What to expect with the therapy caps repealed

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James M. Berklan
James M. Berklan

Don't ever let Congress plan your next party. That's my sincere recommendation.

I can see it now: They would find a big, delicious cake; hire a glorious cast of “Happy Birthday to You” singers; and make sure all your friends would be there.

And then they would hand you a bill for it while the party's still going on.

That's what it feels like now, in the wake of the repeal of the Medicare Part B therapy caps. It's something providers had yearned for, literally, for years. It actually happened, just as congressional staffers from both parties said it could.

And then, splat.

Also in the package was nearly $2 billion worth of Medicare payment cuts over the next 10 years. Yes, the present came with an, ahem, bill attached.

Talk about typical federal government moves. But a win is a win, even if it's offset by yet another backhanded budget cut.

So what will life be like without the ever-looming threat of therapy caps? Here are a few things you might not have realized.

The new measure was made retroactive to Jan. 1, meaning that once the medical records and paperwork are set straight, no one should have been harmed after the exceptions process expired on the first day of this year. Providers should re-submit any claims that were denied.

Providers still need to submit KX modifiers for services that go beyond the most recent cap levels of $2,010 for occupational therapy services and $2,010 physical and speech therapy combined. Officials say this is necessary to show necessity of services. KX-less claims above those amounts will not be paid.

One of the linchpins to tossing the therapy caps was a lowering of the threshold for targeted medical reviews. Claims over $3,000 are now eligible for review, down from the previous $3,500. Congress approved $5 million to conduct such reviews, which will be triggered when patterns in certain criteria are discovered.

The new law actually prohibits recovery audit contractors from conducting the medical reviews. CMS will designate others to do them.

Starting Jan. 1, 2022, pay for Part B work performed by PT and OT assistants will be cut by 15%. This part has rural providers in particular concerned, due to expected labor supply challenges. Larger SNFs could see their Part B payments fall by about 3% to 6% due to this provision, AHCA says.

Part B therapy HCPCS billing code updates will be halved to 0.25% in calendar 2019. That projects to about a $350 loss per nursing facility, AHCA numbers crunchers said.

The caps came into play in 1999 but were enforced only partially for the first six years. Then in 2006, a sweeping exceptions process came into being and exempted most nursing home residents.

Now, the annual stress and uncertainty over whether the caps or an exceptions process would be in play are gone.

Had the caps stayed in place, they would have erased about about 37% (or $811 million) of Part B therapy reimbursements this year, AHCA officials said.

Don't tell Congress. The party-poopers still might want to find a way to get it back.

Follow Editor James M. Berklan @JimBerklan.

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.