Medicare Therapy Caps

What are the Medicare Therapy Caps?

The Balanced Budget Act of 1997 created limits, or caps, on the amount of outpatient physical, speech language, and occupational therapy a Medicare beneficiary could receive each calendar year.  Beginning in 1997, Congress voted several times to keep the caps from going into effect.  However, on January 1, 2006, Congress allowed the therapy limits to take effect.  

For 2011, Medicare covered a combined therapy cap of $1,870 for physical therapy and speech language therapy, and a separate cap of $1,870 for occupational therapy services.  Once the limit of $1,870 is reached, beneficiaries who require additional services in a 12-month period are for 100% of the cost.  On December 23, 2011, Congress passed, and the president signed, a continuation of the therapy cap exceptions process that sets the therapy cap at $1,880 for physical therapy and speech language therapy, as well as for occupational therapy.  Barring further action, this extension expires February 29, 2012.

Exceptions to the Medicare Therapy Caps

To mitigate the impact of the therapy caps on Medicare beneficiaries who need therapy services beyond the $1,880 cap, in 2006, Congress created an exceptions process for services deemed medically necessary.  

Unfortunately, the exceptions process is temporary and must be reauthorized by Congress almost every year.  PAN supports a repeal of the Medicare therapy caps.  People with Parkinson’s disease commonly have a medical need for physical and speech language therapy.   The Medicare therapy caps place an unnecessary burden on many individuals with Parkinson’s and other diseases, whose annual costs for these services exceed the cap.  In addition, if an exception is not granted by Medicare, the beneficiary may face the decision of forgoing care, paying out of pocket for the services, or traveling to an outpatient hospital for continued care.  PAN supports the Medicare Access to Rehabilitation Services Act of 2011 (H.R. 1546/S. 829), which would eliminate Medicare therapy caps all together.