• 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 Charles Boustany (R-LA), Xavier Becerra (D-CA), Marsha Blackburn (R-TN), and Lois Capps (D-CA), and Senators Ben Cardin (D-MD) and Susan Collins (R-ME) introduced the Medicare Access to Rehabilitation Services Act (H.R. 775/S. 539) in the 114th Congress. H.R. 775 and S. 539 would permanently repeal the $1,940 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 $1,940 threshold and the manual medical review exceptions process is required at the $3,700 threshold.

    Since 1997, Congress has acted 13 times to prevent implementation of the cap, including the 2006 creation of an exceptions process allowing patients to receive medically necessary services exceeding the annual cap amount. Historically, Congress has passed short-term extensions of the therapy cap exceptions process along with the sustainable growth rate (SGR) extension. In the 2015 Medicare Access and CHIP Reauthorization Act (MACRA), the SGR formula was permanently repealed, while the therapy cap only received an extension through December 31, 2017. Although a permanent solution to this policy was nearly accomplished by including provisions in Senate SGR legislation in the 113th Congress to repeal and reform the therapy cap, the permanent SGR legislation was passed without this important repeal for Medicare beneficiaries. APTA believes this was a missed opportunity for a long-term solution and puts beneficiaries at further risk when the extension expires in 2018.

    Repeal of the therapy cap continues to receive strong bipartisan support. In the 113th Congress, this legislation enjoyed a bipartisan majority of support in the House, with 225 cosponsors, and garnered the support of more than one-third of the Senate. In 2015, an amendment was offered to permanently repeal the therapy cap once and for all and provide an appropriate alternative policy along with MACRA. This amendment received a majority of 58 votes in support in the Senate, just shy of the 60-vote threshold needed. APTA and other therapy stakeholders including patient, consumer, and provider groups support provisions to repeal and reform the therapy cap and urge that a permanent solution be examined before the deadline approaches. Passing this legislation after 18 years provides an opportunity to end the pattern of yearly extensions that puts access to medically necessary therapy for 1 million Medicare beneficiaries at risk.

  • Last Updated: 8/25/2015
    Contact: advocacy@apta.org