February 20, 2012

House and Senate Pass Bill to Avert Medicare Payment Reduction and Extend Therapy Cap Exceptions Process

This afternoon, the House and Senate passed the conference report for H.R. 3630, the Middle Class Tax Relief and Job Creation Act, which among other things addressed the anticipated 27.4% cut to Medicare Part B reimbursements and extended the therapy caps exceptions process through December 31, 2012.

In extending the therapy cap exceptions process, Congress added additional safeguards, including

  • the use of an NPI for the physician reviewing the need for therapy
  • requirement for use of the KX modifier on claims above the cap
  • requirement for medical manual review when therapy expenditures hit $3,700 (combined physical therapy/speech-language pathology) for services furnished on or after October 1, 2012.

The bill will temporarily apply the therapy caps and exceptions to hospital outpatient departments for services provided starting October 1, 2012, and ending December 31, 2012.

The legislation will require two reports: a MedPAC report on how to improve the outpatient therapy benefit and a General Accounting Office report on the effectiveness of the manual medical review process.

Additionally, by January 1, 2013, the legislation requires Centers for Medicare and Medicaid Services (CMS) to implement a claims-based strategy to collect data on patient function so that the agency can better understand the patient's condition and outcomes. Data collection shall include "patient function during the course of therapy services in order to better understand patient condition and outcomes."

It is anticipated that CMS will provide additional information on the new requirements. For more information on the legislation, please contact Ingrida Lusis, ASHA's director of federal and political advocacy, at ilusis@asha.org. Questions related to CMS implementation should be directed to Lisa Satterfield, ASHA's director of health care regulatory advocacy, at lsatterfield@asha.org.

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