Yesterday, the Medicare Payment Advisory Commission (MedPAC) voted to adopt several recommendations on outpatient therapy payment reform. These recommendations will be included in a report to Congress that may be used to inform future policy related to outpatient therapy services. Congress has the discretion to determine whether or not to pass legislation that incorporates any of these recommendations. The Centers for Medicare and Medicaid Services also can choose to enact MedPAC's recommendations. APTA will continue to work diligently over the next couple of months with Congress to extend the exceptions process for therapy services in 2013 and to avoid any payment cuts. 

Overall, MedPAC commissioners expressed appreciation of the value of outpatient therapy services for Medicare beneficiaries and recognized that a "hard cap" with no exceptions would be detrimental and severely impede access to medically necessary therapy services. Several commissioners also acknowledged that, if applied appropriately, therapy presents a beneficial alternative to more costly services, such as surgery and hospital admissions due to falls and other conditions.

To avoid capping therapy services without an exceptions process, MedPAC recommends that Congress reduce the therapy cap for physical therapy/speech-language pathology combined to $1,270 in 2013 and occupational therapy to $1,270 in 2013, and permanently include hospital outpatient therapy departments under the cap. The cap amount would be updated each year by the Medicare Economic Index. MedPAC also calls for the secretary of the Department of Health and Human Services to implement an improved a manual review process for requests to exceed cap amounts. MedPAC's recommendation to improve the manual medical review process was based on what MedPAC staff described as "constructive feedback" from stakeholder groups, including APTA.

Other recommendations include applying a multiple procedure payment reduction (MPPR) of 50% to the practice expense component of therapy services provided to the same patient on the same day and reducing the certification period for the outpatient therapy plan of care from 90 to 45 days. MedPAC also voted to direct HHS' secretary to prohibit the use of V codes as a principal diagnosis on outpatient claims.

To improve management of the benefit in the long term, MedPAC recommends that CMS collect functional status information about beneficiaries using a streamlined, standardized assessment tool that reflects factors such as patient demographic information, diagnosis, medications, surgery, and functional limitations. This information could be used to measure the impact of therapy on functional status and provide a basis for future long-term reform of the payment system.

In anticipation of the release of these recommendations, APTA has been aggressively engaged on Capitol Hill to ensure payment reforms do not detrimentally impact access, quality, or the financial viability of providers and facilities that play an essential role in the health care delivery system.

For more information, read APTA's October 9 comments to MedPAC regarding its recommendation to implement a 50% MPPR policy and reduce the therapy cap amount. Additionally, APTA's comments submitted in September address MedPAC's various long- and short-term proposals to reform the Medicare therapy benefit.