Title XVIII of the Social Security Act, section 1833(g), applies an annual per beneficiary combined cap beginning January 1, 1999 on outpatient physical therapy and speech-language pathology services and a similar separate cap on outpatient occupational therapy services. These caps apply to expenses incurred for the respective therapy services under Medicare Part B, with the exception of outpatient hospital services.

The Balanced Budget Act of 1997 placed financial limitations on Medicare-covered therapy services (therapy caps), that were implemented in 1999 and again for a short time in 2003. Congress placed moratoria on these caps for 2004 and 2005, but the moratoria are no longer in place, and the caps were reimplemented on January 1, 2006. However, Congress, through the Deficit Reduction Act has provided that (only for calendar year 2006) exceptions to caps may be made when provision of additional therapy services is determined to be medically necessary. This process ends after December 31, 2006.

Beginning on January 1, 2007, the annual limit on the allowed amount for outpatient physical therapy and speech-language pathology combined is $1780; the limit for occupational therapy is $1780.

As noted previously, the l imits apply to outpatient Part B therapy services from all settings except outpatient hospital (place of service code 22 on carrier claims) and hospital emergency room (place of service code 23 on carrier claims).

Medicare beneficiaries are responsible to pay the coinsurance (20 percent) and any deductible that may apply. For example, in 2007, if the deductible has been met prior to submission of a claim for $17 80 of therapy services, Medicare will pay 80 percent, which is $1 424. The beneficiary will pay the 20 percent coinsurance, which is $3 56. If the deductible has not been met, the beneficiary will also pay the deductible amount of $1 31 and 20 percent of the amount remaining after the deductible is met (20% of $1649), or $329.80 for a total of $460.80. Medicare will pay the remaining 80 percent after the deductible is met or $1319.20.

Note: These amounts are for calendar year 2007 and will change each calendar year.

CR 5271

Posted: 12/29/2006

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