MEDICARE CAP ON REHABILITATION SERVICES

This research paper explores the reasons why Congress imposed in 1997 caps on reimbursement under the Medicare program of charges for various types of outpatient rehabilitation services, the specific content of such caps, proposals for removing such caps and the rationales therefor.

Caps Imposed by the Balanced Budget Act of 1997

Under Part B of the Medicare program, full reimbursement was available, subject to a 20 percent coinsurance payment by the beneficiary and a $100 annual deductible, for rehabilitation services provided to eligible patients on an outpatient patient by qualified medical service providers. To be eligible for home health care generally under Medicare, the beneficiary would have to show that they were homebound and needed intermittent care. While there were limits to the number of hours of reimbursable nursing and home aide assistance per week, no limits beyond the coinsurance and deductible provisions were applicable to services provided by care providers which constituted physical therapy, speech therapy or occupational therapy.

Section 4541 of the Balanced Budget Act of 1997 (the Act), which was passed by the Congress on July 30-31, 1997 and signed into law by President Bill Clinton on August 5, 1997 for the first time placed a dollar limit (of $1500) per annum per Medicare beneficiary (patient) on the reimbursability of rehabilitation services, beginning with services provided as of January 1, 1999, except

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ion has been willing to subordinate its own misgivings about the Medicare provisions to its desire to get a balanced budget agreement with the Republicans" (16). In short, the $1500 cap in the Act was one of many cuts in the Medicare program, including a number in the area of home health care, which were designed to save an estimate $115 billion over the succeeding five years and which were enacted hurriedly without very much deliberation over their consequences. Pressures for Repeal Even though the caps themselves are not scheduled to go into effect until January 1999, McGinley and Jeffrey report "as the reimbursement cutbacks [in other home health care areas] kicked in this year, Congress was deluged with complaints that elderly beneficiaries were being hurt by the changes as home-care providers all over the country cut services or went out of business" (A 3). The campaign for repeal of the $1500 caps on the reimbursement of rehabilitation services was not, however, spearheaded by senior citizens groups such as the Association for Retired Persons but rather by industry lobbying groups, such as the APTA, the American Occupational Therapy Association and the American Speech-Language-Hearing Association (ASHA). A bill to repea

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