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IPAB and Physical Therapy Included in Congress’ Medicare Extender Package

February 9, 2018

The U.S. House and U.S. Senate approved a funding resolution on February 9 that includes several Medicare provisions that affect musculoskeletal care:

Physician-owned Hospitals:  No Relief. An effort by Texas lawmakers to allow physician-owned hospitals located in areas affected by the recent hurricane to expand by 50 percent was not included in the bill. However, Congressman Brian Babin of Texas is circulating a request for CMS to provide relief.

IPAB Elimination.  The Independent Payment Advisory Board (IPAB), which was created by the Affordable Care Act to address rising Medicare costs, was eliminated.

Physical Therapy’s Cap. Medicare’s existing “hard” physical therapy cap has been repealed (effective December 31, 2017).  However, it comes at a cost, and Congress relied on several offsets to help pay for it:

Explanation of the “New Cap” for Outpatient Medicare Part B

The threshold for targeted medical review will be lowered from $3,700 to $3,000 through 2027. However, not all claims that go over $3,000 will be subject to medical review. Instead, only a sample of the claims that meet certain criteria, such as high claims denial percentage or certain billing patterns, will be subject to the review.

The $3,000 per beneficiary applies to combined physical therapy and speech language pathology services – or $3,000 in occupational therapy claims alone.

Therapy claims for outpatient Medicare Part B that go over $2,010 (adjusted annually) will require the KX modifier for medical necessity.

Congress gave HHS the regulatory authority to address the manual medical review.

Physical Therapy Assistants Payment Reductions

The legislation will reduce payments to physical and occupational therapy services provided by a therapy assistant to 85 percent.  The payment reduction is scheduled to begin in January 2022 for outpatient therapy services.

The text of the therapy cap provision can be found on page 19. (Click here to view the bill’s language.)

Orthotist and Prosthetist Notes. Orthotist and prosthetist notes are now part of the medical record for purposes of Medicare medical necessity and claims audits.

Per the legislation:

13 Section 1834(h) of the Social Security Act (42 U.S.C. 1395m(h)) is amended by adding at the end the following new paragraph:”
(5) DOCUMENTATION CREATED BY ORTHOTISTS AND PROSTHETISTS. – For purposes of determining the reasonableness and medical necessity of orthotics and prosthetics, documentation created by an orthotist or prosthetist shall be considered part of the individual’s medical record to support documentation created by eligible professionals described in section 1848(k)(3)(B).”.

Stark Modernization. Commentary on the Stark laws begins on page 136 (click here). It exempts holdover lease arrangements and personal service arrangements from the definition of a prohibited compensation arrangement.

Meaningful Use. The bill contains parts of the Health Information Technology for Economic and Clinical Health Act by removing a mandate that meaningful use standards must evolve to be more stringent over time.

MIPS. The bill prohibits CMS from scoring an eligible clinician on improvement in the second, third, fourth, and fifth years (for which MIPS applies to payments).

Both the House and Senate bills block CMS from ever raising cost cutting to more than 30 percent of a physician’s scores.

Physician Fee Schedule. The updated will be reduced from 0.5 percent to 0.25 percent in 2019.