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MedPAC discusses options for reforming outpatient therapy payment

October 5, 2012

The Medicare Payment Advisory Commission today discussed draft recommendations for reforming the Medicare benefit for outpatient physical and occupational therapy and speech-language pathology to control spending while improving care and access to services. Proposals include reducing the annual spending limits for beneficiaries while maintaining a manual exceptions process to accommodate additional therapy needs; including hospital outpatient services in the spending caps; reducing the practice expense payment by 50% when multiple therapy services are provided on the same day; and prohibiting therapy (v-codes) as the primary diagnosis when billing for outpatient therapies. The commission also discussed the recommendation for a standardized tool to classify patients by severity, assess the impact of therapies received, and set the stage for future payment bundling. Program integrity proposals include reducing the treatment plan certification period to 45 days from 90 days; targeting high-use areas and aberrant providers; imposing a moratorium on new providers and requiring current providers to re-enroll in the program. MedPAC must report its final recommendations to Congress by June 15, 2013.