Bipartisan Budget Agreement Has Good and Bad News for Occupational Therapy


Today, the Senate approved the bipartisan budget measure approved last week in the House of Representatives, marking the first time in more than four years that a bipartisan budget agreement has passed through both chambers. 

The agreement aims to avert a portion of the cuts from the sequester, the automatic across the board budget cuts that went into effect last year.  The budget deal has good news and bad news for occupational therapy:  it restores the majority of the cuts made to federal education and research programs, but it continues the current 2% reduction in Medicare provider payments through 2023.  The budget bill also contains a provision that will extend the Medicare therapy cap exceptions process through the end of March.

The sequester cut federal education and research funding by 5%, beginning on April 2013.  This included $625 million from federal special education funding and significant reductions to National Institutes of Health and other federal research agencies.  The budget agreement restores 87% of these funds cut for general education, special education, and federal research programs.

The impacts of these cuts to education and research funding are clear.  In October, AOTA asked school system practitioners to participate in a study conducted by the National Coalition on Personnel Shortages in Special Education and Related Services (NCPSSERS), to gain insight into the effect sequester cuts were having on special education. Among other results, 94% of respondents said their school district has been impacted by budget cuts over the last year with 83% saying budget cuts have already affected the delivery of special education services.  Additionally, in 2012, spending on research declined for the first time since 1974, including those programs supported by the Department of Health and Human Services.  Sequester cuts for 2013 further eroded federal research dollars.  By restoring the majority of the sequester cuts, this budget deal will help reverse these trends.

Unfortunately, the current 2% reduction in payments to Medicare providers, including all occupational therapy practitioners will not only remain in place, but is extended for two more years through 2023.  This is one of several provision included in the bill to achieve $23 billion in deficit reduction.

Finally, the budget agreement, approved by both the House and Senate, carried with it provisions to temporarily extend the Medicare therapy cap exceptions process and patch to the Sustainable Growth Rate (SGR) through the end of March. This action prevents a hard cap on Medicare outpatient therapy services from going into effect on January 1st and avoids a 24% reduction in Medicare Payment rates for providers. The three month extension also gives lawmakers additional time for Congress to finish its work on the long term reform package currently making its way through the legislative process.  The President is expected to sign the extension into law as soon as it reaches his desk.

AOTA advocated strongly to restore funding to federal special education programs as well as to ensure that the therapy cap exceptions process was included in the three month extension of the SGR patch.