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Dave Mason, American Physical Therapy Association

Have you ever really wanted to do something and just didn't have the money? According to Dave Mason with the American Physical Therapy Association, that's the position Congress is in when it comes to the reimbursement cap on physical therapy benefits for Medicare beneficiaries. Of course, that may not help those elder Americans who depend on Medicare benefits to receive the therapy they need.

"It's just a very problematic policy — one of those that for the best of intentions just kind of runs into the budget rules, and Congress has been struggling to figure out a good way out of the situation," says Mason, vice president of government affairs for the American Physical Therapy Association. Should Congress fail to act by the end of the year, Medicare therapy benefits will be capped at about $1,750 per calendar year for all Medicare recipients, no matter the nature of their malady, the nature of their therapy or where they receive that therapy.

Concerned about Medicare's rising outpatient therapy expenditures, Congress created a spending cap on therapy in 1997. Mason describes it as "an 11th hour addition to a budget bill. It reflects the fact that they were trying to save money and didn't really think through the policy terribly well." Essentially, the 1997 measure capped outpatient therapy benefits at $1,500 annually. The only exception was hospital outpatient departments, considered by Congress as a safety net for those in dire need. (The cap legislation did include a cost-of-living increase beginning in the year 2000.)

In 1999, the cap went into effect — and Congress heard about it. "In summary, the concern about the impact on beneficiaries was strong enough that Congress chose to put a moratorium on enforcement of the cap in 2000 and then has subsequently acted on three different occasions to impose moratoriums and keep the cap from going into place," Mason explains. The current moratorium, embodied in the Medicare Modernization Act of 2003, expires at the end of 2005. Because of inflation, the annual therapy benefit would be about $1,750 next year.

Therefore, the pressure is on. Congress might decide it can't afford to repeal the cap and may impose another moratorium instead. "But as more and more beneficiaries are covered in the program and the utilization of physical therapy and occupational therapy and speech language pathology continues to increase, every moratorium gets much more expensive than the last one," says Mason. "In this current budget environment, what the committees and the members of Congress are telling us right now is that they don't think they'll even be able to afford a moratorium."

Thus, those interested in the issue have been working to configure a viable alternative that would somehow control the use of outpatient therapy services while not harming beneficiaries who really need them. "I think it's fair to say at this stage of the game in our discussions with the folks on Capitol Hill that nobody's very happy with any of the alternatives that have been put forward," he explains. "The bottom-line reason is because, when you begin to limit the utilization of outpatient therapy services, although it seems like an appropriate control to put into place, when do you tell the beneficiaries who are receiving those services that they don't really need them? When are you risking denying beneficiaries services that they obviously need when they're recovering from a stroke?"

The "Medicare Access to Rehabilitation Services Act" (House Bill 916 and Senate Bill 438) would wipe out the therapy cap. With 170 House co-sponsors and 34 Senate co-sponsors, it has strong, bipartisan support, but that doesn't guarantee success. "There is really, really widespread support in both the House and the Senate for getting rid of the therapy cap. The difficulty, obviously, is where we get into the cost of repeal," Mason explains.

One point of compromise is the calendar year, 12-month time frame. What if someone falls in January, receives therapy and then has a stroke in August? No matter whether the individual has tapped into the therapy benefits before, he or she would be allowed only the $1,750 cap for one calendar year. Unlike cell phone minutes, there would be no rolling over of therapy benefit dollars, and that scenario concerns lawmakers, according to Mason, who worry that Medicare beneficiaries would forego outpatient rehab when they are really in need, resulting in more serious and costly cases down the road.

"There's no way to put into place a policy that would apply across all Medicare beneficiaries and assure that, for whatever the patient's age and condition and co-morbidities, he or she would get the adequate amount of therapy services needed. The system is just not sophisticated enough to do that," Mason says.

Meanwhile, stakeholders continue negotiations while watching the calendar. Yet there's another potential problem. "We don't know for sure when Congress would deal with a Medicare bill," Mason says. "There is obviously a lot of concern, especially amongst the leadership, about doing anything in Medicare that might open the prescription drug benefits to attack before it goes into place."

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