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Legislation introduced to mitigate cuts
The fight isn’t over yet for elimination of — or at least revisions to — a new Health Care Financing Administration (HCFA) policy that limits Medicare Part B annual expenditures on nonhospital rehab services to $1,500.
Both the Alexandria, VA-based American Physical Therapy Association (APTA) and the Bethesda, MD-based American Occupational Therapy Association (AOTA) are lobbying hard for legislation that allows exceptions to the $1,500 annual cap on outpatient rehab services, and are urging their members to do the same. Meanwhile, providers affected by the cap are making substantial changes in their practices.
The new HCFA policy, which took effect Jan. 1, was passed as part of the Balanced Budget Act of 1997. It establishes a $1,500 annual limit per patient for occupational therapy and a combined cap of $1,500 for physical therapy and speech-language-hearing-services. It affects private practitioners, clinics, rehab agencies, skilled nursing facilities, and home health agencies (for services for non-homebound individuals).
Legislation introduced by Sen. Charles Grassley (R-IA) and Sen. Harry Reid (D-NV) in late February proposes exclusions for certain classes of patients from the therapy cap. It was pending at press time in the Senate Finance Committee, of which Grassley is a member. Specifically, the bill creates exemptions for:
• individuals who have more than one incident or diagnosis of need for therapy during a calendar year;
• individuals who have one or more diagnoses of illness, injury or disability which intensify their need for therapy in a calendar year;
• individuals who would be hospitalized if they did not receive therapy beyond the limit;
• other individuals whom the Department of Health and Human Services designates.
This category could include patients who have suffered a severe stroke or those with Parkinson’s disease, multiple sclerosis or compound or multiple fractures, according to a position paper released by AOTA.
"We think it’s a good prospect that we’ll see some action on it [the $1,500 cap] this year. Because there will be budget legislation this year, there will be something for us to attach these provisions to," says Fred Summers, associate executive director for professional affairs at AOTA.
But because the current rules took effect Jan. 1, rehab managers will have to live with the cap for now. What’s an administrator or therapist to do? Both AOTA and APTA are urging their members to write letters to congressional officials protesting the cap.
"We have evidence that 1% of Medicare ben eficiaries had already exceeded the cap by early March. This [$1,500 cap] will backfire on Congress because it will ultimately end up costing them more money. These patients [who exceed the cap] will take up space in nursing homes and hospitals if they don’t get the therapy they need to become functionally independent," says Jerry Connelly, senior vice president of APTA.
Providers interviewed by Rehab Continuum Report say that although it is too soon to assess the impact of the $1,500 cap, they have already taken actions to mitigate the future effects.
Riverside Rehabilitation Center in Plains, PA, for example, is now treating 40% fewer Medicare patients, says Frank Pugliese Jr., CEO at Riverside. In addition, Pugliese has met with every clinician at Riverside and has sent several supervisors to seminars about dealing with the $1,500 cap.
In addition, Riverside has stressed patient education and communication, Pugliese says. The clinic has drafted a letter explaining the $1,500 limitation that is given to every Medicare patient. When a patient is approaching the $1,500 limit, a therapist will sit down and discuss the patient’s medical and payment options. "We’re staying very proactive and keeping abreast of everything we possibly can. We’re doing everything we should be doing to practice good medicine," he says.
At Warm Springs Rehabilitation System in San Antonio, the hospital has brought two of its three free-standing clinics into the hospital because of the anticipated impact of the $1,500 cap, says James Ashbaugh, CHE, regional director of operations for the hospital. Because these two clinics are now physically located at the hospital, they are no longer subject to the $1500 cap. That strategy is not feasible to try for the third center, which is located in Del Rio, TX, a rural community. The hospital has installed a computer system to help track spending on Medicare patients so they can warn patients if they are approaching the $1,500 cap.
In addition, the system has talked with a nearby physical therapy practice about the possibility of referring patients to the practice once the cap is reached. The $1,500 limit is a per-facility limit, not a per-patient limit, Ashbaugh points out.
If you’re a free-standing facility considering linking with a hospital as a way around the $1,500 cap, Connelly of APTA says he advises against it. "HCFA hasn’t yet defined what exactly is a satellite facility for a hospital. It’s not as easy as it sounds, and it would alert the [Office of the] Inspector General and trigger compliance concerns."