April 1st No Joke for Occupational Therapy Practitioners: Mandatory Sequestration Cuts and Increased MPPR Go Into Effect


On April 1, 2013, as a result of the federal budget process known as sequestration, all occupational therapy practitioners providing services to patients receiving Medicare will see a 2% reduction in payments.

On the same day, the Multiple Procedure Payment Reduction (MPPR) for outpatient therapy services, will increase from 20% in office settings and 25% in facilities, to 50% across the board – an estimated 7% reduction in payments.

Since August 2011, when Congress passed the Budget Control Act (BCA), the threat of automatic spending cuts known as “sequestration” has loomed. The BCA required Congress to approve at least $1.2 trillion in deficit reduction over 10 years, or mandatory cuts on spending, known as sequester, would go into effect. On March 1, 2013, rather than agreeing on spending cuts, Congress chose to allow the sequestration to begin, with cuts officially starting on April 1.

The Medicare payment reductions of 2% are less than the approximately 5% reduction in other domestic programs, such as education, and the 5% reduction in defense spending that result from sequestration.

“Therapists in virtually every Medicare setting—hospitals, acute care facilities, rehab centers, home health—will see an impact because these cuts were done with a hatchet rather than a scalpel,” says Christina Metzler, AOTA’s chief public affairs officer.

AOTA has opposed these across the board cuts because their impact on clients and practitioners may be significant and also are unknown.

These cuts come as therapists face other Medicare program changes such as the requirement that outpatient therapy providers billing Medicare report functional data for patients on the claim form, the requirement that occupational therapy practitioners in private practice report on quality measures for the Physician Quality Reporting System, the new Manual Medical Review for outpatient claims over $3700 and the continued MPPR.

Meanwhile, education and research funding would receive a 5% cut as a result of sequestration. This will mean $625 million taken away, this year, from federal special education funding and significant reductions to National Institutes of Health and other federal research agencies. AOTA continues to monitor other issues affecting funding for occupational therapy, including therapy caps, the Individuals with Disabilities Education Act, and No Child Left Behind.

“AOTA understands that this is a difficult time for therapists, but it is also a difficult time for the country as leaders struggle to agree how to best move the country forward,” Metzler says.

Occupational therapy practitioners should not be shy about reporting the impact felt from political decisions to their federal and local representatives. Even when these cuts go into effect, Congress has the capacity to end them, or to make changes. Feedback from you can help shape those adjustments.

For more information, e-mail AOTA’s Federal Affairs Division at