Make therapy caps lower, streamline review process, MedPAC chairman urges House committee

Congress should set lower annual caps on Medicare reimbursements for outpatient therapy and streamline the manual review process for claims exceeding those caps, a Medicare policy expert told the House Energy and Commerce Committee Thursday.

Glenn M. Hackbarth, chairman of the Medicare Payment Advisory Commission, spoke about therapy caps, and renewed many of the recommendations that MedPAC has made to Congress in the past.

To restrain inappropriate use of therapy services, Congress should reduce the certification period for an outpatient therapy plan of care from 90 to 45 days, Hackbarth proposed in his written testimony. The average therapy episode is 33 days, he noted, meaning that reducing the certification period likely would limit the incidence of unnecessary therapy that might otherwise occur.

Policies regarding outpatient therapy caps historically have been set through bills related to Medicare’s physician payment formula, the sustainable growth rate. In 2013, the Energy and Commerce Committee advanced a bill to permanently repeal the SGR. Similar measures came out of other House and Senate committees, and many lawmakers have said they are committed to repealing the SGR in the current session. The committee meeting tackled how to address therapy caps in the potential absence of an SGR bill.

In another recommendation aimed at reducing unnecessary therapy, Hackbarth called for Medicare auditors to focus more vigorously on geographic regions with patterns of excessive therapy claims.

Reducing the 2014 therapy caps from $1,920 in allowed charges to $1,270 would “strike a balance” between restraining utilization and ensuring access to medically necessary services, Hackbarth wrote. Lowering the caps to this amount, about two-thirds of therapy users would receive services without hitting the caps, he asserted.

Claims for therapy in excess of the caps should go through a streamlined manual review process to be approved or denied, Hackbarth stated. This means contractors should accept electronic review requests, and providers should potentially bear the costs for two therapy visits during a 10-day period in which the manual review is supposed to take place.

Hackbarth also called for a standardized assessment tool that would measure a patient’s functional status and the outcomes of therapy over time. Currently, “there is limited physician oversight to determine a patient’s clinical progress and whether services continue to be necessary,” and Medicare lacks the needed data to evaluate whether therapy is called for, he wrote.

Long-term care providers routinely blast MedPAC recommendations as draconian, with an eye toward Medicare savings rather than realities on the ground. They have harshly criticized the current manual review system, and a recent study showed contractors have failed dramatically to meet the 10-day turnaround.

Lawmakers in the Senate seem to have taken their cue from providers rather than MedPAC. Last month, the Finance Committee advanced a bill to repeal the therapy caps altogether, in favor of an entirely new payment model.

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