Committee approves bill to improve Medicare reimbursement stability

Legislation would eliminate potential for large Part B cuts to OT in future

The House Ways and Means Committee has voted to approve the Provider Reimbursement Stability Act (H.R.8163) which would update the Medicare Physician Fee Schedule (MPFS) to improve stability for Medicare Part B reimbursement including for OT services. The bill was introduced and championed by Rep. Greg Murphy, M.D. of North Carolina, and it must still be adopted by the full House of Representatives and Senate before taking effect.

HR8163 would improve how budget neutrality calculations related to the utilization of Medicare billing codes are applied each year, and limit year-to-year variance in the Medicare Part B conversion factor to no more than 2.5%. While this would not guarantee increases to the MPFS, it would eliminate the wild swings that were experienced over the past several years when CMS significantly increased reimbursement for primary care services which forced reductions throughout the MPFS including for occupational therapy and other therapy services to maintain budget neutrality.

These significant reimbursement changes were made without regard to their impact on OT or therapy services and resulted in OT Part B reimbursement declining by 9% between 2021 and 2025. Most other specialties on the MPFS were also impacted by cuts. Congress phased-in these cuts which otherwise would have taken effect immediately in 2021; however, each year provider groups had to fight for this phase-in instead of being able to advocate for wider reforms. Passage of the Murphy bill would ensure that OT reimbursement would not be drastically lowered to make up for future increases in other parts of the MPFS. Therapy reimbursement accounts for a small part of the MPFS with the vast majority of payments being made to physicians and related professions including Nurse Practitioners and Physician Assistants.

AOTA supports HR8163 and is evaluating other legislation that would help reform the MPFS. We are also advocating for passage of the RECOVER Act HR8386, which would repeal the arbitrary therapy multiple procedure payment reduction (MPPR) and increase payments for Medicare Part B occupational therapy services.