Full repeal of the cap and other therapy reforms advance in legislation


12/23/13 Update

Participation Highlighted as Therapy Reforms Advanced in Medicare Provider Payment Legislation

Repeal of the therapy cap is included in the newly released Senate Finance Committee proposal to address several Medicare issues.  The legislation is expected to move in the early part of 2014. The repeal would be a significant victory; the legislation also sets new guidelines for capturing data that include the critical word “participation” as one of the factors to be examined through the data.

The three committees with jurisdiction over the Medicare program in the House and Senate have weighed in and approved similar versions of legislation to reform the Medicare physician provider payment system. Each of the three bills would repeal the sustainable growth rate formula, encourage the use of alternative payment models, establish a quality incentive structure, and exact additional changes to the way Medicare pays for the delivery of care.

Over the course of 2013, AOTA has worked closely with the three Committees, advocating strongly for therapy cap repeal in any larger SGR reform effort, providing timely feedback on policy options, and fighting back harmful provision under Committee consideration. While neither the House Ways & Means Committee nor the House Energy & Commerce Committee bills included language to address the therapy cap, Ways and Means Chairman David Camp (R-MI) stated at a hearing, in response to several member questions, that issues such as the therapy cap would be addressed in the final legislation brought to the House floor. Action in the Senate Finance Committee explicitly repeals the cap and yielded a number of significant reforms to therapy under Medicare.

The following provides an overview of the therapy reforms put forward in the Senate Finance Committee legislation:

Repealing the Cap

AOTA’s continuing efforts to ensure the therapy cap is not forgotten amongst broader Medicare reforms were realized in the Senate Finance Committee bill. Language in the legislation’s therapy section begins by repealing the Medicare Part B therapy cap immediately upon enactment.

Medical Review: Repeal of Onerous MMR System

The legislation leaves in place an unpopular manual medical review (MMR) system at its current threshold ($3700), but  only through 2014 before sunsetting the policy on January 1, 2015. In place of MMR, the Senate Finance Committee bill proposes a new medical review program for outpatient therapy services would be installed to target outlier characteristics and utilize prior authorization as its mechanism for approval. Outlier criteria would include but not be limited to the following:

(1) Services furnished by a therapy provider whose pattern of billing is higher compared to peers.

(2) Services furnished by a therapy provider who, in a prior period, has a high claims denial percentage or is least compliant with other applicable requirements under this title.

(3) Services furnished by a therapy provider who is newly enrolled in the Medicare program.

(4) Services furnished by a therapy provider who has questionable billing practices, such as billing medically unlikely units of services in a day.

(5) Services furnished to treat a type of medical condition.

(6) Services identified by use of the standardized data elements required to be reported.

(7) Services furnished by a single therapy provider or a group that includes such providers.

AOTA championed a number of improvements to ensure any new process would be made easier for our practitioners. Under this system, providers would be able to request multiple visits for their patients, and be able to submit requests through fax, mail, or by electronic means. The bill provides some funding to ensure contractors provide a viable means for submission electronically to allow for quicker turnarounds when necessary. Importantly, the legislation takes additional steps to ensure determinations are made within ten business days or otherwise deemed to have met the applicable requirements for Medicare coverage where the contractor fails to comply.

Providers demonstrating low denial rates over an extended period of time, under the prior authorization system, could be exempted from medical review by the Secretary altogether. The new medical review system (prior authorization) will be established through rule making and will allow for stakeholder input. Furthermore, the legislation strictly forbids the use of administrative contractors who are paid on a contingent basis like Recovery Audit Contractors (RACs) who are currently reviewing requests; this is another important reform AOTA championed. Finally, beginning in 2017 and every two years after, studies would be conducted to illustrate how the new medical review program was working for providers and beneficiaries alike.

