Email
From: Alfred, Marsha
Sent: Monday, July 14, 2003 6:30 PM

Subject: Medicare Outpatient Therapy Caps

Per Don Hutchinson:

With the exception of outpatient departments of a hospital, Section 4541 of the Balanced Budget Acct (BBA) requires payment under a prospective payment system for outpatient rehabilitation services.

The Medicare outpatient therapy cap (PT - Physical Therapy which includes SLP - Speech-Language Pathology) and (OT - Occupational Therapy) prospective payment implementation has been delayed by CMS from an effective date of July 1, 2003 to September 1, 2003.

Services rendered between September 1, 2003 and December 31, 2003 will be subject to a prospective payment system for outpatient therapy limits.

Annual Caps per Beneficiary:

$1,590 * for both PT and SLP

$1,590 * for OT

Medicare will pay 80% ($1,272) of these limits - the beneficiary is responsible for the coinsurance of $318.

* - Rate was indexed by the Medicare Economic Index beginning in 2002. The indexed rate for 2003 is $1,590.

The provider/physician/supplier is responsible for notifying the beneficiary when a service would cause the client to exceed the cap of $1,590. This is necessary because the beneficiary is responsible for payment of all outpatient rehab services which exceed the cap on an annual basis.

We do not know the impact of the cap on each facility, since we do not have sufficient information necessary to make this calculation. We have attached the February 7, 2003 (AB0318.pdf) Program Memorandum from TriSpan. This memo lists several calculations of payments for PT and OT including calculations for coinsurance and deductibles. We have also attached the memorandum notifying providers of the delay. (2003-185.pdf)

The calculation is very basic. The max for each beneficiary is $1,272 with the beneficiary responsible for all expenses in excess of $1,272. The $1,272 should be multiplied by the number of patients who were billed the maximum ($1,590). If the max was not billed, then use 80% of the total billed. We will be happy to provide further assistance if needed.

(Refer to Trispan Memorandum and CMS Program Memorandum)