Providers Ask Congress to Renew Expiring Medicare Reimbursement Provisions

BNA’s Health Care Daily Report™ sets the standard for reliable, high-intensity coverage of breaking health care news, covering all major legal, policy, industry, and consumer developments in a...

By Steve Teske  

Provider groups Sept. 21 asked Congress to renew expiring Medicare reimbursement policies that carry a price tag of at least $2 billion per year, saying extending the provisions gives them the best chance to continue serving beneficiaries while awaiting broader payment reforms.

Testifying before the House Ways and Means Health Subcommittee, hospital representatives, physicians, and physical therapists urged Congress to extend a host of expiring Medicare reimbursement provisions that address particular needs of patients and providers.

The subcommittee is targeting nine Medicare reimbursement policies that expire between Oct. 1 and July 1, 2012, covering a host of providers, including hospitals, skilled nursing facilities, ambulance services, clinical laboratories, and physicians.

Not Much Money, But Patients Would Be Hurt

While the amount of money allocated under some of the provisions seems small compared with Medicare's overall spending, failing to extend them would hamper providers’ ability to serve patients, the subcommittee was told.

The American Hospital Association “urges the [sub]committee to recognize that the circumstances that necessitated these provisions continue to exist, and therefore it is appropriate that they be extended,” AHA President Richard Umbdenstock testified.

Also included in the discussion was the need to cancel a 30 percent reimbursement cut in Medicare pay to physicians scheduled to take effect in 2012. Extenders provisions have often been attached to Medicare doctor fix legislation.

It is unclear how Congress will move an extenders package this year. Some lawmakers have said it could be included in a legislative package drafted by the Joint Select Committee on Deficit Reduction or as part of a separate bill to be approved by Congress by the end of the year.

Therapy Caps Under Focus Again

A recurring provision that often is included in an extenders package involves the therapy cap on outpatient therapy services furnished in private practice settings, physician offices, and skilled nursing facilities, among other sites. The therapy cap is currently set at $1,870 per beneficiary per year for physical therapy and speech-language therapy and $1,870 per year for occupational therapy.

The exceptions process to the therapy cap expires on Dec. 31, and if it is not extended, beneficiaries exceeding the cap could lose coverage for multiple conditions. Congress has extended the cap five times.

Justin Moore, vice president for government and payment advocacy at the American Physical Therapy Association, testified that 640,000 Medicare beneficiaries would exceed the cap by Dec. 31 unless the exceptions process is renewed.

He recommended Congress adopt a refined exceptions process for 2012 through 2014 to give the Centers for Medicare & Medicaid Services time to develop a per-visit claims system by 2015.

Opposition to Extensions

Bruce Steinwald, president of Bruce Steinwald Consulting, took issue with providers that most expiring provisions should be extended, saying the provisions under examination cost $2.5 billion annually and $25 billion over 10 years—funding Medicare cannot afford to spend.

Steinwald testified that the extensions also hurt the integrity of Medicare's payment system by undermining providers’ incentives to be efficient and exacerbate the incentives of Medicare's fee-for-service payment systems to increase the volume and complexity of services.

Steinwald said Congress should focus on reforming Medicare's payment system rather than continuing outdated policies that must be addressed yearly.

“Medicare's payment formulas have a limited number of checks and balances to ensure the services it pays for are ‘reasonable and necessary’ for patient care,” he said. “It makes little sense to further weaken these restraints on spending by fostering exceptions to Medicare's payment rules.”

Subcommittee Chairman Wally Herger (R-Calif.) said some of the extender provisions were originally considered short-term or one-time payment adjustments, and Congress has often extended them without a closer examination about their effectiveness or whether there is a continued need.

“Just because Congress must act, [it] does not mean it should do so blindly,” he said.

Subcommittee ranking member Fortney Pete Stark (D-Calif.) said some of the provisions, such as the therapy cap exceptions process, “ensure critical access to needy Medicare beneficiaries. Others are provisions that were enacted to address a perceived payment problem for a particular provider at a certain time and may not be necessary anymore.”

Information on the hearing is available at