Therapy Cap Repeal Could Be Pushed Back to 2018

Congress has a packed agenda, which means a long-awaited repeal of Medicare’s therapy caps might not happen until 2018. The repeal likely will bring related reductions in skilled nursing facility payments.

Comprehensive tax reform legislation—now in conference committee—is a pressing priority for federal lawmakers at the moment, as is the need for a budget deal to prevent a government shutdown. With these items on the agenda, the tax extenders bill containing the therapy cap repeal appears to be on the back burner, according to Cynthia Morton, executive vice president of the National Association for the Support of Long Term Care (NASL) — an association representing therapy providers and others working in skilled nursing and other LTC settings.

“It’s a game of beating the clock,” Morton told Skilled Nursing News. “We would like action before the end of the year, because the exceptions process expires on December 31.”

That means, if there is no action, patients would face a hard therapy cap of $2,010 as of Jan. 1. Individuals on a heavy course of therapy could potentially hit that cap before the calendar turns to February, at which point their therapy would no longer be paid through Medicare. In the past, when similar situations have arisen—for example, when the caps took effect before the exceptions process was approved—the Centers for Medicare & Medicaid Services (CMS) has instructed providers to forgo filing claims for a period of time.

This could “wreak a little havoc” for providers, as they monitor the provision of therapy, handle situations in which patients hit their caps and keep an eye on directives coming out of CMS, Morton said.

The good news is that the therapy cap repeal language itself has been fully drafted and agreed to by all the relevant committees and stakeholders, she added. Knowing that repeal of the caps is coming makes the waiting game a little easier.

“It’s such a great move for patients that we can wait,” she said.

Since the therapy caps were first enacted in 1997, Congress has repeatedly granted exceptions to them to ensure that beneficiaries can receive needed therapy. The situation was similar to the “doc fix” that Congress routinely enacted to protect physician payment levels, until finally working out a permanent solution through the Medicare and CHIP Reauthorization Act (MACRA) of 2015. With that handled, permanently repealing the therapy caps took more precedence, which is one reason the repeal now is imminent, Morton believes.

But while the repeal language is set, lawmakers may still be working out “pay-fors”—Medicare reductions to offset an estimated $6 billion to $7 billion in additional spending over a decade, due to the therapy cap being lifted. It is likely that home health and skilled nursing payments will be targeted. Typically, this means a cut to market basket rates or changes to payment models, Morton noted.

Written by Tim Mullaney

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Tim Mullaney
If he’s not in the newsroom, Tim likes to be on the tennis court or traveling to a new destination. Recent highlights include Sri Lanka and Iceland.

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