IMG_1955-e1526952276246 Post-Medicare Therapy Cap: Where Are We, and Where Are We Going?

The Medicare Therapy Cap was permanently repealed on February 9, 2018 when Congress passed the Bipartisan Budget Act of 2018—a $500 billion legislative package that will impact the U.S. economy in multiple areas. Initially, the rehabilitation world rejoiced in perceived victory. After all, we had been fighting the arbitrary Medicare Therapy Cap for 20 years. The Medicare Therapy Cap constrained access to needed care for patients; beneficiaries were limited to $2010 of combined physical and speech therapy and $2010 of occupational therapy per year. The passage of the Bipartisan Budget Act of 2018 permits patients to receive continued therapy past this amount if medically necessary.

Repeal of the Medicare Therapy Cap was not the sole win for consumers. The bill also increased funding for community health centers, efforts to address the opioid epidemic, healthcare for veterans, and health insurance for children. These measures improve healthcare access for Americans. And in addition to affecting the healthcare industry, this massive piece of legislation also increases defense spending, guaranteed funding of the government through March 23, allocates money for disaster relief, and suspends the debt ceiling.

“The legislation funded a number of major programs and provided fixes to flawed policies without raising taxes, so ‘offsets’ were required to help pay for the cost of the overall budget package,” explains Justin Elliott, Vice President of Governmental Affairs for the American Physical Therapy Association (APTA). These offsets included modifications to Medicare Part D drug coverage, reduction in payments to skilled nursing facilities, a payment differential for services provided by physical therapist assistants (PTA) and occupational therapist assistants (OTA) and a lowered payment increase for home health services. “These were parts of this package that APTA did not support,” asserts Elliott.

Changes in payment for PTAs & OTAs

Inclusion of the PTA/OTA payment differential decreases reimbursement for services provided by a PTA or OTA by 15% relative to those provided by a physical or occupational therapist. This last-minute addition came as a surprise to many, as previous bipartisan agreements, including the near-universally supported Medicare Access to Rehabilitation Services Act, did not include this provision.

“This was brought up in 2010 during discussions with Medicare Payment Advisory Commission (MedPAC) and again in the Senate in 2014,” explains Elliott. “During those talks, the Senate proposed performing a study regarding the value of the payment differential. This never happened, however.”

Currently, there is a 15% reduction in payment for services performed by a nurse practitioner (NP) or physician assistant (PA) compared to those performed by a physician. The difference, according to Elliott, is that services provided by a PTA are billed by the physical therapist while services provided by an NP or PA are billed by that provider. Those in favor of the PTA/OTA payment differential claim this reduction in reimbursement will save the government money.

Centers for Medicare and Medicaid Services (CMS) has no data backing up the claim that the payment differential for PTAs and OTAs is a cost-saving measure, so we aren’t sure how the Congressional Budget Office was able to determine this,” says Elliott.

Starting in January 2020, CMS will begin collecting this data by requiring providers to add a modifier for services rendered by a PTA or OTA.

As with all policy changes, this will affect patient care, especially in rural America. Many rural private practices, hospitals, and skilled nursing facilities rely on PTAs and OTAs to deliver rehabilitation services due to the low number of PTs and OTs in these regions. PTAs and OTAs are cost-effective to employ, allowing rural facilities to improve profit as well as access. Implementation of this differential may de-incentivize facilities from hiring PTAs and OTAs, which could affect access to rehabilitation services.


Changes in payment for home health services 

The Bipartisan Budget Act of 2018 also included an offset that lowered payment increases for home health services. While the payment for home health will increase 1.5% in 2020, this is reduced compared to the original CMS proposal. However, many believe that this reduction in payment will have a negative effect on patient health.

“In the home health setting, patients are frequently discharged from the hospital with multiple medical conditions and are often in a very fragile state of health,” says Jamie Lowy, a home health physical therapist in California. “Limiting payment increases to 1.5% may cause many agencies to decline referrals for patients whom they anticipate will be a financial drain for both clinical and supply resources.” Consequentially, patients may not receive the necessary care they need, thus increasing hospital and nursing home re-admissions.

Additionally, due to payment incentives transitioning from time-based to value-based, Congress included a switch from a 60-day to 30-day episode of care. This reduction may engender interruptions in services since physician approval is required before in-home visits can be continued.

Furthermore, beginning in 2020, home health therapy thresholds will be eliminated. The therapy threshold is related to the total number of physical, occupational and speech therapy visits provided in an episode of care. It functions as a “work around” of a 20-visit maximum for patients with complex medical issues and allows agencies to accept these cases without losing a considerable amount of money. Elimination of the threshold may put at risk the opportunity for patients to remain safe in their home and have a better quality of life.


Minimizing the adverse effects of budget offsets

It took 20 years to repeal the therapy cap. Will it take another 20 years to negate the offsets included in the Bipartisan Budget Act of 2018?

“Healthcare providers need to stay active and stay tuned. Our battle now shifts to the regulatory arena,” says Elliott. The changes in payment won’t go into effect until 2022. This gives affected stakeholders time to identify options for advocacy strategies during the regulatory process. “APTA will be working with our friends at the American Occupational Therapy Association (AOTA) and we will be meeting with CMS to determine what their timeline is for rulemaking.”

Before regulations are implemented, CMS is required to recognize a public comment period, which allows stakeholders to communicate how these rules will affect patient care. Organizations like APTA and AOTA alert members when this occurs. Concerns and suggestions can be submitted electronically or via hard copy letter. In my perspective, this is a crucial moment. We need to encourage our patients and colleagues to submit public comments on how these offsets affect public health and costs for the consumer.

“Unity matters. Physical therapy, and healthcare in general, are facing challenges on multiple fronts in an ever-changing environment,” says Elliott. “We must face these challenges united if we are going to succeed. We must think of the patient.”