CMS Offers “Global Approach” as Alternative to Therapy Caps The Medicare outpatient rehabilitation therapy cap remains a major issue for speech-language pathologists in health care. Congress is set to reinstitute the cap if an alternative is not recommended this year. Eliminating the cap and developing a replacement payment system remains a major goal for both the professional and payer ... Policy Analysis
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Policy Analysis  |   February 01, 2005
CMS Offers “Global Approach” as Alternative to Therapy Caps
Author Notes
  • Ingrida Lusis, director of federal and political affairs, can be reached at ilusis@asha.org.
    Ingrida Lusis, director of federal and political affairs, can be reached at ilusis@asha.org.×
Article Information
Regulatory, Legislative & Advocacy / Policy Analysis
Policy Analysis   |   February 01, 2005
CMS Offers “Global Approach” as Alternative to Therapy Caps
The ASHA Leader, February 2005, Vol. 10, 2-28. doi:10.1044/leader.PA.10022005.2
The ASHA Leader, February 2005, Vol. 10, 2-28. doi:10.1044/leader.PA.10022005.2
The Medicare outpatient rehabilitation therapy cap remains a major issue for speech-language pathologists in health care. Congress is set to reinstitute the cap if an alternative is not recommended this year. Eliminating the cap and developing a replacement payment system remains a major goal for both the professional and payer communities.
Officials in the Office of Medicare Management at the Centers for Medicare and Medicaid Services (CMS) contracted with AdvanceMed in their quest to develop an alternative payment system. Most recently CMS and AdvanceMed announced a global payment approach for therapy services as a proposed alternative to the therapy caps at a December meeting with ASHA and other therapy organizations. CMS was mandated by Congress to study alternatives to the financial limitation on therapy services and contracted with AdvanceMed to review therapy claims and develop payment options.
The AdvanceMed global approach would be based on therapy services being reimbursed under the Medicare physician fee schedule; elimination of the therapy caps; ongoing data analysis; establishment of reasonable utilization limitations; development and reliance on national coverage decisions; and the use of a standardized instrument or three standardized outpatient therapy patient assessment instruments to describe patient conditions. AdvanceMed stated that the global approach was the most viable immediate approach because it would permit CMS greater flexibility in reducing unnecessary services and promote an evidence-based delivery system.
In assessing long-term options-should a global approach fail to contain costs-AdvanceMed also reviewed the feasibility of developing a prospective payment system for outpatient therapy services. In its report entitled “Strategies for Developing Short and Long-Term Therapy Payment Options,” AdvanceMed concluded that CMS now has a system in place that could be used to develop a beneficiary or condition-based prospective payment system. As part of the report, AdvanceMed proposed the development of a 21-group clinical classification system.
An initial review of the proposed classification system finds only six of the groups relate to speech-language pathology-communication, mental/cognitive, neurological-central, swallowing/feeding disorder, systemic, and general/non-specific impact/other. Conversely, there are nine groups for musculoskeletal disorders alone. The development of a classification system is still in the research phase and would need to be rigorously tested before being considered as a viable payment option.
Study’s Conclusions
In addition to proposing a global approach for payment of therapy services, the AdvanceMed study also presented five conclusions:
  • Speech-language pathology, physical therapy, and occupational therapy are distinctly different services.

  • CMS has the foundation for analyzing outpatient therapy services for policy development purposes.

  • A global approach is the most promising immediate approach to therapy payment policy.

  • Data analysis needs to be supplemented with clinical expertise, clinical and outcomes research, and expert opinion.

  • A new prospective payment system will take several years to develop and implement.

The report stressed the distinction of speech-language pathology services from physical therapy and occupational therapy. The report emphasized that SLPs treat different patient conditions, with different procedures, different durations and in differ ent settings. The report also concluded that a “one-size-fits-all” payment policy presents numerous vulnerabilities for Medicare and for beneficiaries in need of speech-language pathology services.
AdvanceMed looked at the cost impact of establishing three separate therapy caps. The review found that fewer speech-language pathology patients were estimated to surpass a three separate cap level than those beneficiaries seeking physical therapy and occupational therapy. Speech-language pathology also had the lowest average annual expenditure per enrollee. Moreover, the age distribution of speech-language pathology patients increased while it decreased for physical therapy and was relatively constant for occupational therapy. Speech-language pathology services are only 7% of overall utilization for 2002 claims while physical therapy is 75% and occupational therapy is 18%. Visit the CMS Web site for a copy of the reports.
Impact on Private Practice Clinicians
ASHA is currently analyzing the proposal and other alternatives to the caps and submitted comments to CMS on its proposed global approach. Although supportive of such a payment approach as an alternative to a financial limitation, ASHA has requested that CMS consider the financial ramifications of the private practitioner in the shift to a prospective payment system, as many private practitioners may not be able to absorb the financial risks inherent in that system.
Although CMS has proposed this alternative, there is no guarantee that Congress will adopt such a system. First, it is unclear how the Congressional Budget Office would determine the cost of such a global approach. Second, current federal budget deficits and the administration’s plans to balance the federal budget within the next five years may have an impact on any Medicare legislation this year. The current speculation on Capitol Hill is that Medicare will be targeted for substantial cuts this coming year. So while there is considerable support on Capitol Hill for ending the outpatient therapy cap policy, federal budget constraints may make it difficult for Congress to pass a costly alternative.
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February 2005
Volume 10, Issue 2