Therapy Cap - REPEALED

NASL 2019 Issue Briefs:


Established by the Balanced Budget Act of 1997 (Public Law 105-33), the therapy cap was a statutory restriction on the dollar amount of rehabilitation therapy services a patient was able to receive under Medicare Part B in a calendar year. Under the law, there were two therapy caps – one combined for physical therapy (PT) services and speech language pathology (SLP) services and a separate cap for occupational therapy (OT) services. The caps had no regard for appropriateness of clinical need and ignored the health care needs of our most vulnerable Medicare beneficiaries – especially the oldest, sickest and most frail. Therapy caps discriminated against Medicare beneficiaries who were in the most need of therapy services. 

Rehabilitation therapists provide PT and OT and SLP services to patients in nursing facilities and other settings through the Medicare Part B outpatient therapy benefit. The goal of treatment is to help beneficiaries regain and or maintain function; recuperate from various conditions and surgeries; achieve positive outcomes; and safely return and remain home. Nursing facility patients are much more likely to have chronic conditions and typically have a higher level of impairment and more comorbidities. They can take longer to respond to rehabilitation therapy and need more therapy than beneficiaries who live independently at home. Data shows that patients with stroke, hip fracture, Parkinson's disease and other conditions that require extensive rehabilitation are most likely to be affected by the Medicare Part B therapy caps.

In addition to the therapy cap, Congress had instituted an exceptions process that allowed patients to access medically necessary therapy above the annual dollar cap. To do this, the therapy provider would attest that continued therapy services were medically necessary. Since 2007, Congress continuously extended the exceptions process through statute. The Medicare Access & CHIP Reauthorization Act (MACRA) authorized the exceptions process through December 31, 2017. MACRA also required that the Centers for Medicare & Medicaid Services (CMS) implement a targeted medical review process for claims for outpatient therapy services once they reached a $3,700 threshold.


Therapy Cap Exceptions Process
Therapy Cap Alternative Study
Therapy Cap Exceptions Process
NASL Therapy Cap FAQs
Short Term Alternatives for Therapy Services (STATS) Project
Developing Outpatient Therapy Payment Alternatives (DOTPA) Project
Therapy Cap Coalition Ad in Roll Call
Therapy Cap by the Numbers Ad run in Politico on November 19, 2014

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