Provider Types Affected
Therapists and providers who bill Medicare carriers or fiscal intermediaries (FIs) for therapy services for their patients

Provider Action Needed
Impact to You
Beginning January 1, 2006, financial limitation of therapy services (therapy caps) will be implemented. This limitation is similar to the limitation implemented on September 3, 2003, except for a change in the dollar amount. The dollar amount for the 2006 limitation on physical therapy and speech-language pathology services from January 1, 2006, through December 31, 2006, will be $1,740. The limitation on occupational therapy services is also $1,740.

What You Need to Know
Carriers and FIs will not change the way outpatient therapy service claims (physical therapy, including outpatient speech-language pathology, and occupational therapy) were processed from September 1, 2003 through December 7, 2003.

What You Need to Do
Please be aware of the January 1, 2006 therapy services caps.

Background
Financial limitations on therapy services (therapy caps) are currently described in the Medicare Claims Processing Manual (Pub. 100-04), Chapter 5, Section 10.2, which is available at http://www.cms.hhs.gov/manuals/104_claims/clm104c05.pdf on the CMS Web site. The dollar amount for the limitations in 2006 is based on the Medicare Economic Index that is published in the final rule for the Medicare Physician Fee Schedule in November 2005.

Section 4541(a)(2) of the Balanced Budget Act (BBA) (P.L. 105-33) of 1997, required payment under a prospective payment system for outpatient rehabilitation services (physical therapy, including outpatient speech-language pathology, and occupational therapy). Section 4541(c) of the BBA required the application of a financial limitation to all outpatient rehabilitation services (except outpatient departments of hospitals). These limits were in effect in 1999, but were removed by law in 2000-2002. The statutory limits went back into effect September 1, 2003. The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 reenacted the moratorium and extended it until December 31, 2005.

Additional Information
There is additional information located on the Rehabilitation Therapy Information Resource for Medicare Web site located at http://www.cms.hhs.gov/providers/therapy on the CMS Web site.

You will also find a PowerPoint Demonstration on Outpatient therapy caps on that site under the heading, “ Therapy Cap Status.” (Outpatient Therapy Caps PowerPoint Demonstrationposted November 14, 2005.)

The official instruction issued to your FI or carrier regarding this change may be found by going to http://www.cms.hhs.gov/Transmittals/ on the CMS Web site. From that Web page, look for CR4115 in the CR NUM column on the right, and click on the file for that CR.

Please refer to your local FI or carrier if you have any questions. To find the toll-free phone number, go to http://www.cms.hhs.gov/MedlearnProducts/downloads/CallCenterTollNumDirectory.pdf on the CMS Web site.

Disclaimer
This article was prepared as a service to the public and is not intended to grant rights or impose obligations. This article may contain references or links to statutes, regulations, or other policy materials. The information provided is only intended to be a general summary. It is not intended to take the place of either the written law or regulations. We encourage readers to review the specific statutes, regulations and other interpretive materials for a full and accurate statement of their contents.

For more information, visit the Medlearn Matters Web page at: http://www.cms.hhs.gov/MedlearnMattersArticles/.

Pub. 100-4, Transmittal# 759, CR# 4115
Medlearn Matters Number: MM 4115
Related CR Release Date: November 18, 2005
Effective Date: January 1, 2006
Implementation Date: January 3, 2006

Posted: 12/13/2005

CPT codes, descriptions, and other data only are copyright 2005 American Medical Association (or such other date of publication of CPT). All Rights Reserved. Applicable FARS/DFARS Apply.