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September 2012
News For You

Reimbursement changes for Outpatient Physical Rehabilitation Services

The Middle Class Tax Relief and Job Creation Act of 2012 (H.R. 3630) was signed into law on February 22, 2012. The law extended the Medicare Part B Outpatient Therapy Cap Exceptions Process through December 31, 2012, and also extended the cap to include previously exempt Hospital-based facilities.

As a result, beginning October 1, 2012, Outpatient Physical Therapy Services furnished by Hospital outpatient departments will be applied to Medicare beneficiaries' annual therapy cap amount. Other outpatient therapy settings previously subjected to the therapy cap include:

  • Physician offices
  • Comprehensive outpatient rehabilitation facilities (CORFs)
  • Skilled nursing facilities
  • Rehabilitation agencies (or ORFs)
  • Physical therapists in private practice

The statutory Medicare Part B outpatient therapy cap for Occupational Therapy (OT) is $1,880 for 2012, and the combined cap for Physical Therapy (PT) and Speech-Language Pathology Services (SLP) is also $1,880 for 2012. This is an annual per beneficiary therapy cap amount determined for each calendar year and is calculated at the Medicare allowable charge rate.

The law includes an exceptions process to the therapy cap, which allows Hospital-based providers like NCH to receive payment from Medicare for services above the therapy cap amount. Such requests for exceptions beyond $3,700 for PT and SLP combined, and $3,700 for OT, will be manually medically reviewed by the Medicare contractor. There will be no automatic exceptions granted for requests for exceptions above the $3,700 threshold solely on the basis of a specific diagnosis.

For Medicaid reimbursement, effective July 1, 2012, the Illinois Department of Healthcare and Family Services implemented an annual cap of 20 visits per discipline (PT, OT, or SLP) per fiscal year (July 1 through June 30) for adult patients. This cap applies to all settings, except for services received while a patient is in the hospital as an inpatient.

According to Karen McCauley, NCH's director of Physical Rehabilitation Services, her team continues to stay abreast of all Medicare B regulations and is prepared to manage and support the changes to reimbursement for services potentially affecting patients and providers.

"Our therapists will continue to promote recovery and follow best practices, all while being mindful of the new reimbursement landscape and sensitive to the financial restrictions placed on Medicare and Medicaid patients," she says.

McCauley adds that NCH's Physical Rehabilitation Services teams will continue to provide patients with intensive one on one therapy sessions, facilitate home therapy programs to reinforce and support patient progress and participation, and concentrate each patient visit on advancing their care in the most effective setting.

Outreach and education letters from the Centers for Medicare and Medicaid Services will be sent to beneficiaries who are nearing their annual therapy caps, explaining these changes and detailing when beneficiaries would be financially responsible for therapy services.

For more information about the Medicare reimbursement changes for Outpatient Physical Rehabilitation Services, contact Karen McCauley at 847.618.3560.

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Last Updated 2012/09/25