Impact of Sequestration on OT


By Andrew Waite

Unless members of Congress and the President are able to reach a last-minute compromise, across the board spending cuts, often called sequestration, are set to go into effect March 1.

While it is hard to know the direct impact of these cuts on occupational therapy services and practitioners, there are likely to be some repercussions.

The good news is that services covered under Medicaid and the U.S. Department of Veterans Affairs are exempt from sequestration.

Medicare will see a 2% cut, which is less than the approximately 8% cut expected to affect programs ranging from defense to national parks.

“Still, the 2% cuts could affect cash flow for employers, which would have a direct impact on therapy practitioners,” says Christina Metzler, AOTA’s chief public affairs officer. “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.”

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

Meanwhile, education and research funding would receive the full 8% cut as a result of sequestration. That would mean about $1 billion taken away from federal special education funding and significant reductions to National Institutes of Health and other federal research agencies.

These cuts come as therapists face the Physician Fee Schedule Final Rule for CY 2013, which requires outpatient therapy providers billing Medicare to report functional data for patients on the claim form, as well as Multiple Procedure Payment Reduction (MPPR). The MPPR percentage was increased by Congress and will move up to a 50% cut in the Practice Expense component of payment; this is estimated to result in about a 7% overall cut. In addition, 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 if the cuts take hold on March 1, Congress has the capacity to make changes, and feedback from you can help shape those adjustments.

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