Data Collection: ‘Participation’ Recognized as Key Factor

With a number of opportunities for stakeholder comment and input, the legislation requires the Secretary to establish a new data collection system. The new system would replace the current functional limitation reporting system. Should this legislation go on to become law in 2014, a new data collection system could be in place as early as 2017.  Like functional limitation reporting, providers would be required to report on the data elements identified by the Secretary in order to have their claims paid. The legislation suggests the following items be included among the standard data elements identified for reporting:

(1) demographic information

(2) diagnosis

(3) severity

(4) affected body structures and functions

(5) limitations with activities of daily living and participation

(6) functional status

(7) other domains determined to be appropriate by the Secretary

No later than 18 months after the date the data reporting system is operational, the Secretary would submit a report to Congress on the design of a new payment system for outpatient therapy services. The Secretary would consult with stakeholders regarding design of such a new payment system. Based on the timelines outlined in the bill and assuming the legislation were signed into law in early 2014, we estimate a new payment system for outpatient therapy services could be operational some time in 2019.

AOTA Forestalls Direct Cut to Assistant Reimbursement

In the current climate of fiscal austerity, lawmakers continue to search for creative and often destructive ways of saving money. During our discussions, it became clear that the Committees were considering cuts to assistant-provided services in order to help finance the larger SGR reform package. In response to AOTA’s fervent push back on that approach, the legislation now simply requires that services delivered by a therapy assistant be identified on each claim. 

Long Road Ahead

While AOTA is encouraged that much of our input and discussion with the Senate Finance Committee is represented in the legislation unveiled on December 19th, we remain diligent in our efforts to refine and strengthen provisions impacting our membership ahead of full Senate consideration. Additionally, as the House of Representatives moves forward on a parallel track, we continue to hear assurances that therapy will in fact be addressed before final passage. Despite their silence on the therapy cap and other reform items present in the Senate bill, AOTA has built strong support around its policy priorities in the House and have activated our most ardent Congressional champions. With their support and your continued grassroots enthusiasm, 2014 can be the year we unchain ourselves and the patients we serve from the long destructive policy of the therapy cap.

More analysis on the changes to quality reporting that affect occupational therapy will be reviewed in the future.

12/13/13 UPDATE

Full repeal of the Medicare Part B therapy cap advances in legislation.

Congressional efforts to reform the Medicare provider payment system and repeal the sustainable growth rate (SGR) formula made significant progress Thursday, as the House Ways & Means and Senate Finance Committees each approved their respective versions of the legislation with bipartisan support.

On the strength of years of effective advocacy and an intense lobbying campaign in recent months, AOTA is pleased to report that the Senate Finance Committee has included language in its bill to fully repeal the Medicare Part B therapy cap.

Despite encouraging signs in the Senate, the language considered and approved unanimously by the House Ways & Means Committee on Thursday failed to address the long-flawed therapy cap policy. Members of the committee, however, called on the Chairman to ensure the cap and other important Medicare extender policies were addressed by the time the bill was considered on the House floor.  The Chairman, in turn, committed to his colleagues that the cap and other extenders would be part of the SGR bill that receives the full consideration of the House. 

For additional information including links to each Committees legislation please visit this link.

As comprehensive legislation continues to make its way through the House and Senate, additional steps were taken Thursday to ensure looming cuts to providers under the Medicare Physician Fee Schedule are avoided and the expiring therapy exceptions process is extended before year’s end. The short term extension was included and passed alongside the bipartisan budget deal struck earlier in the week. The legislation extends the therapy exceptions process and avoids provider cuts for three months, providing lawmakers additional time to reach agreement on a permanent SGR reform bill in the new year. 

Additional analysis from AOTA is forthcoming next week.


The Senate Moves to Repeal the Therapy Cap

Today the Senate Finance Committee released the SGR Repeal and Medicare Beneficiary Access Improvement Act of 2013, in advance of its scheduled Thursday markup. Among many other provisions, the legislation seeks to repeal the Medicare Part B therapy cap. More information and analysis to follow.