• Under the Balanced Budget Act (BBA) of 1997 Congress placed an annual cap on rehabilitation services under Medicare. Since enacting the BBA, Congress has recognized the cap's potential harmful effect on Medicare beneficiaries and has acted several times to prevent implementation of a hard cap.

    Representatives Erik Paulsen (R-MN), Ron Kind (D-WI), Marsha Blackburn (R-TN), and Doris Matsui (D-CA), and Senators Ben Cardin (D-MD), Dean Heller (R-NV), Susan Collins (R-ME) and Bob Casey (D-PA) introduced the Medicare Access to Rehabilitation Services Act (H.R. 807/S. 253) in the 115th Congress. H.R. 807 and S. 253 would permanently repeal the $1,980 therapy "cap" imposed on physical therapy, occupational therapy, and speech-language pathology services. An arbitrary cap on outpatient therapy services without regard to clinical appropriateness of care discriminates against the most vulnerable Medicare beneficiaries. APTA believes that a full repeal of the therapy cap is necessary to ensure patients have access to timely and appropriate care.

    There is a two-tiered exceptions process, an automatic exceptions process and a manual medical review exceptions process. The automatic exceptions process applies when patients reach the $1,980 threshold and the manual medical review exceptions process is required at the $3,700 threshold.

    On April 15, 2015, the US Senate passed the Medicare Access and CHIP Reauthorization Act (H.R. 2) legislation to repeal and reform the Sustainable Growth Rate (SGR) formula and includes an extension of the Medicare therapy cap exceptions process through December 31, 2017 and provisions to allow CMS to better target manual medical reviews. This was after an historic grassroots push and a vote to amend the bill to fully repeal the Medicare therapy cap which failed by 2 votes. This marked the furthest this issue has ever been raised in its 18 year history.

    Latest News December 22, 2017:

    Congress has recessed for 2017 without addressing the Medicare therapy cap. This means that beginning January 1, 2018, a $2,010 hard cap on rehabilitation services will be applied, with no exceptions process.

    Because of the legislators' failure to pass a Medicare extenders package, which included the permanent fix to the therapy cap, physical therapists and their patients will be held to a hard combined cap on physical therapy and speech-language pathology services. The exceptions process that has allowed for medically necessary services above the cap via use of the KX modifier expires at year-end. This also means that the hospital setting is exempted from the hard therapy cap.

    The lack of action on the cap is particularly disappointing for APTA and other stakeholders, given that a bipartisan, bicameral agreement had been reached to permanently end the hard cap. Had Congress taken action, that agreement would have ended Congress' continual tradition of scrambling to come up with an exceptions process. When Congress returns on January 3 from recess we will work with them to pass the Medicare extenders package with its repeal of the hard cap. Congress must pass another continuing resolution before January 19, 2018, to keep the government funded. This is the most likely vehicle onto which to attach the Medicare therapy cap repeal legislation.

  • Last Updated: 1/30/2018
    Contact: advocacy@apta.org