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The U.S. House of Representatives adopted the conference agreement on the Deficit Reduction Act (DRA), S. 1932, which was passed late last year by the Senate. The bill includes a provision authorizing a new exception process for beneficiaries who require services in excess of the $1,740 Medicare outpatient therapy cap. The House vote sends the legislation to President Bush. Once the bill is signed into law, the Centers for Medicare and Medicaid Services (CMS) will be authorized to implement the new exception process.
As earlier reported, CMS outlined its proposed exemption process in a letter to Congress. CMS indicated that its exceptions policy will be retroactively applied to all outpatient therapy services provided since January 1, 2006. While details of the exceptions process have not been published, CMS has stated that they agency may designate certain diagnosis as automatically exempt from the cap. In those cases where the diagnosis has not been identified for automatic exemption, and the beneficiary needs additional services above the cap, the provider will have the opportunity to request additional services through the CMS contractor. The DRA requires that the contractor respond to these requests within 10 days.
ASHA will provide more detailed information on the exceptions process as it becomes available. To view the CMS letter outlining its proposed exemption process, please visit ASHA's Therapy Cap Advocacy Center.
The DRA also froze Medicare reimbursement rates for 2006 at the 2005 levels, avoiding the 4.4% cut mandated by the sustainable growth rate formula (SGR). CMS has reported that they will begin reprocessing any claims for 2006 services that were submitted prior to the bill's enactment. The SGR is used to determine the annual Medicare conversion factor update. Prior to congressional changes to the update formula, Medicare fees were scheduled to have been reduced by as much as 26% over the next 5 years.
The bill extends the phase-in of the so-called "75% rule" for inpatient rehabilitation facilities (IRFs) over 3 years. The 75% rule allows CMS to disqualify a rehabilitation facility from participation in the Medicare program if, annually, less than 75% of its admitted patients (from the current 50%) do not fall within one of 13 diagnoses/conditions. The determination rate is set at 60% for 2006, and subsequently 65% in July 2007, and 75% in July 2008. ASHA collaborated with other organizations in advocacy campaigns last year that led to the reversal in the Medicare fee schedule cuts and extending the 75% phase-in.
For more information about CMS implementation of the DRA, contact Ingrida Lusis, ASHA's Director of Health Care Regulatory Advocacy, via e-mail at ilusis@asha.org or by phone at 800-498-2071, ext. 4482. For more information about the passage of the DRA, please contact Reed Franklin, ASHA's Director of Federal and Political Advocacy, via e-mail at rfranklin@asha.org or by phone at 800-498-2071, ext. 4473.
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