Uncapped: Medicare’s Therapy Cap And The Bipartisan Budget Act Of 2018

By Megan Valenzano, PT, DPT, GCS

Director of Regulatory Affairs & Documentation Review

On February 9, 2018, the Bipartisan Budget Act of 2018 was signed into law. Most clinicians know this legislation as the law that permanently repealed Medicare’s Outpatient Therapy Cap. But there was more to the legislation that will impact the entirety of the profession. Here’s what you should know:

A HISTORICAL PERSPECTIVE

There has always been a delicate balance between Medicare coverage for therapy services and ensuring that Medicare can actually pay for the services being provided. Maintaining a balanced budget and the ongoing solvency of the Medicare Trust Fund appear to be top priorities of Congress and the Department of Health and Human Services. In 1997, Congress tried to address this issue by imposing a $1,500 cap on outpatient therapy services.

Since then clinicians across the country have participated in advocacy events, written letters, and spoken to legislators about reasons to repeal this therapy cap. Year after year saw extensions to moratoriums or an exceptions process as Congress tried to figure out how to ensure beneficiaries could receive the proper therapy services .

The passage of the Bipartisan Budget Act of 2018 includes what some refer to as a repeal of the Medicare Therapy Cap. However, in its truest form, it provided a permanent exceptions process that allows providers to treat patients above a set dollar amount as long as they meet certain requirements.

WHAT DOES THE LONG-TERM FIX MEAN?

There will continue to be a combined cap for physical therapy and speech-language pathology, and a separate cap for occupational therapy. Medicare will continue to update the therapy cap amount as they have done every year. This amount typically reflects an increase of anywhere from $20 to $40. Currently this amount is set at $2,010 for PT and SLP and $2,010 for OT.

Clinicians can continue to treat above this amount as long as they can support the medical necessity of their care and apply the appropriate modifier to their billing.

The other stipulation is that care that goes above $3,000 may be subject to post-payment medical review. Congress has allowed Medicare some flexibility in this area. They have provided some guidance on what may trigger manual medical review but have largely left it up to the Centers for Medicare and Medicaid Services and its regional carriers to determine what additional triggers would cause a clinician’s claims to go through medical review. The other caveat: Medicare contractors were not provided any additional funding to conduct these reviews.

OTHER IMPORTANT TAKEAWAYS

To pass a long-term fix to the Therapy Cap, Congress also faced the daunting task of how to pay for the care. This was the long-standing issue in creating a true fix for the Therapy Cap. While downstream costs can be lowered by keeping Medicare beneficiaries healthy and at home, Congress doesn’t have data to support this. So they had to figure out other ways to save money.

This was accomplished in multiple ways. However two legislated changes should be highlighted:

• A mandate to change the Home Health Prospective Payment system, no later than January 1, 2020. You can learn about the HH PPS from gov.
• Paying for services provided by PTAs and COTAs at 85 percent of the Medicare physician fee schedule beginning in 2022.

PROPOSED CHANGES TO HOME HEALTH

In 2017 home health providers advocated against the Home Health Groupings Model (HHGM), Medicare’s first attempt to design a new payment model that focused on patient characteristics and removed amount of therapy as a partial determinant of payment. Providers expressed concerns that implementation of HHGM would negatively impact the provision of therapy services to beneficiaries under the Part A Home Health Benefit. The industry was successful at the time, and CMS decided not to move forward with the HHGM.

Within the Bipartisan Budget Act of 2018 was a mandate from Congress that the home health payment system be restructured to include some of the specifics of the HHGM. The system would look at patient factors as a determinant of care rather than actual provision of services and completely remove number of therapy visits as a determinant of payment. Congress also mandated that CMS propose a system that moves from 60-day to 30-day episodes.

CMS is already actively engaging stakeholders in a redesign of the payment system. In their proposed rule for 2019 (released July 2, 2018), they include details of a new Patient Driven Groupings Model (PDGM). Anyone interested in telling CMS their opinion on the model has until August 31, 2018, to submit a formal comment on the proposal.

A LAST MINUTE CHANGE FOR PTAs AND COTAs

In a surprise turn, Congress decided to add another monetary save to the legislation, which meant reducing reimbursement for PTAs and COTAs starting in 2022. This 85 percent differential is comparable to how CMS compensates services provided by physician assistants. This change to reimbursement will require other changes to how claims are processed, including a means of designating the appropriate provider. Expect to hear more on this from CMS and the professional associations.

IMPACT ON DELIVERY OF CARE

The continued push to provide care by the most cost-effective means is highlighted in this legislation. Providers across the continuum must continue to evaluate if they are providing the right services at the right time to the right patient. Payment redesign will force hard questions.

What services does this patient actually need based on their condition and clinical presentation?

Does this treatment need to be provided in a skilled nursing facility?

Can this treatment be provided in home health?

Does this patient need everything included in home health, or could they be adequately served in outpatient?

As active participants in healthcare reform, PTs, OTs, and SLPs need to carefully consider their recommendations for ongoing care. We must make recommendations that balance the needs of the patient with both the immediate and long-term costs to the healthcare system.