Medicare Payments for Therapy: No Simple Matter

Medicare payments for physical therapy seem like a routine topic. But the saga of payments for PT—and for occupational therapy and therapy for speech-language pathology—is anything but.

Early 2018 will see these Medicare reimbursements for rehab therapists put under the spotlight, at least in Medicare Land. Strict annual limits on how much spending for therapy each beneficiary is entitled to—known as caps—kick in on Jan. 1.

A national therapy association official sent me the “War and Peace” of the therapy payments. The congressional back and forth from 1972 to 2015 is on six pages, front and back, tiny letters.  

The heart of the story occurred 20 years ago when Congress, in a money-saving attempt, created a cap or monetary limit system for the three therapies. 

But since then, the caps, for the most part, haven’t been in effect.

Congress has allowed the caps to take effect four times, Heather Parsons, federal affairs director for the American Occupational Therapy Association, told me. However, the caps have never been in effect for more than two months, she said.

In 2006, Congress established an exceptions process as a way for beneficiaries to exceed the caps. The process allows beneficiaries to be granted an exception and receive as much rehabilitation services as considered medically necessary.

Congress has continually extended the exceptions process since then, with the latest due to expire on Dec. 31.

With Congress not in session, the caps take effect Jan. 1. That means beneficiaries will have a limit of $2,010 in 2018 for occupational therapy and another $2,010 limit for physical therapy and speech-language pathology combined.

Beneficiaries with high services needs could exceed the cap by the end of January, Parsons told me. They would then have to pay for therapy out-of-pocket.

What might happen after Congress returns is anyone’s guess.

But if past is prologue, Congress will again override the caps in the early part of the year, either temporarily or permanently.

Stay tuned.

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