Revisiting a 2018 Highlight: Annual Cap Lifted For Therapy Services

The Bipartisan Budget Act of 2018, passed by Congress earlier this year, included a provision lifting the annual cap for physical, occupational and speech therapy services. The provision ends a 20-year back-and-forth between attempts to set a financial cap and efforts to prevent that from happening.

It also cements an earlier settlement between patients (Jimmo) and the Centers for Medicare & Medicaid Services (CMS) that allows for continued therapy services for maintenance of mobility or activities of daily living, instead of the previous standard where documented improvement must be seen.

The provision is backdated to Jan. 1, 2018, and allows Medicare patients to receive therapy as long as the appropriate health provider confirms a patient’s need for continuing services.

CMS explains that the law repeals the application of the Medicare outpatient therapy caps; however, it preserves previous cap amounts, requiring additional justification and documentation for services that exceed those amounts, but are medically necessary. Lower threshold amounts retain the targeted medical review process.

Legislation 20 years in the making

Home health organizations, providers of therapy services and other providers have been in a tug-of-war with CMS over therapy caps almost since their inception in 1997. Issues included cap amounts and the need for therapy services for chronic conditions where maintenance—not improvement—was the goal.

The issue came to a head when a Medicare recipient challenged the policy. The parties reached a settlement in 2013 that allowed therapy services for maintenance services, but providers later charged that CMS was not living up to the terms of the agreement. The provision in the new federal budget goes a long way toward settling the issue.

According to CMS, “skilled therapy services are covered when an individualized assessment of the patient’s clinical condition demonstrates that the specialized judgment, knowledge, and skills of a qualified therapist (skilled care) are necessary for the performance of a safe and effective maintenance program. Such a maintenance program to maintain the patient’s current condition or to prevent or slow further deterioration is covered so long as the beneficiary requires skilled care for the safe and effective performance of the program.”

Benefits of therapy

At its heart, the issue centers on the benefit of therapy services. The former standard capped therapy services or denied coverage when the patient wasn’t showing improvement. But for many patients, the ability to stay at home—even with therapy—is the goal.

While continuing to pay for therapy is more expensive than not paying, at-home care is much less expensive than paying for patient care in a skilled nursing facility, a hospital or an in-patient rehab center after the patient suffers a severe fall, for example.

We applaud Congress for putting patients first and repealing the therapy cap. This action supports agencies and their mission to serve patients who may not be improving but qualify for maintenance that is sustained by the therapy services. I encourage home health organizations and other providers to reach out to your MAC Provider Education Consultants or attend state association conferences where MAC representatives are speaking to maintenance therapy.