As 2006 unfolds, physical therapists (PTs) face a significant hurdle—working under the restriction of the Medicare Therapy Cap, which went into effect January 1, 2006. This limits Medicare beneficiaries to one combined $1,740 cap (annual, per beneficiary) for physical therapy and speech language pathology, and a separate $1,740 cap (annual, per beneficiary) for occupational therapy.

The therapy cap applies to outpatient therapy services provided by rehabilitation agencies, physician’s offices, comprehensive outpatient rehabilitation facilities, skilled nursing facilities (Part B), home-health agencies (Part B), and PTs in private practice. It does not apply to services directly from or arranged by hospitals. If the patient has already met his/her Medicare deductible, Medicare will pay 80% of the $1,740 and the beneficiary will be responsible for the remaining 20%.¹

What do these limits mean for PTs? Possibly, a new practice code for Medicare patients that involves enhanced communication about payment of services and comprehensive treatment plans under restricted visits. “We provided all of our [Medicare] clients with a letter that clearly states the current details of the therapy cap, what patients can do, and how we are going to handle it as a provider. We also encouraged clients and their families to contact their legislators,” says Kevin Lockette, PT, owner of Ohana Pacific Rehabilitation Services, Honolulu and Kailua, Hawaii. According to Lockette, 65% of his clients will be affected by the therapy cap. “Our services are designed for the more frail elderly and for clients with spasticity, including patients with recent intrathecal baclofen pumps, so it will be challenging to meet the needs of this special group.”

The therapy cap was first introduced in the early-to-mid 1990s, but Congress passed moratoriums on its enforcement until now. The untimely end of the latest moratorium is worrisome. The US Department of Labor’s Bureau of Labor Statistics states that the growing elderly population is particularly vulnerable to chronic and debilitating conditions that require therapeutic services. Also, the Baby Boomer generation is coming into the prime age for heart attacks and strokes, increasing the demand for cardiac and physical rehabilitation.² In addition, the Centers for Disease Control and Prevention expects that the number of people age 65 and older in the United States who have arthritis or chronic joint symptoms—conditions often treated by physical therapy—will double to more than 41 million by the year 2030.3

Thankfully, there is a chance that the current Medicare therapy cap will not be the last word. The American Physical Therapy Association is urging the Centers for Medicare & Medicaid Services to develop and implement an exceptions process that will allow patients to receive clinically appropriate care that exceeds the therapy cap.

“I am not sure that [the current Medicare Therapy Cap] will be around that long, since it is such an arbitrary piece of legislation. My gut tells me that there will be some clients who will suffer in the interim. However, the fact that it is not a good piece of legislation, compounded by the fact that it is an election year, makes me hopeful that there will be a better alternative before the year’s end,” Lockette says. “The key is to educate the patients and to push the legislators to look at this issue.”

References

1. The American Physical Therapy Association. Therapy Cap FAQ. Available at: http://www.apta.org/AM/Template.cfm?Section= Therapy_Cap&Template=/TaggedPage/TaggedPageDisplay.cfm&TPLID= 188&ContentID=18639. Accessed January 15, 2006.

2. Bureau of Labor Statistics, US Department of Labor. Occupational Outlook Handbook, 2006-07 Edition. Washington DC, Bureau of Labor Statistics. Available at: http://www.bls.gov/oco/ocos080.htm. Accessed January 15, 2006.

3. HealthLink, Medical College of Wisconsin. As “Boomers” Age, Arthritis Prevalence Jumps. Available at: http: //healthlink.mcw.edu/article/1031002542.html. Accessed January 15, 2006.