CMS has announced the therapy cap for 2010 is $1860, representing a $20 increase over the 2009 therapy cap. Transmittal R1851 to the Medicare Claims Processing Manual, dated 11/13/2009 and the accompanying MLN Article MM6660 provide information on the implementation. The Balanced Budget Act of 1997 (BBA) established a $1500 therapy cap for physical therapy (including speech-language pathology) and a separate therapy cap of $1500 for occupational therapy. The Deficit Reduction Act of 2005 implemented the therapy caps exceptions process based on medical necessity of therapy beyond the caps.
Although the Medicare Improvements for Patients and Providers Act of 2008 (MIIPPA), Section 141, extended exceptions to therapy caps through December 31, 2009, there is indications in the various healthcare reform proposals that the therapy caps exceptions process will be exteneded though 2011, although there is no certainly at this point.
While Medicare beneficiaries will enjoy the benefit of an additional $20 annually of therapy services under under each therapy cap, therapy providers should brace for the projected 21.2% reduction in the conversion factor in the Medicare Physician Fee Schedule for 2010.
The therapy caps are applicable to outpatient settings including private practice physical, occupational and speech therapy practice, rehab agencies (ORFs) and comprehensive outpatient rehab facilities (CORFs). Hospital outpatient therapy departments with provider-based status are exempt from the therapy caps and provide a safety net for beneficiaries to receive additional therapy that may not be covered by a diagnosis code, co-morbidity, or complexity identified to meet the medical necessity requirements.