Revisiting rehab payments under PPS.

Proposed legislation may loosen therapy cap

LEGISLATION RECENTLY INTRODUCED IN THE Senate may help loosen the $1,500 annual cap on Medicare nonhospital outpatient rehab services, including those provided by skilled nursing facilities. The Medicare Rehabilitation Benefit Improvement Act of 1999. sponsored by Senator Charles Grassley (R-Iowa), would allow certain Medicare beneficiaries to receive additional therapy services.

The Balanced Budget Act of 1997 (BBA) imposed a $1,500 cap on physical therapy and speech and language pathology services combined, and a separate $1,500 cap on occupational therapy. Both caps were effective as of January 1, 1999. According to Grassley's legislation, an estimated 750,000 beneficiaries will hit the limit this year. At the end of January, an estimated one in four beneficiaries had already used half of their yearly benefit.

The bill would exempt from the cap anyone who fits one of the following criteria:

* The beneficiary is diagnosed with an illness, injury, or disability that requires additional physical, speech-language pathology, or occupational therapy services that are medically necessary in a calendar year

* The beneficiary has a diagnosis that requires such therapy services and has an additional diagnosis or incident that exacerbates his or her condition, such as diabetes, which would require more services

* The beneficiary will require hospitalization if he or she does not receive the necessary therapy services

* The beneficiary meets other requirements determined by the Secretary of Health and Human Services.

The bill also directs the HHS to conduct a study within two years of the bill's enactment and report to Congress the agency's recommendations for alternatives to the benefit limitation. The study would determine the number of Medicare beneficiaries who receive exemptions to the cap, their diagnoses, the types of therapy services covered due to such exemptions, the settings in which services are provided, and the number of beneficiaries that reach the $1,500 cap.

Grassley's legislation would help beneficiaries who need multiple episodes of care in a given year, a concept supported by the American Physical Therapy Association. "As long as the services are medically necessary. APTA believes that beneficiaries should not have to fear denial of coverage if they happen to require physical therapy in the spring and then again in the winter for another condition, said APTA President Jan K. Richardson in a prepared statement.

According to American Association of Homes and Services for the Aging spokesperson Robert Greenwood, AAHSA already has observed a trend toward beneficiaries trying to reduce the amount of therapy they receive in order to spread their benefits over the entire year. Such rationing, he cautions, could "impair the rehabilitation process.

Although Congress had shown resistance to amending the BBA, Greenwood thinks it's 'significant" that Grassley, who chairs the Senate Special Committee on Aging, introduced the legislation. Grassley is also a member of the Senate Finance Committee, which has jurisdiction over the Medicare program.

Senator Pete Stark (D-Calif.) also plans to reintroduce legislation this session to undo some of the damage caused by the cap. Unlike Grassley's bill, which costs money by creating an exemption to the limit, Stark's budget-neutral bill reportedly will ask HHS to come up with recommendations on how to vary the cap per diagnosis by the year 2000.