The return of Medicare Part B therapy caps

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Starting today, a nursing home resident may opt out of physical therapy because she has exceeded Medicare’s payment limit. And a nursing home may deliver therapy knowing it will not get paid for it.

While such scenarios may seem a little extreme, that’s the plausible effect of Medicare Part B outpatient therapy caps, which take full effect today.

Most providers were caught off-guard a bit by the latest turn of events. The Senate was expected to pass a Medicare bill by the Fourth of July recess that would have reauthorized an exceptions process for the caps—but it didn’t act in time.

“I don’t think people expected it to end the way it did,” said Marsha Greenfield, senior legislative counsel for the American Association of Homes and Services for the Aging.

The last time providers experienced the cap was in 2006—prior to the onset of the exceptions process, which shielded residents from the caps and was retroactive to the beginning of the year. The caps also went into effect in 2003—and then only for three months. Prior to that, caps were in place in 1999.

For those who are not familiar with Part B outpatient therapy caps, the caps place annual limits on what Medicare will spend for outpatient therapy. They amount to $1,810 on speech and physical therapy combined and $1,810 on occupational therapy. To make matters worse, while the caps start today, they include any therapy that contributed to the limits starting back in January.

The caps were first introduced in the Balanced Budget Act of 1997 (back then, the caps were $900). Several moratoria, and most recently the exceptions process, however, have served to protect residents from the regulation.

Here’s a hypothetical situation of what the caps mean:

Harold, an 85-year-old, broke his hip in January and went to a nursing home for outpatient therapy for six to eight weeks. Total cost of the rehab? About $1,500. Just two weeks ago, Harold had a stroke. He needs more therapy, but he will soon exceed his limit. What does he do?

That is the $10,000 (er, $1,810) question—and the reason why providers have been fighting so hard against the 11-year-old policy.

Let’s hope that the Senate comes back from the Fourth of July refreshed and ready to again knock out the policy before it does any real damage.

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Daily Editors' Notes

McKnight's Daily Editors' Notes features commentary on the latest in long-term care news and issues. Entries are written by Editorial Director John O'Connor, Editor James M. Berklan, Senior Editor Elizabeth Newman and Staff Writer Marty Stempniak.