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 MedPAC Calls For Therapy Caps To Be Slashed

Congress should reduce caps on outpatient therapy services by more than one-third and mandate “a manual review process” for any patient who asks to go above the caps, the Medicare Payment Advisory Commission (MedPAC) has recommended.

Officials also ought to cut the certification period for therapy plans in half, from 90 days to 45 days, and cut multiple procedure payments in half when the procedures are performed on the same day, the commission said in its annual report to Congress.

Outpatient therapy “can help Medicare beneficiaries improve their level of function and live independently, but at the same time, Medicare’s outpatient therapy benefit is vulnerable to abuse,” MedPAC said in justifying its recommendations. “Medicare lacks clear guidelines to determine the appropriate frequency, type, and duration of outpatient therapy services. Further, Medicare’s physician oversight requirements for outpatient therapy are relatively weak—once a physician or nonphysician practitioner certifies that a beneficiary requires outpatient therapy, the beneficiary can receive services for 90 days without further oversight.”

The result, the commission said, has resulted in a kind of cost jigsaw puzzle, where there are vast spending gaps from region to region. “The commission’s recommendations aim to strike a balance between ensuring access to needed care and discouraging unnecessary service use,” MedPAC said.

In 2011, Medicare spent $5.7 billion for therapy to 4.9 million patients, the commission said. Skilled nursing facilities won most of the business, with 37 percent of the revenue. Hospital outpatient clinics took another 16 percent, outpatient rehabilitation clinics and home health agencies took another 11 percent, and “other” got 7 percent of the funding, MedPAC said.

Current law offers a two-tiered cap system—$1,900 for a combination of speech and/or physical therapy and another $1,900 for occupational therapy, the commission said. But a “broad exceptions process allows provider to deliver services above either spending cap relatively easily, limiting the effectiveness of the caps,” the commission said.

There also is a manual review process for beneficiaries whose annual spending “exceeds $3,700, but it does not apply to the majority of beneficiaries who exceed the caps,” MedPAC said.

All the better, then, to slash the caps to $1,270 each and to create a manual review process for any requests that go above the caps, the commission said.

The commission’s recommendations came late Friday, just as a health care subcommittee of the House Ways & Means Committee was wrapping up hearings on ways to cut Medicare spending in post-acute care.

Both Democrats and Republicans have hinted, darkly, that cuts may be coming. Friday’s MedPAC recommendations, which were approved by the commissioners 17-0, won’t help ease long term care advocates’ queasiness.

Advocates instantly struck back at the therapy cap proposals, with American Health Care Association President and Chief Executive Officer Gov. Mark Parkinson calling the caps proposals “short-sighted.”

“While AHCA appreciates many of MedPAC’s recommendations, the commission continues to underestimate the value of Part B therapy services for our nation’s seniors,” Parkinson said in a statement. “Skilled nursing care centers provide critical therapies that maintain or rehabilitate the medically frail, elderly, and individuals with disabilities.

“Currently, there is no global standard to measure the value of this therapy,” he added. “But we all know that patients, their families, and their doctors want what is best for the individual, not what’s on a government budget line.”
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