Let the trepidation commence. The Sustainable Growth Rate (SGR) formula—which Medicare uses to calculate reimbursements—and the therapy cap are both officially in limbo. On March 26, the House of Representatives passed legislation that would repeal SGR and extend the therapy cap exceptions process for another two years. (As an aside, the bill did not include an ICD-10 delay, so that transition is continuing as scheduled.)

Enactment of that bill wouldn’t be the optimal outcome for rehab therapists, but it would be better than the limbo situation we’re currently facing: “The Senate surprisingly did not consider the bill before leaving for a two-week recess,” explains Health Data Management. This means that on Wednesday, April 1, 2015, SGR will go into effect, cutting reimbursements by roughly 20% and eliminating the therapy cap exceptions process—which means therapists will face hard caps at $1,940 for OT and $1,940 for PT and SLP combined.

What Does this Limbo Mean?

It takes roughly two weeks for Medicare to pay claims. So if, for example, a PT submitted a claim on April 1, Medicare likely would not process it until April 15. The Senate returns from its ill-timed recess on April 13, which means senators will have about two days to pass the bill before any real damage is done. So, there may not be any sweating this. However, if the Senate deliberates, makes changes to the bill, comes up with its own version, or simply doesn’t get to a vote within two days, then get ready to sweat.

Luckily, PPS President Terence Brown, PT, is a glass half-full kind of person: “PPS believes the two-week recess provides additional opportunities to include our issues in the bill during Senate deliberations,” he explained in a PPS statement. “We will lobby to include the full repeal of the therapy cap as opposed to a two-year extension of the exceptions process…We also hope to position the no-cost locum tenens technical correction (S. 313) for inclusion in this Medicare legislation.” From that perspective, the Senate may alter the bill to include a repeal of the cap, which may push the legislative process past April 15.

What to Do

In a recent PT Compliance Group email, compliance expert Tom Ambury outlined three options, which I’ve paraphrased below.

  1. Deal with it. Congress may pass the bill on April 15. If they don’t, Medicare will process claims with the SGR reduction and deny those that are over the cap.
    1. For this reason, you will want to obtain signed advanced beneficiary notices (ABNs) from those patients whose treatment will exceed the cap on or after April
  2. Hold tight. You can wait to submit your Medicare claims until after the bill passes Congress and the President signs it into law. Medicare will process claims up to a year from the date of service.

 

As this situation unfolds and we receive additional news, statements, and advice, we’ll share everything on our blog. Stay tuned.