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Because of an impasse on the federal budget bill, Medicare beneficiaries receiving Part B services in provider settings other than hospitals will once again be subject to a financial limitation for therapy services beginning January 1. All providers under the Medicare fee schedule will see nearly a 5% cut in their reimbursement rates. Congress is not scheduled to reconvene until February to reconsider pending legislation that would establish an exemption process for the therapy caps and essentially freeze the fee schedule at 2005 rates.
As a result, beginning January 1, 2006 Medicare officially reinstated the per-beneficiary, outpatient therapy services cap for combined speech-language pathology and physical therapy services of $1,740 per year and a separate $1,740 cap for occupational therapy. The Centers for Medicare and Medicaid Services (CMS) has issued instruction on the implementation of the therapy caps [PDF].
EXEMPTION PROCESS POSSIBLE
If Congress reinstates a therapy cap moratorium this year and/or mandates changes to the Medicare fee schedule, it is unclear whether CMS will act retroactively on reimbursement prior to congressional action.
The Deficit Reduction Act (DRA) legislation, agreed to during a House/Senate conference, called for the reimplementation of the therapy caps with an exemption process allowing Medicare patients to receive medically necessary services beyond the $1,740 cap. While not a perfect remedy, if enacted it will provide the authority for a critical exceptions process to the therapy caps. The legislation additionally instructs CMS to implement code edits for outpatient therapy services to eliminate clinically illogical combinations of procedure codes and to control inappropriate billings, such as billing of speech-language pathology codes on a time-increment basis, rather than per procedure.
Using data from ASHA's National Outcomes Measurement System (NOMS), ASHA has been working over the last year with CMS and the General Accountability Office (GAO) on which patient conditions and SLP services would likely go over the cap, should be deemed medically necessary, and should be exempted. ASHA is urging CMS to implement a simple and effective exception process that will allow patients to receive clinically appropriate care exceeding the cap. ASHA continues to work with Congress to repeal the therapy cap and create coverage and payment policies that will assure no Medicare beneficiary is denied the care they need.
COMPLYING WITH THE THERAPY CAP
In the interim, below are a few important steps to take in providing services to your Medicare patients under the therapy cap:
1) Examine your intake process. Ask your patients if they have received physical therapy services during the same calendar year at any other location. Keep in mind that physical therapy and speech-language pathology services share the same $1,740 cap. Verify this information by accessing the patient's accrued amount of therapy services from the "ELGA" screen inquiries into Medicare's Common Work File. For more information, see CMS Transmittal 759. If you do not have access to these electronic inquiries, call your Medicare carrier or intermediary.
2) Estimate the number of visits before a Medicare patient exceeds cap. Take the approximate amount of your charges and divide them into $1,740 to estimate the number of visits before a given Medicare patient is likely to reach the cap. Keep in mind that the $1,740 includes both the amount Medicare pays and the beneficiary co-pay, for example, 80% of $1,740 is $1392. Beneficiary co-pays would constitute the remaining $348 of $1,740 (these figures apply to a participating provider).
3) Notify your Medicare beneficiaries who are subject to cap. Please inform Medicare patients and their families early on about their options once they exceed the cap amount: a) to either receive speech-language pathology therapy services in an outpatient hospital setting, or b) to pay out-of-pocket for your services. Please note that patients who are residents of the certified portion of a skilled nursing facility may not use outpatient hospital services.
4) Give Medicare patient a Notice of Exclusion of Medicare Benefits (NEMB) form if you estimate services beyond the cap amount will be needed. The NEMB notifies your patients in writing that the remainder of the services they are about to receive from you are statutorily excluded from the Medicare benefit and they will need to accept financial liability for all remaining visits. Forms and more information can be found on the CMS Web site.
5) Provide contact information for hospital outpatient therapy services at a nearby hospital if the patient cannot afford to pay out-of-pocket or declines to do so for the remainder of their visits. Hospital outpatient services are not subject to the cap under current law.
6) Check ASHA's Web site frequently for updates on the new exceptions process pending congressional approval and CMS instructions. New information will be provided on the ASHA Web site and in the ASHA Leader. ASHA's Therapy Cap Advocacy Center provides up-to-date information on congressional and CMS actions.
FEE SCHEDULE FIX FOR 2006
The conversion factor used for determining all rates under the Medicare fee schedule will be reduced by 4.4%. ASHA has calculated the 2006 rates for SLPs and Audiologists. Members may view the Analysis of 2006 Medicare Fee Schedule on ASHA's Web site.
The federal budget agreement, if passes, would also freeze Medicare reimbursement rates for 2006 at the 2005 levels, avoiding the 4.4% cut mandated by the sustainable growth rate formula (SGR). The SGR is used to determine the annual Medicare conversion factor update. Without congressional changes to the update formula, Medicare fees could be reduced by as much as 26% over the next 5 years. ASHA collaborated with other organizations last year to find a fix to the SGR for positive updates to the fee schedule.
For more information on the implementation of the therapy caps, please contact Ingrida Lusis, Director of Health Care Regulatory Advocacy, at 800-498-2071, ext. 4482 or at ilusis@asha.org. For information on congressional action, contact Reed Franklin, Director of Federal & Political Advocacy, at ext. 4473 or at rfranklin@asha.org.
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