This detailed report was prepared by the AOTA Federal Affairs Department. ************
A House/Senate conference committee reported out a compromise Budget Reconciliation bill on December 18. The House voted to approve it on December 19. At publication, the Senate has not voted on the bill. Both houses must approve before it can be sent to the President for signing into law. The $39.7 billion budget package includes cuts to Medicare and Medicaid, increases in Medicare, and assorted other provisions relating to student loans and other programs. Summarized below are the main Conference Report items important to occupational therapy and consumers. Medicare Part B Outpatient Cap The bill enacts an exception to the annual cap for medically necessary therapy for one year (2006). However, the beneficiary or a representative of the beneficiary must apply for permission to provide the additional therapy beyond next year's limit of $1740 for occupational therapy and, separately, for physical therapy and speech-language pathology services. The Centers for Medicaid and Medicare Services (CMS) will have to institute a process by which beneficiaries or providers apply for additional services. The bill provides a protection for providers and consumers. If CMS does not provide an answer within 10-days, the additional therapy will be regarded as approved. Medically necessary will be defined as it is in current regulation for therapy. In addition, to produce some savings and also to promote payment only for medically necessary therapy, the bill requires CMS to improve the use of codes by providers to ensure that only appropriate therapy is being provided. Original proposals for these "code edits" were designed to apply a strict 3-unit limit per code per day. The final language provides language to require that the codes are "clinically appropriate," language suggested by AOTA. While not a moratorium, the alternative extra therapy approval option will allow patients to get needed therapy. The one-year limit will require that additional action be taken next year to prevent implementation of the cap in 2007. But most changes in the bill were included for only one year, such as the physician fee schedule increase. Medicare Physician Fee Schedule Increase Cuts to Medicare physician fee schedule (PFS )amounts of more than 4% would be averted for one year and fees would remain essentially level for 2006. All Medicare physician and therapy services are paid for under the PFS. There is a complicated formula used to calculate the payment amounts; over the past several years, the formula has resulted in reductions in payments. Physicians and others have protested these reductions and Congress has implemented limited changes to prevent cuts. For 2006 a one year "freeze" on physician payments is allowed. Earlier proposals to fix the PFS in both the House and Senate linked any change to PFS amounts to the implementation of a "pay for performance" system that would provide savings by paying for only "quality" health care services. The final conference report only asks for a study by the Medicare Payment Advisory Commission (MedPAC) of changes that could be made to the PFS to better adjust payments as the number of beneficiaries in Medicare increases. Medicare Home Health An adjustment for rural home health care payments for 2006 was included. Also, a Home Health Quality Improvement program will be instituted requiring each home health agency to submit data measuring health care quality beginning in 2007. A MedPAC report on a detailed structure of value based payment adjustment for home health services under Medicare was included. Medicare Post-Acute Care Payment Reform Demonstration Project The Secretary of Health and Human Services (HHS) is charged with establishing a 3-year demonstration program for purposes of understanding costs and outcomes across different post-acute sites. Under the demonstration, an individual who receives any post-acute care services (outpatient, home health, rehabilitation hospital, or nursing facility) services shall receive a single comprehensive assessment on the date of discharge from the actue care. The assessment would be used to examine the needs of the patient and the clinical characteristics of the diagnosis to determine the appropriate post-acute setting for that patient. Included within the demonstration project is a standardized patient assessment instrument to be used across all post-acute care settings to measure functional status and other factors during the treatment and at the time of discharge from each post-acute provider. AOTA submitted testimony to the Subcommittee on Health, House of Representative Committee on Ways and Means in June of 2005 that focused on current financing for post-acute care services in Medicare; the services available across the various post-acute settings; the patient assessment instruments used in each settings and the commonalities between them; and prospects and suggestions for moving ahead with a common patient assessment tool and more rational payment system based on beneficiary need rather than institutional setting. AOTA stressed that occupational therapy be an integral part of the plan of care of people transitioning into post-acute care and will continue to work with Congress and HHS to ensure the inclusion of occupational therapy within this demonstration project. Click here to view AOTA's testimony. http://waysandmeans.house.gov/hearings.asp?formmode=view&id=3968 Medicare Inpatient Rehabilitation Hospitals A one-year extension was included in the budget reconciliation bill on the phase-in of the inpatient rehabilitation facility (IRF) classification criteria - or "75% rule." The bill retains the 60% threshold for 2006, a 65% threshold for 2007, and will begin the 75% rule in 2008. CMS recently implemented the 75% Rule for IRFs, requiring that a percentage of patients, increasing over the next few years up to 75%, must be treated for one of thirteen specific conditions identified in 