The American Occupational Therapy Association (AOTA), Bethesda, Md, reports that the Senate Finance Committee, in a bipartisan effort, recently proposed to prevent the imposition of a more than 23% cut to the Medicare Physician Fee Schedule.
In doing so, the Senate pays for the 1-month cost of $1 billion through legislation that reduced the impact of the CMS proposed Multiple Procedure Payment Reduction on therapy.
The Senate, coming up against a November 30 deadline to prevent a more than 23% cut to all payments under the Medicare Physician Fee Schedule, including occupational therapy, proposed a 1-month delay in implementation of the cuts while providing some relief to therapy under the recently proposed Multiple Procedure Payment Reduction (MPPR) in Medicare.
The MPPR final proposal was released on November 2. That final proposal was an improvement over the original. AOTA had advocated for elimination of the policy or at a minimum changes to protect consumers and assure access to therapy. Following this intense advocacy, the proposed cut was reduced from a 50% cut on the practice expense on units after the first provided on a day to 25%.
The Senate proposal further limits the MPPR cut to the practice expense component to only 20%, resulting in keeping an additional roughly $25 million in therapy per year. This reduction from 25% to 20% is only for services provided by private practitioners and other "non-institution" based providers. The 25% cut still applies to skilled nursing facilities, hospital outpatient departments, comprehensive outpatient rehabilitation facilities, and others.
AOTA is continuing to negotiate on the final details of the bill which is on a fast-track for passage before the Thanksgiving recess and continues to work to mitigate the impact of several aspects of the flawed MPPR policy.
The House is expected to take action after the Thanksgiving recess.
Click here for a direct link to the Senate Finace Committee Draft of the Physician Payment and Therapy Relief Act of 2010.
Summary as prepared by the US Senate Finance Committee:
Physician Payment and Therapy Relief Act of 2010
Medicare payments to physician are scheduled to be reduced by 23 percent as of December 1, 2010. Legislative action is needed so that Medicare beneficiaries’ access to physicians is not jeopardized. The bill would continue the existing 2.2 percent update that expires November 30, 2010 for an additional month through December 31, 2010 and fully offset the cost.
The bill would also codify a modification of the multiple payment procedure reduction (MPPR) finalized by Centers for Medicare & Medicaid Services (CMS) this month by applying a 20 percent reduction, rather than the 25 percent reduction in the final rule, to the PE component for the second and subsequent outpatient therapy services for services paid under the physician fee schedule (PFS) that are furnished in the office setting. The savings would not be distributed on a budget neutral basis as in the final rule but would be used instead as savings to offset the additional one month of the physician payment update.
Earlier this year, CMS proposed to apply a 50 percent reduction to the practice expense (PE) component for the second and subsequent outpatient therapy services furnished for the same beneficiary on the same day for outpatient therapy services paid under the Medicare Physician Fee Schedule. In the final physician rule, CMS modified the MPPR policy to apply a 25 percent reduction, rather than the proposed 50 percent reduction, to the PE component for certain second and subsequent therapy services furnished for the same beneficiary on the same day. By law, CMS must apply the savings from this reduction for therapy services paid under the PFS on a budget-neutral basis and redistribute the savings within the PFS.
Explanation of Offsets:
The cost of a one month physician payment update is $1 billion over ten years. The savings from the MPPR codification that applies a 20 percent reduction to the PE component for the second and subsequent outpatient therapy services under the physician fee schedule is also $1 billion over ten years.
The bill would fully offset an additional one month physician payment update through the end of the year and help ensure continued access for Medicare beneficiaries while also providing a measure of relief to therapists providing outpatient services under the PFS who would otherwise see the 25 percent MPPR reduction as of January 1, 2011.