Medicare Meltdown Averted: Therapy Cap Exceptions Extended, Physician Fee Schedule Payments Frozen Speech-language pathologists and audiologists have reason to celebrate the new year after last-minute action by the 109th Congress before its final adjournment. On Dec. 8, lawmakers voted not only to avert drastic cuts to the Medicare Physician Fee Schedule that includes the services of speech-language pathologists and audiologists, but also ... Policy Analysis
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Policy Analysis  |   December 01, 2006
Medicare Meltdown Averted: Therapy Cap Exceptions Extended, Physician Fee Schedule Payments Frozen
Author Notes
  • Mark Kander, is the director of health care regulatory analysis.
    Mark Kander, is the director of health care regulatory analysis.×
  • Ingrida Lusis, is the director of health care regulatory advocacy at ASHA.
    Ingrida Lusis, is the director of health care regulatory advocacy at ASHA.×
  • Steven White, is the director of health care economics and advocacy.
    Steven White, is the director of health care economics and advocacy.×
Article Information
Regulatory, Legislative & Advocacy / Policy Analysis
Policy Analysis   |   December 01, 2006
Medicare Meltdown Averted: Therapy Cap Exceptions Extended, Physician Fee Schedule Payments Frozen
The ASHA Leader, December 2006, Vol. 11, 1-31. doi:10.1044/leader.PA.11172006.1
The ASHA Leader, December 2006, Vol. 11, 1-31. doi:10.1044/leader.PA.11172006.1
Speech-language pathologists and audiologists have reason to celebrate the new year after last-minute action by the 109th Congress before its final adjournment. On Dec. 8, lawmakers voted not only to avert drastic cuts to the Medicare Physician Fee Schedule that includes the services of speech-language pathologists and audiologists, but also extended the therapy cap exceptions process for another year. ASHA and other rehabilitation associations vigorously lobbied Congress for these changes. The therapy caps exceptions process was set to expire on Dec. 31, 2006. Although the combined $1,780 cap for speech-language pathology and physical therapy services and a separate $1,780 occupational therapy cap still remain, the exceptions process allows beneficiaries access to medically necessary outpatient therapy services above the therapy cap.
At this time no significant changes to the current exceptions process are expected, because Medicare officials reported to ASHA and others that the process was working well. The Centers for Medicare and Medicaid Services (CMS) will continue to allow an automatic exception for services to beneficiaries whose diagnosis requires both physical therapy and speech-language pathology concurrently when all of the services are medically necessary. Exceptions will still fall into two categories, automatic and manual. Speech-language pathologists will continue to use a KX modifier with the HCPCS code on each line of service that meets the requirements for exception. The KX modifier should only be used in those cases where the clinical record clearly indicates that the individual patient is in need of additional covered services during the episode of care.
Additional information on the therapy cap exceptions process can be found on the ASHA Web site.
CMS Issues Final Payment Rules for 2007
Under Medicare, SLPs and audiologists are covered differently by two federal fee schedules according to practice settings, with rates revised annually. The Medicare Physician Fee Schedule (MPFS) covers speech-language pathology procedures in nearly all settings and audiology services in most settings except for hospitals. The Outpatient Prospective Payment System (OPPS) covers audiology procedures rendered in hospitals and a few surgical and radiologic procedures associated with speech-language pathology services. In both cases, Medicare values outpatient services using a relative value scale.
Medicare Physician Fee Schedule
