Therapy Caps are Back. Will Congress Repeal or Replace Before Beneficiaries are Hurt?

Legislation | January 10, 2018 | by Marsha R. Greenfield

Medicare Part B therapy caps have been reinstated and need to be repealed.

In 1997 Congress imposed financial caps on outpatient therapy under Medicare Part B. The beneficiary is financially responsible for costs over the cap. In 2006, Congress enacted an exceptions process to over-ride the caps; the exceptions process expired at the end of 2017. Until this year Congress has never actually let the caps go into effect without an exceptions process. However, Congress failed to extend the exceptions process before the end of calendar 2017 and therefore Medicare beneficiaries now are subject to the annual per-beneficiary caps on outpatient therapy. This year the caps are $2,010 for physical and speech combined and another $2,010 for occupational therapy.

The exceptions process was good but not a real “fix” to addressing both need and cost. In October, the House Ways and Means Committee announced a bipartisan agreement to repeal the caps and replace with a medical review process targeted to identify and address systemic outliers while protecting patient access to necessary therapy.

In November, the House Ways and Means Committee announced a bipartisan agreement on Medicare provisions that were expiring that included the bi-partisan agreement to repeal caps and also a provision extending the rural home health add-on for another five years.

However, the committee also indicated that these and other “extenders” must be budget-neutral and must therefore contain offsetting spending cuts. Reimbursement reductions for skilled nursing facilities and home health care providers are on the list. We are concerned about this possibility, since Medicare payments already are reduced by 2% sequestration.

We understand that the Medicare “extenders” package, along with the Children’s Health Insurance Program which is funded through March, is being considered as part of the legislation that is needed to keep the federal government open. The current continuing resolution keeps federal programs in operation through January 19. It is likely that Congress will have to pass another short-term CR to keep federal programs operating while fiscal 2018 spending bills are rewritten in accord with current discussions between the White House and the congressional leadership over spending totals for this fiscal year.

LeadingAge is part of the large community of patient advocacy, professional and provider groups that support the bi-partisan agreement on out-patient therapy and are urging Congress to address this issue in January. However, because we are also concerned that the offsets will adversely affect our members, we also are urging Congress not to implement across-the-board cuts to both skilled nursing and home health. Please contact your member of Congress now to ensure that critical programs are preserved but paid for fairly.