April 18, 2018 | Net Health

3 Minute Read

What the Therapy Cap Repeal Means


In early February 2018, President Trump signed a two-year budget deal that ended a second, brief government shutdown within the first two months of the year. In that massive two-year budget deal was a win for millions of Medicare beneficiaries — the repeal of permanent caps on various forms of therapy under Medicare Part B.

Medicare beneficiaries aren’t the only ones thankful for the change; the repeal was widely applauded across the post-acute care industry, spanning interests from AARP to the American Physical Therapy Association (APTA).

What therapy types are affected?

The repeal affects three therapy types: physical therapy (PT), occupational therapy (OT) and speech-language therapy (SLP).

According to AARP, nearly 6 million Americans on Medicare used outpatient therapy services in 2015. But many individuals were unsure as to whether Medicare would cover the costs to recover from medical incidents, such as falls, or to help them cope with chronic illnesses.

“Millions of vulnerable patients who need occupational, physical and speech-language therapy will now be protected from an arbitrary limit on how much Medicare will pay for needed therapy,” said Nancy LeaMond, AARP’s executive vice president and chief advocacy and engagement officer in a press release following the budget deal.

Repealing therapy caps is significant

The caps had previously been in place for 20 years, with caps for physical and speech therapies set at $2,010, combined, and $2,010 for occupational therapy—per patient per year.

Prior to the budget deal, Congress would occasionally pass legislation that raised the cap limits. However, those short-term solutions were often deemed wasteful, according to the APTA.

Thanks to the new budget deal, elderly Americans no longer have to worry about affording essential therapy services. Because of that peace of mind, more Americans will be able choose outpatient therapy services over long-term care facilities or nursing homes, leading to lower cost settings of care.

Potential problems

While many organizations and therapy patients are celebrating the good news, there is some potential bad news on the therapy side. The way Congress chose to offset the cost of the permanent—nearly $6.5-billion—expense was to include a payment differential for services provided by physical therapist assistants (PTAs) and certified occupational therapy assistants (COTAs). According to the revised law, both assistant groups are set to be paid at 85% of the Medicare physician fee schedule.

The good news is that the payment differential does not take effect until Jan. 1, 2022. The future deadline will give various stakeholders, including the Centers for Medicare and Medicaid Services, time to work together to develop policies that are favorable to PTAs and COTAs.

With these changes on the horizon, therapy providers will need to make sure they stay up to date with new policies and procedures. EMR providers can offer support and guidance by providing regulatory expertise and through the technology itself—by continuously updating their software to ensure providers are prepared for ongoing changes in therapy, Medicare and more.

To learn how outpatient clinics can use their data to improve productivity, maximize reimbursement and attract and retain new clients, read our guide: An Outpatient Therapy Clinic’s Guide to Operational Excellence

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