The MPFS is based on the American Medical Association’s Current Procedural Terminology© (CPT) codes. The MPFS has set Medicare Part B prospective payment rates since 1992 for speech-language pathologists, physicians, other private practitioners, and medical clinics. Reimbursement for outpatient rehabilitation services in such facilities as hospitals, skilled nursing facilities, and rehabilitation agencies was included in the MPFS in 1999.
In addition to the exceptions process, Congress averted the proposed 5.05% reduction in the MPFS and froze Medicare Part B reimbursement at 2006 rates if there is no change in the procedure’s total relative value. The proposed cut to the MPFS—which triggered ongoing congressional debates—resulted from a formula approved by Congress known as the sustainable growth rate (SGR). The SGR ties payment changes to an actual growth rate based on real gross domestic product per capita.
Although cuts subject to the SGR were averted, CMS announced a 10.1% reduction in the work relative value units (RVUs) assigned to each procedure. RVUs are the measure of how services are valued. This adjustment offsets an estimated $4 billion increase in Medicare costs resulting from upgraded RVUs triggered by a CMS revision of work RVUs following a five-year review process conducted by the American Medical Association (AMA) Relative Value Update Committee.
Table 1 below illustrates 2006 and 2007 payment amounts for selected high-incidence audiology codes. In 2007, one of the most common audiology procedures, CPT 92557 (comprehensive audiometry), will increase in total RVUs from 1.31 to 1.33, and, reimbursement will increase from $49.65 to $50.40.
Other audiology procedures of note are 92585 (comprehensive auditory evoked potentials), with a reimbursement drop to $101.94; comprehensive otoacoustic emissions with an RVU decrease to 1.98 and a reduced decrease to $75.04. Among the newer procedures, 92603 (cochlear implant programming) will increase in 2007 by 11.3% in RVUs, and the payment will rise from $88.88 to $93.61. For the new 2007 procedure 92640 (auditory brainstem implant programming), RVUs are 1.41 and the payment is $53.44.
CMS also made changes to the RVUs assigned to speech-language pathology services. Table 2 illustrates 2006 and 2007 payment amounts for selected high-incidence speech-language pathology codes. In 2007 speech and language evaluation will increase from 3.49 to 3.65 RVUs. Speech-language treatment will see a modest increase from 1.65 to 1.67 RVUs, and dysphagia treatment will increase slightly from 2.21 to 2.22 RVUs. Thanks to Congressional action, rates will now increase due to the freeze of the conversion factor. There are problematic RVU reductions in dysphagia clinical evaluation (from 3.52 to 3.06) and the modified barium swallow evaluation (from 3.52 to 3.12).
CMS also announced in the 2007 MPFS rule that telepractice services for SLPs and audiologists cannot be considered until Medicare law is amended to permit payment for services provided at a distant site. ASHA will continue advocacy on this issue in line with the Association’s 2007 Public Policy Agenda, which includes promoting “access to and coverage of audiology and speech-language pathology telepractice services to remote-site health and education settings in legislation, regulation, or credentialing processes” as a priority issue.
The complete fee schedule for audiologists and SLPs is available on ASHA’s Web site.
Outpatient Hospital Prospective Payment Rates
Hospital-based audiologists with an eye to reimbursement watch the vacillations of the OPPS, which covers audiology services and some radiology and surgical services associated with speech-language pathology. The new rates, which take effect Jan. 1, are based on 2005 nationwide hospital cost data.
Because some of these related radiology and surgical services are covered under both OPPS and MPFS, reimbursement depends on where the procedure takes place—if it’s in the hospital, audiologists look to OPPS. If it’s an office procedure, the MPFS would be the applicable fee schedule.
Proposed OPPS reimbursement for these CPT codes include:
  • Diagnostic laryngoscopy with stroboscopy (CPT 31579)—$236.42, 11% higher than the MPFS