1984 in order for a facility to retain IRF status. IRF status gives the hospital the ability to receive adequate Medicare compensation due to the intense rehabilitation services that are provided. The list of conditions is viewed by most as outdated, failing to take into account medical advances of the past two decades and changing patient needs. AOTA will continue to work with Congress, HHS, and the CMS to study the impact this rule could have on occupational therapy and IRFs. Go to AOTA's Legislative Action Center to read more about the history of the 75% rule and to contact your Representatives and urge them to support the "Preserving Patient Access to Inpatient Rehabilitation Hospitals Act of 2005" (S. 1405/H.R. 3373) - a bill that freezes the phase in requirement at 50% while Congress and the Department of Health and Human Services study the impact of the restriction. Medicaid Although AOTA was successful in eliminating Medicaid cuts that specifically targeted therapy services, the impact of the Medicaid cuts proposed in the Conference report would be very damaging to Medicaid beneficiaries and could negatively impact access to occupational therapy. The cuts impact beneficiaries in many ways but the three most problematic changes include: * Changes to Early and Periodic Screening, Diagnostic, and Treatment service for children (EPSDT). * Increased Cost Sharing * Limitations on Targeted Case Management Services The Conference report allows states to reduce benefit packages for specific populations including the 29 million children on Medicaid. These changes could result in the elimination of EPSDT coverage mandates completely. Even if a state chooses not to eliminate EPSDT services, access would likely be reduced dramatically. Benefit changes including EPSDT are estimated by the Congressional Budget Office (CBO) to cut Medicaid by $1.3 billion over 5 years and $6.1 billion over 10 years. Increased cost-sharing or co-payments has a two-fold effect upon savings for the government and reduced access for beneficiaries. Cost sharing provides initial savings as beneficiaries are responsible for portions of their care with some low-income Medicaid beneficiaries having to pay 10% of their Medical bills. In addition, cost sharing has been demonstrated and is known to reduce utilization, particularly among low income families. This reduced utilization of medical care provides additional short term savings because people hold off and do not obtain the medical care they need. This section of the bill has been the most controversial because of its direct impact on beneficiaries and on long-term health outcomes. Cost sharing will cut Medicaid by $1.9 billion over 5 years with cuts exploding to $10.1 billion over 10 years. The bill tightens the definition of Targeted Case Management (TCM), reducing access to essential supportive services for Medicaid beneficiaries, particularly people with mental illness and people with developmental disabilities. These populations, among others, benefit from services covered under this category in order to maintain compliance with their medical and social service care plans. Changes in the bill shift costs from the federal government to states who will likely be forced to reduce access to targeted case management because of the inadequate funding provided in the bill. Changes to TCM are estimated to cut Medicaid by $750 million over 5 years and $2 billion over 10 years. The bill does make some improvements to Medicaid such as implementation of the Family Opportunity Act and the "Cash and Counseling" program as well as establishment of a demonstration project for "Money Follows the Person." (See below.) Family Opportunity Act The Conference Report includes a provision known as the "Family Opportunity Act" that gives states the option to allow families to purchase Medicaid coverage for children with disabilities. The language includes guidelines and limitations on who can participate in the program but allows significantly increased access to Medicaid for families below 300% of the poverty level and even includes exceptions for states to provide additional opportunities for families above that income threshold who have children with disabilities. Expansion of the "Cash and Counseling" Program The Cash and Counseling project that allows people with disabilities to purchase self-directed personal care services has been expanded and is now an available option for state Medicaid programs. This provision allows increased flexibility and control for people with disabilities to hire and supervise people they choose to provide the care they need. Demonstrated benefits of this program include more flexible timing of service that better meet the need of people with disabilities and empowerment by providing control directly to the beneficiary over the hiring and scheduling process. Safeguards and some reasonable limitations are included in the bill to help ensure quality care and safety for people choosing this option, but significant flexibility remains. Money Follows the Person Rebalancing Demonstration Project Organizations that advocate on behalf of people with disabilities and the professionals who work with them, including AOTA, have long lobbied for a seamless source of funding that would support an individual regardless of the care setting. Money Follows the Person will increase the continuity of care and help improve access to and the utilization of home and community based services. It will do this by eliminating funding barriers that often discourage and delay transition from institutional care to home and community based services. The demonstration project will provide Congress with additional information to use when considering future measures to rebalance the use of home and community based services rather than institutional long term care. -- Unsubscribe? [EMAIL PROTECTED] Change options? www.otnow.com/mailman/options/otlist_otnow.com Archive? www.mail-archive.com/otlist@otnow.com Help? [EMAIL PROTECTED]
