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  • End to SGR and Therapy Cap Part of Wide-Ranging Medicare Package

    The House of Representatives and the Senate could reach agreement early next year on proposals to permanently repeal the flawed sustainable growth rate (SGR) formula and possibly end the therapy cap. These legislative packages are part of a shift in the health care system away from the current fee-for-service system and toward programs focused on quality outcomes. APTA has created a webpage with detailed information on the proposals.

    While an agreement looks possible, it will not be reached before the House and Senate adjourn for the holidays. In the meantime, Congress is expected to pass a 3-month SGR patch early next week to prevent a 20.1% cut to the conversion factor announced by CMS in the physician fee schedule and extend the current therapy cap exceptions process. This short-term fix would be effective January 1–March 31, 2014, and will give the House and Senate time to reach a final agreement on the SGR reform package. The Senate is expected to return on January 6 and the House on January 7. Congress will resume negotiations and begin discussing how to pay for the cost of the legislation.

    APTA has been a strong advocate for repeal of the therapy cap and SGR, and worked with committees in the House and Senate to include several APTA public policy priorities in the SGR reform packages now being discussed.

    Senate Proposal

    The Senate Finance Committee proposal includes a range of actions on the SGR and various Medicare extenders. The Senate plan:

    • Repeals the SGR formula and freezes baseline outpatient Medicare payments for 10 years (providers could receive payments above the base rate by participating in value-based incentive programs and transitioning to alternative payment models).
    • Repeals the Medicare therapy cap effective upon passage of the legislation, eliminating the requirement for a KX modifier at $1,900 and the need for yearly extensions.
    • Keeps manual medical review at $3,700 through 2014, then transitions to a new medical review program in 2015. The new program would use prior authorization to allow therapists to request blocks of visits. The Secretary of Health and Human Services would determine the level at which prior authorization applies and what services are subject to review.
    • Calls for a new data collection system to replace current functional limitation reporting procedures to be operational in or around 2017.
    • Requires claim forms submitted in 2015 to indicate whether the outpatient therapy services provided were rendered by a physical therapist assistant (PTA).
    • Extends the 1.00 work floor for the geographic practice cost index (GPCI) through 2014. In 2015 the floor would become 0.995, and in 2016 and beyond, the floor would be set at 0.99.

    House Proposal

    The proposal passed by House Ways and Means Committee repeals the SGR formula but does not include a repeal of the Medicare therapy cap or changes to any other Medicare extenders. During the hearing, Reps Xavier Becerra (D–-CA) and Erik Paulsen (R-MN) spoke about the need to address the Medicare therapy cap in the final SGR reform package. ChairDavid Camp (R–MI) agreed that the Medicare extenders need to be addressed and said that he intends work on these issues as the SGR legislation moves forward in the House.

    The proposal passed by the House committee:

    • Repeals the SGR formula and allows for a 0.5% payment increase each year until 2017.
    • After 2017, launches a system to make providers eligible for payment increases through value-based quality incentive programs and alternative payment systems.

    No action can be taken on the reform package until both chambers return in 2014. APTA will continue to work with members of Congress and their staff to best position the profession throughout the legislative process.

    How You Can Get Involved

    APTA will continue to work with members of Congress to advocate for the profession and will be seeking your help to best position physical therapy throughout the legislative process. Members interested in joining APTA’s advocacy efforts to reform SGR and repeal the therapy cap can sign-up for PTeam.


    • Keep up the great work on The Hill!

      Posted by Bradley Grohovsky on 12/14/2013 9:35 AM

    • What about CAH hospitals? I heard the cap will begin starting Jan 1st.

      Posted by Paul Bracket on 12/14/2013 10:53 AM

    • Question: Will there be movement toward reduced payement for visits rendered by PTAs? Is future of PTA treatment - supervised by PTs - stable?

      Posted by Melinda Halford on 12/15/2013 11:29 AM

    • Thanks for all your hard work over many years. Looks like it might finally pay off and I can stay in business!

      Posted by Caroline Taylor on 12/15/2013 5:04 PM

    • What is the purpose of "Requires claim forms submitted in 2015 to indicate whether the outpatient therapy services provided were rendered by a physical therapist assistant (PTA)." Would it alter the payment for services?

      Posted by Randy Veroline -> =KS\=I on 12/16/2013 11:35 AM

    • Has there been any discussion of the MMPR? This has had a devasting impact on reimbursement this year closing many private practices.

      Posted by Tom Zeller on 12/16/2013 7:56 PM

    • Do you have any explanation on the fundamentals of value-based incentive programs and alternative payments models? Are there any details on how we are to request blocks in 2015?

      Posted by James Capps on 12/17/2013 7:17 AM

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