Medicare To Impose New Payment Approach, AOTA Will Continue Advocacy

Nov. 3, 2010, Bethesda, MD - Medicare will change the structure of its payment system for therapy services on January 1, 2011 which will impact access to therapy services for some of the most at-risk patients, as outlined in the final version of the Medicare Physician Fee Schedule Final Rule which was released yesterday. 

AOTA's advocacy work along with our coalition partners achieved partial success in reducing the originally proposed multiple procedure payment reduction (MPPR) cut from 50% to 25%, reducing the expected impact on therapy payments from $500 million to $250 million. 

These deep reductions apply across all therapy disciplines-occupational therapy, physical therapy, and speech-language pathology-and fail to recognize the distinct nature of each. 

The American Occupational Therapy Association (AOTA) strongly believes that the policy is inappropriately blind to the separation of these three distinct disciplines and contravenes other Medicare law and agency guidance, which distinguishes between the disciplines in terms of benefits, payment, and separate medical necessity standards. 

Because Medicare is often used as a model for private and other public payers, the precedent is concerning and should be of critical interest to every occupational therapy practitioner, regardless of practice setting or payer. 

"We have to work hard to counter this problematic policy," responded AOTA President Florence Clark, PhD, OTR/L, FAOTA. "It will put unreasonable constraints on access to occupational therapy services for Medicare beneficiaries. It also fails to distinguish the unique contributions that each of the rehabilitation professions makes to the recovery of those who are facing catastrophic illness, disability, or the challenges that can surface as we age. 

The combining of the three therapies is unjustifiable. AOTA will continue to work aggressively to change this policy. The failure to differentiate the three much-needed types of therapy creates a commodity-type reimbursement structure which, without sound justification, devalues the three professions. We must protect consumer access to services that improve function and independence so people can live life to its fullest. We must band together to show occupational therapy in high definition in outcomes, efficiency, and long-term cost savings." 

The underlying construct of the policy remains indefensible, however, and is based on a flawed analysis of incomplete data. 

"We are exploring a wide range of legislative, legal, and administrative options to fight this fundamentally unfair proposal; AOTA is determined to explore every avenue available to us to modify the impact of this rule," states AOTA Executive Director Fred Somers. 

Other Elements of the Fee Schedule Rule Important to Occupational Therapy: 

  • The therapy cap amount for occupational therapy in 2011 is set at $1,870 with no exceptions process (absent Congressional intervention).  
  • New quality reporting measures were approved for occupational therapists under the Physician Quality Reporting System (PQRS).  
  • Other across-the-board fee schedule cuts of nearly 30% will result from projected changes to the sustainable growth rate (SGR) conversion factor.  
  • The Centers for Medicare & Medicaid Services has made clear it will continue to pursue alternative payment mechanisms for therapy services.  

Founded in 1917, the American Occupational Therapy Association (AOTA) represents the professional interests and concerns of more than 140,000 occupational therapists, assistants, and students nationwide. The Association educates the public and advances the profession of occupational therapy by providing resources, setting standards including accreditations, and serving as an advocate to improve health care. Based in Bethesda, Md., AOTA's major programs and activities are directed toward promoting the professional development of its members and assuring consumer access to quality services so patients can maximize their individual potential. For more information, go to                                                               


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