Medicare Coverage of Outpatient Therapy Services

Outpatient Therapy Caps

The Balanced Budget Act of 1997 placed limitations on the amount of financial coverage available to Medicare beneficiaries receiving outpatient rehabilitation therapy services, including physical therapy, speech-language pathology services, and occupational therapy. For combined physical therapy and speech language pathology services, the limit on incurred expenses is $1,880 in 2012; the limit is $1,880 for occupational therapy services. A beneficiary must cover the deductible and pay 20% coinsurance, then Medicare will cover the remaining 80% up to the annual cap.

The therapy cap “exceptions process” was put in place to compensate for these limits and allow beneficiaries to seek coverage  of medically necessary rehabilitation services beyond the cap. The exceptions were reauthorized/extended until 2013 in the Middle Class Tax Relief and Job Creation Act of 2012, passed in late February 2012.

The current therapy cap exceptions process will expire on December 31, 2012. CPR  is concerned about the the devastating impact that therapy caps can have on people who need rehabilitative services and urges Congress to develop a permanent solution to the therapy cap problem.

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