Therapy cap

In 1997 Congress established per-person Medicare spending limits, or therapy cap for nonhospital outpatient therapy, but responding to concerns that some people with Medicare need extensive services, it has since placed temporary moratoriums on the caps. The current moratorium is set to expire at the end of 2007. The therapy cap is a combined $1,740 (USD) Medicare cap for physical therapy and speech language pathology, and a separate cap for occupational therapy.

Medicare patients requiring rehabilitation from disabilities, car accidents, hip injuries, stroke, and other ailments would be limited to roughly two months worth of treatments at an outpatient therapy clinic. Any patients that exceed the cap, whether they are healed or not, would have to stop therapy, or pay for the therapy services out of their own pocket.

Purpose and History of Therapy Cap
The therapy cap was originally passed with the Balanced Budget Act of 1997. Its purpose and effective result was to reduce Medicare spending by limiting outpatient therapy payments.

The original cap was $1,500 (USD). The effective date of the original $1,500 cap was January 1, 1999; however, there were several legal challenges to the therapy cap that temporarily halted its implementation. The moratorium was further extended by the passage of Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 1999 and Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000.

In December 2006, Congress passed The Tax Relief and Health Care Act of 2006 which provided exemptions for the therapy cap and allowed patients with Parkinson's disease and muscuskeletal disorders to continue treatments until the end of 2007.

Controversy
Several medical associations and organizations including the American Physical Therapy Association have lobbied against therapy caps because the bill inadvertently restricted disabled seniors, stroke patients, and other severe cases from receiving therapy treatments.

Studies
The Government Accountability Office have concluded through an independent study that the therapy caps are not meeting the needs of patients.

The Study and Report on Outpatient Therapy Utilization by the Centers for Medicare and Medicaid Services (CMS) released on September 2002 concluded that older patients require more therapy than what the cap allowed: “patients who are female, older, minorities, live in certain geographic regions, require the services of institutional providers and suffer from complex medical conditions are more likely to require more costly outpatient therapy services than the general outpatient therapy population.”

The American Heart Association concluded that the Medicare caps are costing the government more money in the long run, especially to stroke patients. According to their study, arbitrary caps on rehabilitation therapies punish stroke patients who often undergo needed extensive rehabilitation programs. More than 5.4 million Americans, including 4.4 million people with Medicare, are living with the consequences of stroke. The failure to properly treat and rehabilitate stroke patients costs $21.8 billion annually in lost productivity and disability expenses.