The therapy cap applies to all Part B outpatient therapy settings and providers, including private practices, skilled nursing facilities, home health agencies, outpatient rehabilitation facilities, comprehensive outpatient rehabilitation facilities and hospital outpatient departments.

Under the exceptions process, created by a provision in the Deficit Reduction Act of 2005, individuals and providers may seek Medicare coverage for therapy services above the cap. Automatic exceptions are available when therapists attest that ongoing therapy services are reasonable and necessary, and that must be justified by supporting documentation in the beneficiary’s medical record.

Providers and industry organizations contend the process is cumbersome, time-consuming and a burden on staff. Claims exceeding $3,700 are subject to an mandatory MMR by Medicare contractors.

Over the past few years, the annual cry to lift the caps has been met by Congress as part of efforts to prevent Medicare payment cuts under the hated sustainable growth rate (SGR) formula. Had Congress not acted in April, providers would have seen their Medicare payments slashed by 24 percent and the exceptions process would have expired on March 31.

The Protecting Access to Medicare Act of 2014, passed by Congress in late March, however, essentially keeps payments level through March 31, 2015, and extends the exceptions process through that date as well. So Congress has until then to negotiate a permanent SGR fix as well as a solution to the annual therapy caps problem.


AHCA/NCAL says it has worked closely with a coalition of patient, consumer and healthcare provider organizations to identify simple and practical MMR process improvements. Those ideas were submitted to key congressional committees October 18, 2013, and center on these themes:

  • Protecting beneficiary access from care disruptions by strengthening the 10- day MMR requirement.
  • Improving the MMR process by simplification, standardization and automation of contractor and provider communications.
  • Requiring the Government Accountability Office to study the MMR process to identify opportunities to better design and tailor the Part B therapy benefit, and to improve the MMR process to better target medical review of outliers.


So, what will Congress do during the months until the new deadline approaches next March?

Remember, an election is coming in November, and that could have a major impact on the composition of both the House and Senate, and, of course, the key congressional committees that must consider the matter.

Thus, if past performances are prologue, most likely the answer to that question is “not much.” Unfortunately, insanity can be expected to prevail once again in the hallowed halls of Congress.

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