March 22, 2013 | by Robert Gatty

LTC industry applauds legislation to roll back therapy caps

Legislation that would roll back caps on therapy services to seniors in skilled nursing centers has been introduced in both the House and Senate and is being applauded by an industry reeling from one payment reduction after another.

The Medicare Access to Rehabilitation Services Act was introduced in the Senate in mid-February by Sens. Ben Cardin (D-MD) and Susan Collins (R-ME) and in the House by Reps. Jim Gerlach (R-PA) and Xavier Becerra (D-CA).

Created as part of the Balanced Budget Act of 1997, the therapy cap places an annual $1,900 financial limit on payment for outpatient therapy services under Medicare Part B. Physical therapy and speech language pathology services are under a combined cap and another is applied to occupational therapy.

The legislation would permanently end these limitations.

“Long-term and post-acute care patients should be assured of receiving the full spectrum of necessary therapies prescribed by their doctors to complete their recovery,” said Gov. Mark Parkinson, president and ceo of the American Health Care Association  and the National Center for Assisted Living (AHCA/NCAL).

“Doctors and caregivers should be monitoring patient progress, not a cap, when administering these important therapies to their patients and our residents,” he asserted. “On behalf of the entire profession, I commend Senators Cardin and Collins as well as Congressmen Gerlach and Becerra for their leadership in this important fight.”

On its Legislative Action Center website page, the National Association for the Support of Long Term Care (NASL) says it supports repeal of the annual caps and development of a new payment system that would apply to all settings and reflect key factors around clinical diagnoses, complexity of rehabilitative treatments and duration of an episode of care.

In a proposed letter that NASL is asking its members to send to lawmakers in both chambers of Congress, NASL states that “Therapy caps discriminate against the oldest, sickest Medicare patients, limiting access to necessary therapy for patients who experience more than one health episode in a calendar year like many Medicare beneficiaries who are treated in nursing facilities.”

The letter states that until a new system is established, the caps should be repealed.

Meanwhile, the Alliance for Quality Nursing Home Care issued a statement by its president, Alan G. Rosenbloom, reminding Congress that the American Taxpayer Relief Act of 2012 (ATRA)  actually imposed a new financial hit on skilled nursing facilities.

In 2012, the Centers for Medicare and Medicaid Services (CMS) reduced a portion of Part B payments when patients receive multiple therapy procedures on the same day by 20 percent for outpatient settings and 25 percent for inpatient settings like SNFs. ATRA further reduced the payment starting on April 1, 2013.

“As the smoke clears from ATRA’s passage, there is not yet sufficient recognition among policymakers that the legislation inflicted yet another SNF cut,” Rosenbloom said. “It is therefore critical to spotlight the basic policy point that when beneficiaries receive therapy services in a skilled nursing setting, payments often are made through Part B rather than Part A of the Medicare program.”

Under Part B, he explained, inpatient and outpatient providers are paid under one fee schedule, although the severity of patient illness and the degree to which patients are clinically compromised is much greater in SNFs than in outpatient facilities. “Consequently, it is more costly to provide multiple therapy treatments to SNF patients than it is to do so for outpatients,” he said.

Rosenbloom said the Alliance is letting Congress know that the total $65.6 billion SNF Medicare funding reduction, estimated for the years 2012 through 2021, comprises these budget and regulatory actions:

  • $34 billion – Productivity Adjustment mandated by the Affordable Care Act.
  • $16 billion – Forecast Error (Case-Mix) Adjustment.
  • $3 billion – Forecast Error (Market Basket) Adjustment in FY 2011 Rule.
  • $3 billion – Bad Debt (Middle Class Tax Relief & Job Creation Act of 2012).
  • $600 million (estimated) – ATRA Medicare Part B Reduction.
  • $9 billion — Sequestration, effective March

“In the weeks ahead, it has never been more important for our sector as a whole not just to point out the obvious: that still more cuts are untenable as SNFs care for an increasing number of older, higher acuity patients,” said Rosenbloom. “Yet we must also articulate how systemic post-acute payment reforms can save Medicare resources, and rationalize the system for the collective benefit of patient, provider and taxpayer alike.”

On March 7, just a week after the across-the-board cuts imposed by sequestration were implemented, the Alliance issued a statement stating that the immediate impact of those cuts will total $783 million, and that the 10 states facing the biggest reductions to nursing home pay are California — $75.9 million; Florida — $66 million; Texas — $51 million; New York — $47.2 million; Illinois — $46.2 million; New Jersey — $37l5 million; Ohio — $37.3 million; Pennsylvania — $36.9 million; Michigan — $30.2 million; and Maine — $28.4 million.

Meanwhile, AHCA/NCAL also praised legislation introduced March 14 that the organization says would ease access to Medicare coverage in an SNF following a hospital stay under observation status. The bill was introduced in the Senate by Sen. Sherrod Brown (D-OH) and in the House by Reps. Joe Courtney (D-CT) and Tom Latham (R-IA.)

The measure ensures that time spent under observation status in a hospital counts toward satisfying the three-day inpatient hospital requirement for coverage of SNF services under Medicare. Similar legislation was introduced in 2011, but received no committee consideration.

Bob Gatty has covered governmental developments for the trade and business press for more than 30 years. He is founder and president of G-Net Strategic Communications, Sykesville, Md.     

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