  • Radiology services for modified barium swallow (CPT 74230)—$87.86, 11% higher than the MPFS

  • Laryngeal function studies (CPT 92520)—$88.89, 79% higher than the MPFS

Changes in outpatient audiology rates range from a decrease of 4.6% to an increase of 11.3%, with two exceptions. In January 2005, ASHA submitted detailed arguments to CMS regarding the undervalued reimbursement rate for evaluation of central auditory function (CPT 92620) and tinnitus assessment (CPT 92625). CMS upgraded these two procedures to a higher Ambulatory Payment Classification (APC)—from Level I Audiometry to Level II Audiometry—resulting in a rate increase of almost 300% (from $27.07 to $76.34).
OPPS rate changes are summarized as follows:
  • Audiometric tests: increase 5.1%–7.5%

  • Vestibular function: Evoked emissions, limited: increase 1.1%

  • Posturography: Evoked emissions, comprehensive: decrease 4.6%

  • Auditory evoked potentials: Visual evoked potentials: increase 11.3%

The new payment for cochlear implantation covers both the surgery and the device itself; the 2007 rate is $25,500, an increase of 8.8%. While this rate remains less than the full costs incurred by hospitals, it is a substantial improvement over the current rate.
More information on the OPPS rates is available on the ASHA Web site.
The new OPPS and fee schedule also includes the new CPT code for auditory brainstem implant programming (92640), the result of ASHA’s advocacy efforts. Because this is a new code, the rate cannot be based on historic costs. CMS assigned the code to APC 365, Level II Audiometry ($76.34). ASHA will examine alternative pricing and, if a higher rate is justifiable, will submit comments to CMS in early 2007.
Progress Made on Valuation of “Professional Work”
There is more good news on the Medicare horizon. The Centers for Medicare and Medicaid Services (CMS) appears to be moving closer towards revising its payment rules for speech-language pathology and audiology services.
ASHA received a Nov. 14, 2006, response from Herb Kuhn, acting deputy administrator of CMS, stating that the agency would consider professional work values for Medicare services provided by SLPs and audiologists. This positive communication is another step forward in ensuring proper valuation of speech-language pathology and audiology services, because the higher-valued professional—rather than technical—nature of the procedures would be recognized. CMS wrote that it will advise the American Medical Association Relative Value Update Committee (RUC) and the RUC Health Care Professionals Advisory Committee that “if the committee recommends the use of work values for these codes, CMS will consider their recommendation.”
At ASHA’s urging, CMS had sent the RUC a list of speech-language pathology and audiology procedures to be part of a major recurring review every five years. However, on April 15, 2006, the RUC deferred the issue until CMS provided guidance on the authority to assign work values to these services. The RUC asked to have the response by May 15, 2006. Consequently, ASHA withdrew the procedures from the five-year review process because CMS did not respond by the May 15 deadline. The November 2006 CMS letter places the procedures back in the mix for the professional work values process.
In September 2005, ASHA commented to CMS that the Medicare program itself recognized that audiology services would be significantly effected by an upcoming change in the elimination of the nonphysician work pool, a cluster of procedure codes that were insulated from revisions in the Medicare physician fee schedule that included many audiology codes and most of the new speech-language pathology codes. The nonphysician work pool will now be phased out over four years, and the impact on many audiology and speech-language pathology codes will be great unless the valuation process is revised to shift the services from a technical component to the more appropriate professional component.
ASHA will continue to work with CMS, Congress, and the entire audiology and speech-language pathology community to ensure that Medicare appropriately recognizes the importance of audiology and speech-language pathology services.
Table 1
  • Table 1: Audiology. 2006 and 2007 payment amounts for selected high-incidence audiology codes.
  • CPT Code, Description, 2006 Rate, 2007 Rate
  • 92541, Spontaneous nystagmus, $55.71, $56.47
  • 92557, Comprehensive audiometry, $49.65, $50.40
  • 92567, Tympanometry, $21.98, $21.60
  • 92585, Auditory evoked potentials, $103.84, $101.94
Table 2
  • Table 2: Speech-Language Pathology. 2006 and 2007 payment amounts for selected speech-language pathology services.
  • CPT Code, Description, 2006 Rate, 2007 Rate
  • 92506, Speech & language evaluation, $132.76, $138.33
  • 92507, Speech & language treatment, $62.53, $63.29
  • 92610, Dysphagia clinical evaluation, $133.40, $115.97
  • 92526, Dysphagia treatment, $83.75, $84.13
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December 2006
Volume 11, Issue 17