Medicare Therapy Cap

Under the Balanced Budget Act (BBA) of 1997 Congress placed an annual cap on rehabilitation services under Medicare. Since enacting the BBA, Congress has recognized the cap's potential harmful effect on Medicare beneficiaries and has acted several times to prevent implementation of a hard cap.

Representatives Charles Boustany (R-LA), Xavier Becerra (D-CA), Marsha Blackburn (R-TN), and Lois Capps (D-CA), and Senators Ben Cardin (D-MD) and Susan Collins (R-ME) introduced the Medicare Access to Rehabilitation Services Act (H.R. 775/S. 539) in the 114th Congress. H.R. 775 and S. 539 would permanently repeal the $1,940 therapy "cap" imposed on physical therapy, occupational therapy, and speech-language pathology services. An arbitrary cap on outpatient therapy services without regard to clinical appropriateness of care discriminates against the most vulnerable Medicare beneficiaries. APTA believes that a full repeal of the therapy cap is necessary to ensure patients have access to timely and appropriate care.

There is a two-tiered exceptions process, an automatic exceptions process and a manual medical review exceptions process. The automatic exceptions process applies when patients reach the $1,940 threshold and the manual medical review exceptions process is required at the $3,700 threshold.

Medicare Therapy Cap and SGR Reform

Congress is working on a long term solution to address the flawed Sustainable Growth Rate (SGR) formula in order to prevent a 21% cut in Medicare provider payments. The therapy cap has historically been tied to extension of the therapy cap and we believe any package to repeal the SGR should include a full repeal of the Medicare therapy cap, rather than just an extension of the current policy. Although APTA supports passage of necessary SGR reform, it is essential to include a permanent repeal of the therapy cap in final legislation; without doing so is a missed opportunity for a long-term solution and puts beneficiaries in a dire situation when this extension expires. Without SGR as a legislative vehicle in future years, necessary therapy for beneficiaries who need it most will be threatened.

Congress has until March 31 to take action on both the SGR and therapy cap. NOW is a critical time to take action to ensure full repeal of the therapy cap is included in the final policy. APTA remains engaged on Capitol Hill and will update resources as new information is made available.

Please see:

How to Take Action

APTA members and nonmembers can help repeal the therapy cap by:

  • Call your legislators. Ask for the health legislative assistant, and urge them to protect access to care by including full repeal of the therapy cap in SGR legislation before the March 31 deadline.
  • Email your legislators. APTA has provided prewritten letters for APTA members on the Legislative Action Center and for nonmembers/patients on the Patient Action Center. You can also send letters through the APTA Action App.
  • Meet with your legislators. Schedule a district meeting, attend a town hall event, or invite your legislators to visit your practice over recess. This is a great opportunity to meet with your members of Congress locally and discuss the importance of repealing the therapy cap.
  • Join PTeam. Join the PTeam to receive e-mail updates on the latest SGR and therapy cap news and receive alerts when it is time to take action and contact your members of Congress on these reform policies.

Policy Resources

Current Cosponsors


Payment Information & Resources

Additional Resources

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