Therapy cap freeze could offer relief

2004 moratorium possible

Senate and House conferees on the Medicare prescription drug bill agreed Sept. 9 to include a one-year moratorium on the $1,590 outpatient therapy cap for 2004. But don’t give a sigh of relief yet. The moratorium was among the less controversial items discussed in conference to clear the way for issues still in dispute. That means that if the entire bill doesn’t go forward, neither does the moratorium.

"Essentially, as it’s currently placed, if there is a deal on the prescription drug legislation, the cap should be part of it," says Dave Mason, vice president for government affairs for the American Physical Therapy Association (APTA) in Alexandria, VA. "Nothing is final until everything is final."

The therapy cap went into effect Sept. 1, and will apply at least until Dec. 31. "The basic message is that the cap is in place, and providers need to be talking to beneficiaries about it. They will have to abide by CMS’s [the Centers for Medicare & Medicaid] program memorandum," Mason says. "At least for this year, the $1,590 cap is only for four months. It won’t squeeze as tight as it will over 12 months."

Christina Metzler, director of federal affairs for the American Occupational Therapy Association (AOTA) in Bethesda, MD, says the shorter time period this year will help some patients, but not all. "The people who will get hurt are the people with serious injuries. They will hit the cap pretty quickly," she says. "Someone with macular degeneration who can’t function at home might need occupational therapy twice a week for two months. That’s $2,200 already. There will be people who will hit this cap in the four-month period."

The AOTA estimates that 12% to 15% of patients who need therapy would exceed the cap on an annual basis and 5% to 10% will exceed it in the four-month period for 2003. "These situations will crop up, and people will have to make some unfortunate choices," she says. "For somebody who has a serious injury, four months is going to be their lifetime."

The AOTA advises providers to make sure patients are informed. Patients will have to do their own coordinating if they require both speech therapy and physical therapy, since those two services are grouped under the $1,590 cap. Patients get a separate $1,590 for occupational therapy.

Many patients and providers are confused, Metzler says. "This just reinforces that there is no good way to implement a bad law."

Another avenue for relief could come from a lawsuit filed in June against CMS in the District of Columbia District Court (American Parkinson Disease Association, et al. v. Tommy G. Thompson, No. 03-1378). U.S. District Judge Emmet Sullivan guided a settlement in which CMS agreed to delay implementation of the cap from July 1 to Sept. 1, giving more time to notify beneficiaries of the cap.

At the June 30 hearing, Sullivan appeared to side with the plaintiffs. According to the transcript, he said: "I mean, it almost amounts to me as a cruel hoax on those Americans who are truly the neediest, you know, those Americans who are disadvantaged, who are challenged in many ways, without notice. Now they have to bear a significant portion of Medicare expenses that they would not have to bear if the moratorium remained in place for a reasonable period of time."

Sept. 15, the plaintiffs went back to court to argue that the government had not kept its pledge to notify 90% of beneficiaries by Sept. 1. They suggested that beneficiaries be sent a special notice in October and November and asked that the cap be further delayed until Dec. 1. The government argued that their previous statement about notifying 90% of beneficiaries was only an estimate of what they thought they could accomplish in July and August, says Metzler, who attended the hearing.

"The judge was very concerned that the government was not able to figure out a way to notify all Medicare beneficiaries that their benefits were going to be changed," Metzler says. "He indicated a great deal of frustration with the government. As the judge put it, when the government wants to find you for tax purposes, they seem to be able to get in touch with you."

Sullivan was expected to issue a final ruling Sept. 18, but the hearing was delayed due to the effects of Hurricane Isabel. At press time, the hearing had not yet been rescheduled.

At best, however, the lawsuit will result in a one-year moratorium. "So in a year, we could be doing this again," says Mason of the APTA.

Legislation to repeal the cap is still pending. Identical bills introduced in March by Sen. John Ensign (R-NV) and Rep. Phil English (R-PA) are gaining steam in Congress, Mason says. The House bill now has a majority of representatives as co-sponsors, and 50 senators have signed on. "It does kind of indicate that there is a lot of understanding on the Hill that this is a very bad policy that needs to be replaced," he says. "The problem we continue to run into, though, is that the Congressional Budget Office says it costs in the neighborhood of $7.5 billion over 10 years to get rid of it, and in a deficit situation like we’re facing now, it’s going to be very hard to find that kind of money."

Mason says the budget situation will force the need for a creative solution to get rid of the cap. "Unless we come up with a way to pay for it, a lot of Congress members who agree that the policy should be repealed will probably vote against it not wanting to add another $7 billion to the deficit," he says. "We’ve probably won the policy debate, but we haven’t necessarily won the budget debate. It’s a difficult box to get out of."

Need more information?

Dave Mason, Vice President for Government Affairs, American Physical Therapy Association, 1111 N. Fairfax St., Alexandria, VA 22314-1488. Telephone: (703) 684-2782.

Christina Metzler, Director of Federal Affairs, American Occupational Therapy Association, 4720 Montgomery Lane, P.O. Box 31220, Bethesda, MD 20824-1220. Telephone: (301) 652-2682.