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News & Press: Government Affairs News

Legislation Renewing Physical Therapy Cap Stuck in Limbo

Tuesday, January 9, 2018   (0 Comments)
Posted by: Bradley Coffey, MA, AAOE Government Affairs
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Washington, DC - Legislation that would extend the Medicare exemptions from the annual physical therapy cap, known as Medicare extenders, is stalled as lawmakers argue over how to pay for the legislation.

Many of the "extender" provisions have already expired but are unlikely to affect patient care until later in the year. The stall comes despite a bipartisan deal that was reached in November by the House Ways and Means Committee, chaired by Kevin Brady (R-TX). AAOE pulled its support for this legislation due to a provision of the bill that would allow CMS to redistribute misvalued billing codes from specialties to more primary care services. However, if CMS were to miss certain spending targets, Medicare would implement across the board cuts to physician reimbursement, similar to the cuts required following sequestration.

The first casualty to the funding argument was AAOE's own amendment that would have delayed cuts to computed radiography (CR) reimbursement. Because of this, practices billing for x-rays that were taken using CR, will see their reimbursements cut by 7% starting January 1, 2018. All claims for imaging services using CR must append the modifier FY to the claim to signify that the x-ray was taken using CR.

Another casualty of Congress' inaction is Medicare's geographic adjustment for reimbursements. Known as the Work Geographic Practice Cost Indices (GPCI) Floor, this number reflects the geographic cost fluctuations for the resources needed to produce physician services: physician work, practice expense, and medical malpractice insurance. Because most independent physicians are reimbursed through the Medicare Physician Fee Schedule which utilizes the GPCI to set reimbursement rates, independent practices stand to be impacted by the inability to renew this provision more than providers reimbursed under the inpatient or outpatient prospective payment systems. Rural providers will be impacted to a greater extent than urban providers if the Floor is not extended. Providers that practice in an area where the GPCI is less than 1.0 without the floor of 1.0 will likely see their reimbursements decrease if Congress does not act.

Prior to 2015, Congress typically packaged the extenders legislation in with the annual "doc fix" to delay implementation of the Medicare Sustainable Growth Rate (SGR) but with repeal of the SGR in 2015, policymakers lost an important vehicle to move the extenders package through the legislative process. House and Senate leadership have expressed optimism to have an agreement by January 19, 2018 when the Children's Health Insurance Program (CHIP) is expected to be renewed but given the concerns with the current off-sets, that date is looking more like fantasy than reality.

Still, further delays in passage of a fix do not look favorable to policymakers. The last time Congress missed an extenders renewal deadline in 2010, $200 million in new appropriations were required to reprocess claims to reimburse physicians for the services provided during the lapse. That amount may be unthinkable for fiscally conservative Republicans and Democrats who want to see accountability for the money spent by Congress.

AAOE will continue to monitor progression of the extenders legislation and inform members of new developments.

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