The final 2014 Medicare physician fee schedule rule (.pdf) released by the Centers for Medicare and Medicaid Services (CMS) sets the therapy cap amount on outpatient services at $1,920. In addition, the rule announces a 20.1% reduction in Medicare payment rates for physical therapists (PTs), physicians, and other health care professionals—a cut linked to the flawed sustainable growth rate (SGR) formula being discussed in Congress.
The new rule also updates payment amounts for physical therapists, physicians, and other health care professionals, makes changes to the Physician Quality Reporting System (PQRS), and revises other payment policies.
The final rule’s 20.1% reduction is to the conversion factor used to determine Medicare payment rates, a reduction generated by the flawed SGR formula. Since 2003, Congress had enacted legislation preventing the reduction every year. The president’s budget calls for averting these cuts and finding a permanent solution to this problem, and Congress is currently working to address an alternative payment method that would include permanent repeal of the SGR. If Congress does stop the 20.1% payment cut, the aggregate payment for outpatient physical therapy services due to changes in practice expense, work, and malpractice relative value units would remain unchanged from 2013.
Aside from setting the therapy cap at $1,920 for 2014, the rule makes changes to payments to critical access hospitals (CAHs) beginning January 1, 2014. Despite strong objections from APTA and other stakeholders, the rule subjects CAHs to the therapy caps, as well as any potential extension of the therapy cap exceptions processes, in the same manner as other providers of outpatient therapy services. The therapy cap automatic exceptions process and the manual medical review process, applicable to outpatient therapy expenditures exceeding $3,700 per beneficiary, will expire on December 31, 2013, unless Congress acts to extend them. APTA is working aggressively to have Congress address the therapy cap through repeal or extension of the exceptions processes.
CMS has finalized its proposal, supported by APTA, to require that individuals performing “incident-to” services in the physician’s office must meet any applicable state requirements, including licensure. This would enable the federal government to recover funds paid if services are not furnished in accordance with state law.
PQRS will see major changes for 2014. Physical therapists, physicians, and other eligible professionals will be able to avoid the 2016 2.0% PQRS penalty by reporting at least 3 individual measures via claims or registry for 50% or more of eligible Medicare patients in the 2014 reporting period. Though opposed by APTA and other stakeholders, CMS will increase the number of PQRS quality measures that providers must report either via claims or registry from 3 to 9 to qualify for the 0.5% bonus payment in 2014. CMS will maintain the current 12-month calendar year reporting period for the PQRS program but will eliminate the option to report on measures groups via claims.
APTA submitted extensive comments in response to the proposed rule that was issued in July 2013. The final rule with comment period will appear in the December 10 Federal Register. APTA will post a detailed summary of the final rule shortly.
Congressional discussions on SGR and therapy cap repeal will be taking place soon. Join APTA's grassroots efforts to call for an end to both flawed policies on December 2. Find out how to make your voice heard.
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