Therapy Cap to Be Reinstated in 2018: Congress Fails to Take Action

Heather Parsons

Stop the Therapy Cap!Updated 1/12/2018

With many issues still up in the air from 2017, Congress has given no clear indication of when it will address the cap on Medicare Part B therapy services that took effect on January 1, 2018. There is a commitment by our Congressional champions to end the cap once and for all, but many steps must be taken to make this a reality, and the Congressional calendar is crowded with other important issues such as funding the federal government. AOTA is working to achieve both a permanent fix to the therapy cap as well as a temporary extension of the 2017 exceptions process to ensure a pathway to beneficiary care. Your advocacy efforts are vital to ensure the therapy cap is repealed once and for all. Join the effort!

AOTA has consistently reached out to the Centers for Medicare & Medicaid (CMS) officials for guidance on how providers should handle claims approaching or exceeding the current cap, but we had received no answer as of the publication of this article. Until we receive further guidance, AOTA recommends that therapy professionals issue a mandatory Medicare notice, called an Advanced Beneficiary Notice of Non-Coverage, or “ABN,” to all Medicare beneficiaries they treat who reach the $2,010 cap. The ABN is issued in situations where Medicare payment is expected to be denied. Because Congress didn’t extend the exceptions process permitting the attachment of a KX modifier or the manual medical review process, it is your duty to notify your patients that their therapy services may be limited.

We will keep you posted to any guidance we receive from CMS and to any Congressional action on this issue.

Originally Published 12/22/2017

Despite a bi-partisan policy agreement to permanently fix the Medicare outpatient therapy cap, and the current patch to the therapy cap expiring on December 31, 2017, Congress left town without taking action to ensure access to therapy services for millions of Medicare beneficiaries. As a result a $2,010 cap now applies to all Medicare Part B therapy services, except for those services provided by Hospital Outpatient Departments/Clinics. The policy that would have placed a cap on HOPD services also expired on December 31, 2017

There were many important issues up in the air the last week before Congress recessed for the year, including funding for the entire federal government, funding for the Children's Health Insurance Program (CHIP), funding Community Health Centers (CHC), and preventing the therapy cap from taking effect. On Friday, Congress passed legislation to fund the federal government through January 19, 2018, and to fund CHIP, CHCs, and other public health programs through March 31, 2018. They failed to take any action to prevent the therapy cap from taking effect.

The "therapy cap" was first adopted in the Balanced Budget Act of 1997. Under this policy, Medicare beneficiaries cannot receive outpatient occupational therapy services, and, separately, physical therapy and speech language pathology services combined, if those services would exceed the "cap" amount, regardless of medical need. For 2018 the cap will be set at $2,010. Since its adoption in 1997, Congress has only allowed this hard cap on therapy services to take effect four times: in 1999, 2003, 2006, and 2010. At all other times, they either put in place moratoria on the policy, or implemented an exceptions process that allowed access to needed services.

At the end of October, the House and Senate reached a bi-partisan agreement on a policy framework that would repeal and replace the therapy cap once and for all. Despite this agreement, other issues including how to pay for repeal, how to address other Medicare provisions that typically are passed at the same time as the therapy cap, and a busy Congressional calendar, kept Congress from addressing the therapy cap before recess. But time is running out. On January 1, the cap will once again take effect, and there will be beneficiaries who reach this cap in January. Congress MUST make repeal of the therapy cap a priority when they return, before anyone is denied crucial therapy services. Contact your Members of Congress and tell them they must deal with the therapy cap as soon as they return.

In the meantime, AOTA has reached out to the Centers for Medicare & Medicaid Services (CMS) to get guidance on therapy cap implementation for 2018. Once we receive guidance from CMS, we will post it to the AOTA website, and keep you informed.