Let’s get up to date regarding changes that occurred yesterday with the Therapy Cap and the SGR (Sustainable Growth Rate).

A little history…

The Therapy Cap was created in 1997 when Congress passed the Balance Budget Act. The Cap imposes a limit on the Medicare Part B therapy services provided in all settings that bill using the Physician Fee Schedule for Part B services, including Skilled Nursing Facilities.

The Sustainable Growth Rate (SGR) formula is the calculation used for reimbursement for Medicare Part B services, used in determining what the services will pay.

As you all know, the battle with the Therapy Cap has been going on since its inception and our professional associations (APTA, AOTA, ASHA) have been working hard to end it. The “exceptions process” that was created out of alternate legislation is set to expire March 31st which would put the Cap back in full force in all therapy settings (except outpatient therapy in hospitals).  Currently, the exceptions process allows for the continuation of medically necessary skilled therapy services beyond the initial Cap threshold of $1,940 for PT/SLP combined and $1,940 for OT, through to the secondary $3,700 threshold where the manual medical review exceptions process kicks in. The SGR would also change and would result in a 21% cut in payments to Medicare providers, including physicians and therapists.

Congress has been working on long term solutions to both of these issues and our Associations have been working on measures to repeal both the SGR and Medicare Therapy Cap vs continuing to patch problems with quick and temporary fixes. As therapy providers, we recognize the impact that the Therapy Cap has and the limitations it places on this vulnerable population. We have all had residents in need of services that were impacted by the arbitrary cap. Think of the newly admitted resident that did not have a 3 day qualifying stay who needs therapy services for a new fracture…or the resident who has used all 100 Medicare Part A days due to a new CVA and has now been readmitted from the hospital after a fall with a fracture. All services would fall under Part B and the Cap would be reached all too quickly, resulting in a potential loss for our resident.

Congress had until March 31st to act on this issue that we have been dealing with for 20 years! Yesterday, March 26th, the House of Representatives passed the Medicare Access and CHIP Reauthorization Act (H.R. 2). This legislation had provisions for the SGR repeal and reform but DID NOT have provisions to repeal the Therapy Cap. This legislation included an extension to the current Medicare Cap Exceptions Process for another 2 years. The Senate has yet to vote on this legislation and has NOW RECESSED for 2 weeks. Because March 31st will pass before the Senate returns from recess, technically the Therapy Cap will go into effect April 1st. CMS has provided information and guidance and has accounted for Congress reconvening in 2 weeks; CMS will allow 2 weeks for Congress to come to an agreement and pass legislation to prevent the cuts and restore the exceptions process by holding all claims for this time period.

So now what?

We need to wait and see what the Senate does upon their return in 2 weeks. At best, it looks like the SGR issue will be addressed and the Therapy Cap exceptions process will continue (vs being repealed for good). Technically the legislation set to expire March 31st will expire, including activation of the cuts and the elimination of the Therapy Cap.

Keep your eyes on the news in the next few weeks and we will provide an update as soon as it becomes available.

In the mean time…

APTA, AOTA and ASHA all have legislation action center’s on their websites that will direct you as to how you can personally make a difference. Communicating directly with your Congressional staff members will make a big difference. Share with them any stories of residents that have been impacted by the Therapy Cap.

We can all make a difference!

In Your Corner,

The Montero Therapy Team

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