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Permanent Fix to the Medicare Therapy Cap Signed into Law

Tuesday, February 13, 2018   (0 Comments)
Posted by: Matthew Nicholas
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Permanent Fix to the Medicare Therapy Cap Signed into Law

Last Friday, Congress passed a $500 billion bipartisan budget deal that funds the US government through March 23, 2018 and sets the spending framework for 2019. President Trump signed the budget deal into law. The deal increases both military and domestic spending, and addresses disaster relief along with a host of critical federal health programs, including a permanent fix to the Medicare Part B Therapy Cap.

The Good. We should take a moment to celebrate closing the door on a 20 year advocacy effort that has challenged our ability ensure timely and appropriate services to patients.

The legislation enacted today provides a fix for the therapy cap by permanently extending the current exceptions process, eliminating the need to fix this issue from year to year. 

  • Therapy claims for outpatient Medicare Part B that go above $2,010 (adjusted annually) will still require the use of the KX modifier for attestation that services are medically necessary.
  • The threshold for targeted medical review will be lowered from the current $3,700 to $3,000 through 2027. While the threshold amount for medical review will be lowered, CMS will not receive any increased funding to pursue expanded medical review, and the overall number of targeted medical reviews is not expected to increase.
  • Claims that go above $3,000 will not automatically be subject to targeted medical review; only a percentage of providers who meet certain criteria will be targeted, such as those who have had a high claims denial percentage or have aberrant billing patterns compared with their peers.

The Surprising. There are some provisions of the budget deal in which APTA does not support. Including a provision to reduce payment for services in which a PTA is involved under Medicare Part B. Beginning January 1, 2022, payment for services provided by a PTA, as well as services provided by an OTA would be paid at 85% of the Medicare fee schedule.

Congressional rules require certain policies to be linked to other policies known as “pay-fors” at the  time that the policy change is proposed. On February 5th, the House of Representatives released a proposed package, which included a last- minute addition of a PTA and OTA payment differential. This payment differential came as surprise as it was NOT part of any prior discussions or negotiations as part of the bipartisan, bicameral agreement.

The APTA and AOTA have responded with alternative proposals to eliminate, reduce, or delay the PTA and OTA payment differential.

Even though the efforts of these legislative options were rejected, the fight in not over. The next step is for CMS to develop proposed rules to further define and provide additional guidance prior to implementation.

APTA will leverage its congressional champions, the APTA Public Policy and Advocacy Committee, and the PTA Caucus on strategies to address the CMS activities. Our collective efforts will drive the association’s work to ensure that guidance to implement the new policy is favorable to PTAs and the profession, while assuring access is not limited for those in need of our services.

Impact on Home Health:

The budget deal impacts home health positively by:

  • Including an extension of the home health rule add-on at current levels for 2018, and varied add-on rates for rural counties from 2019 through 2022.
  • Includes a provision allowing home health medical records to be used to determine eligibility for services.
  • Requires the FY 2020 market basket update for home health agencies to increase by 1.5% in 2020.

The negative impact on home health includes:

  • Requires a budget-neutral transition to a 30-day unit of service for home health services, down from the current 60- day unit payment starting in 2020.
  • Eliminates the use of therapy thresholds in case-mix adjustment factors.
  • Includes requirement to convene at least one session of a technical expert panel to identify and prioritize recommendations for the revised payment system.
  • Requires HHS to undergo rulemaking to propose and then finalize the revised payment system prior to January 1, 2020.

Over the coming days, APTA will provide additional details on the budget deal. 



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