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Spending Caps on Therapy Could Complicate 'Doc Fix' Deal

By Melissa Attias, CQ Roll Call

April 2, 2015 -- The House-passed package to replace Medicare's physician payment formula doesn't include a permanent repeal of caps on how much the program spends on rehabilitation therapy, but proponents say the issue could resurface as an amendment and throw a new wrinkle into the debate when the Senate takes up the measure after recess.

Maryland Democrat Benjamin L. Cardin, who has introduced legislation (S 539) to scrap the caps with Maine Republican Susan Collins, is hoping for an opportunity to offer a repeal amendment, according to spokeswoman Sue Walitsky. The House passed the physician payment package (HR 2) in a 392-37 vote before leaving town March 26, while the Senate put off its consideration of the so-called permanent "doc fix" after a nearly all-night series of votes on its fiscal 2016 budget resolution (S Con Res 11).

Amendment votes would give senators who were largely left out of negotiations on the House package the opportunity to showcase their priorities, even if they aren't adopted. But if the Senate successfully amends the measure it would return to the House, increasing odds that the deal negotiated by House Speaker John A. Boehner of Ohio and Minority Leader Nancy Pelosi, D-Calif., could unravel.

The timing and number of amendment votes—if any—are uncertain. Don Stewart, spokesman for Majority Leader Mitch McConnell of Kentucky, said in an email that members will discuss the path forward but expect it to be done quickly.

Before recess, Minority Whip Richard J. Durbin of Illinois said Democrats wanted to vote on three amendments, including one that would provide a four-year funding extension for the Children's Health Insurance Program instead of the two years in the package. Senate Democrats have also expressed concern about a provision that applies abortion restrictions to funding for community health centers, which could make reproductive health the focus of an amendment fight.

Medicare's annual limits on how much it pays for outpatient rehabilitation services for beneficiaries were established in the 1997 Balanced Budget Act (PL 105-33), the same law that created the sustainable growth rate formula, or SGR, that the House-passed package would repeal. Congress initially blocked the caps from taking effect and created a temporary exceptions process in 2006 (PL 109-171) that allows patients to receive medically necessary services beyond the annual limits, which has been repeatedly extended.

Although language to repeal the caps was included in a Senate version of the SGR legislation in the last Congress, the House-passed bill opts for another extension of the exceptions process through the end of 2017. The Congressional Budget Office estimated that current language would cost $1.9 billion, while supporters said permanently repealing the caps instead would cost between $8.8 billion and $13 billion depending on how it's done. Sending the package back to the House with such a large price tag would threaten the deal.

Mandy Frohlich, vice president of government affairs for the American Physical Therapy Association, said SGR and the caps were created together and should be fixed together. Her group joined with the American Speech-Language-Hearing Association and American Occupational Therapy Association in a March 24 plea to Congress for a repeal of the caps in the bill.

"To do one without the other would be a missed opportunity," Frohlich said.

She also expressed concern that decoupling the issue from SGR could mean that the caps go into effect when the next extension expires at the end of 2017, cutting people off from care. She called it bad policy to arbitrarily cap therapy services, noting that stroke patients, those with Parkinson's disease and others who need therapy could be affected.

The influential seniors lobby AARP also wants a repeal of the caps, according to Ariel A. Gonzalez, director of the federal health and family team in government affairs. AARP supports the House package, he said, but is concerned about the way the legislation covers the cost by increasing Medicare beneficiaries' out-of-pocket expenses without requiring cost-sharing from physicians and the prescription drug industry.

"We remain optimistic that we'll be able to work with the Senate to get improvements on behalf of Medicare beneficiaries," Gonzalez said.

While the Senate could vote on a "very limited number" of amendments to the SGR package, according to Minority Leader Harry Reid of Nevada, proponents of other provisions that were excluded from the deal are still looking for ways to advance them. 

John Falardeau, senior vice president of government relations for the American Chiropractic Association, said his group remains concerned that chiropractors and other providers were excluded from two provisions in the bill. Although the organization approached senior members in both chambers, Falardeau said the deal was pretty much closed by that point, adding they hope to get some help in the rule-making process.

Legislation (S 688, HR 1343) supported by the American Hospital Association that would factor in patients' socioeconomic status when determining hospital readmission penalties also didn't make it into the package. Tom Nickels, senior vice president of federal relations for the lobbying group, said there is bipartisan support for the issue in the House and Senate and that his organization will keep pressing for it.

At the same time, groups such as AHA have praised the package for excluding some policies that they feared would get wrapped into legislation ticketed for President Barack Obama's desk. In a March 26 letter to the Senate, the organization said the bill "rejects a number of flawed policy options," including paying hospital outpatient departments at the same rate as physician offices and cuts to physician training programs and rural community hospitals.

The hospital organization also applauded the package for excluding another delay of a new coding system for health services known as ICD-10, which was postponed until Oct. 1, 2015, in last year's payment patch (PL 113-93) temporarily averting cuts to Medicare doctors dictated by SGR. Nickels said opponents of another delay will still have to stay vigilant to ensure it doesn't appear in another piece of legislation before October.

Maryland Republican Andy Harris urged Health and Human Services Secretary Sylvia Mathews Burwell to be open to creating a hardship exemption for the new system at a February hearing.

Still, Lynne Thomas Gordon, CEO of the American Health Information Management Association, said her organization has found more acceptance of moving to ICD-10 compared to last year. The group has reached out to the Texas Medical Association—which has advocated for delaying the system—to offer to help get physicians ready, she added.

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