Skip to content Skip to navigation

LTC protests therapy payment policy

March 1, 2011
by Bob Gatty
| Reprints
Bob gatty
Bob Gatty


The long-term care (LTC) community is up in arms about a new Medicare policy for paying for therapy services, which industry organizations contend is contrary to law and does not recognize treatment realities.

The Affordable Care Act requires the Centers for Medicare & Medicaid Services (CMS) to identify and make adjustments to the relative values for multiple services that are frequently billed together when a comprehensive service is furnished. As a result, CMS is adopting a multiple procedure payment reduction (MPPR) policy for therapy services to recognize efficiencies when combinations of therapy services are furnished together.

In its press release announcing implementation of the 2011 Medicare payment schedule, published in November 2010, CMS stated:

Although not part of the Affordable Care Act, to more appropriately recognize the efficiencies when combinations of therapy services are furnished together, CMS is adopting a multiple procedure payment reduction policy for therapy services that will reduce by 25% the payment for the practice expense component of the second and subsequent therapy services furnished by a single provider to a beneficiary on a single date of service. This policy will apply to all outpatient therapy services paid under Part B, including those furnished in office and facility settings.”

Later, however, CMS said the reduction would be 20% except for institutional providers, which would remain subject to the 25% cut.

A coalition of industry organizations, which tried last year to convince CMS not to apply the MPPR policy to therapy services, wrote to CMS Administrator Dr. Donald Berwick in mid-January expressing concern about how the new policy apparently is to be implemented. “We are disappointed that the agency may seek to limit the changes to the MPPR to only office settings (physician offices and physical therapists/occupational therapists/speech language pathologists in private practice),” the organizations wrote. Among the 10 organizations signing the letter was the Alliance for Quality Nursing Home Care, the American Health Care Association, and the National Association for the Support of Long Term Care (NASL).

The coalition pointed out that the Physician Payment and Therapy Relief Act of 2010 (PPTRA) modifies the payment amount for all Part B therapy services, and that the law requires the reduction to be 20%, not 25%. “Interpreting the PPTRA to establish a distinction among therapy services provided in different settings is inconsistent with (the law's intent) and creates an inappropriate and unjustified inequality in payment,” they contended.

Last August, NASL and the American Association of Homes and Services for the Aging (now LeadingAge) were among organizations that submitted comments to CMS regarding the final fee schedule rule, which included a proposal to reduce payments by 50% of the practice expense (PE) component for procedures performed on the same patient on the same day-the standard used by CMS for imaging and surgical services.

“Therapy services…involve a prolonged episode of treatment over time, in which hands-on services are delivered to provide ongoing assessment and intervention in an iterative care process where the care is continually adapted to the patient's response,” said Cynthia K. Morton, NASL executive vice president. “Extracting a ‘session’ or a day out of a treatment episode and counting service units as though they all had the same features ignores the clinical content of the services delivered as they are adapted to the patient's functional and health status and therapeutic goals.”

The Affordable Care Act requires the Centers for Medicare & Medicaid Services (CMS) to identify and make adjustments to the relative values for multiple services that are frequently billed together when a comprehensive service is furnished.

In that submission, Morton called on CMS to apply the 20% MPPR as required by the Physician Payment and Therapy Relief Act of 2010. “Our view on this issue is based on clear regulatory guidance by CMS and statutory language that requires payment rates for therapy services in an office setting to be applied to all therapy settings,” she said.

However, in the final rule, CMS said that beginning in 2011, a reduction of 25% would be applied to the PE component of payment for the second and subsequent “always therapy” services that are furnished to a single patient by a single provider on one date of service.

Meanwhile, on the good news front, at press time it appeared that a major objective of the LTC industry and other business groups across the country would soon come to pass. The Senate, on Feb. 2, voted 81-17 to repeal a provision of the healthcare reform law that requires employers to file IRS 1099 forms for vendors who do more than $600 worth of business in one year.

Rep. Dan Lungren (R-Calif.) introduced legislation in the House of Representatives in January to take similar action. Once given final approval by Congress, the legislation is expected to be signed President Obama. LTL

Bob Gatty has covered governmental developments of the trade and business press for more than 30 years. He is founder and president of G-Net Strategic Communications, Sykesville, Maryland. Long-Term Living 2011 March;60(3):14-15

Topics