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With the recent Supreme Court decision upholding the individual mandate and with it the Affordable Care Act, the therapy community and the larger healthcare world have been wondering: what comes next?  With new regulations, increased access, and big legislative battles still to come,  confusion reigns.  Today we are happy to welcome Mandy Frohlich, the Senior Director of Federal Affairs at the APTA.  Mandy is here to answer some legislative questions and talk a little bit about the APTA lobbying efforts on Capitol Hill.  We thank Mandy for joining us here at Advanced Medical and as always, urge you to stay informed and get involved.


1.With the recent supreme court decision narrowly upholding the affordable care act, what has been the overall mood and reaction from APTA members and officials? 


2. What is the official position of the APTA in regards to the Affordable Care Act and the individual mandate?   

APTA remained neutral on both the original legislation and subsequent Supreme Court ruling.  APTA has for years been an advocate for a health care system that includes rehabilitation as a core benefit, demonstrates the value of physical therapy to patients, embraces innovation in reforms that are patient centered, and provides a solution to a system that for too long has been high in costs and disparate in outcomes and quality. We will continue to work with legislators, policy makers, insurers, and other decision makers to ensure that these priorities are addressed as this law is implemented and as future health care reforms are considered—whether at the national or state level, or through individual private payment systems.


3. The APTA has a strong history of bipartisan support.  How has the rise in gridlock and poisoned relations in Washington affected APTA outreach?  Has it become harder to stay neutral in policy disputes?

APTA has always enjoyed bipartisan support in Congress for the majority of its priority policy issues.  Though there are challenges in Washington the association has still encountered an incredible level of willingness to address issues like extension of the therapy cap exceptions process and inclusion of physical therapists in student loan repayment programs.    Like all associations, operating in this new environment requires persistence on the part of the association and its membership to accomplish its priorities.


4. Some governors have vowed to turn down federal money expanding medicaid and the Paul Ryan budget calls for block-granting funds to the individual states and eventually turning Medicare into a voucher program.  What is the APTA position in regards to Medicare and Medicaid reform?

APTA is monitoring various proposals on Medicare and Medicaid reform.  It is likely that the 113th Congress will consider policy affecting both entitlement and tax reform.    The association will continue to pursue policy that ensures that rehabilitation remains a core benefit in any reform, just as it has been doing under the ACA.  Additionally, the association will have a seat at the table in recommending and negotiating payment policy reforms.


5. It seems the key battle for the therapy community has been to abolish the therapy caps put in place with the balanced budget act of 1997.  A number of moratoriums and cap exceptions have luckily been worked out over the years. Can you give us a brief history of the therapy caps and give us any insight or odds on full repeal?

In 1997, Congress passed the Balanced Budget Act that created an annual financial limit on physical therapy and speech-language pathology services and a separate “cap” on occupational therapy for all outpatient settings, originally with an exemption for hospital outpatient departments. This action was not based on data, quality of-care concerns, or clinical judgment—its sole purpose was to save resources needed to balance the federal budget. Since 1997, Congress has acted 9 times to prevent the implementation of the therapy caps by moratoriums and an exceptions process, implemented in 2006, in which the physical therapist uses a modifier to signify that the patient’s condition will require medically necessary and clinically appropriate physical therapy above the arbitrary financial limitation. In 2012, Congress modified this process to provide for exceptions based on the clinical judgment of the physical therapist through use of a claims based modifier for services above the therapy cap (currently at $1,880). Congress further authorized language that requires the Centers for Medicare and Medicaid Services (CMS) to implement a manual review process, beginning no later than October 1, 2012, for therapy services that exceed $3,700. Congress also directed CMS to apply this new 2-step exceptions process to the hospital outpatient department in 2012. This latest exceptions extension will expire December 31, 2012.

Given the upcoming elections and the current budget environment it is likely that Congress will address this issue in 2012 through an additional extension of the exceptions process into 2013.  The association has been heavily involved in congressional negotiations regarding full repeal of the therapy caps particularly in relation to ongoing efforts to establish a new payment methodology for outpatient therapy.   When Congress returns in the 113th Congress it is likely that it will begin to look at long-term reform of the Sustainable Growth Rate (commonly referred to as the “doc fix” or physician fee cut).  The association believes this may be an opportunity to also address full repeal of the therapy caps.


6. Can you talk about some of the new regulations put in place with the most recent 1 year extension of the caps exceptions and avoidance of the physician fee cut? Specifically the manual review process, KX modifier, and the 2 reports due in 2013 on outpatient therapy?

In the summer of 2011, the association presented congressional committees and leadership with legislative proposals that would direct federal agencies to reform the therapy benefit while also beginning to look at long term solutions to repeal the therapy caps.  These efforts resulted in the inclusion of a provision in recent legislation that extended the therapy cap exceptions process until the end of 2012, one of a handful of Medicare extenders contained in the final bill. Under this legislation, key changes were made to the exceptions process that establish a path to implementing an alternative payment system for therapy. Moving forward, APTA interaction with the Centers for Medicare and Medicaid Services (CMS) and other federal agencies regarding implementation of these provisions will be critical to successful execution of the new payment methodology.

Under H.R. 3630, the Middle Class Tax Relief and Job Creation Act of 2012, Congress directed that reforms be made to the therapy cap exceptions process. Some of those reforms are as follows:

First, the legislation mandates consistent use of the KX modifier upon reaching the cap, which is $1,880 for 2012. This provision does not alter the exceptions process but expresses congressional interest in uniformity of use of the KX modifier.

Additionally, starting on October 1, 2012, patients with claims that meet or exceed $3,700 in annual therapy expenditures will be subject to a manual medical review. The legislation designates that this medical review will be similar to the process used following implementation of the Deficit Reduction Act in 2006. The $3,700 threshold will be applied to the combined physical therapy/speech-language pathology cap; a separate $3,700 threshold will be applied to the occupational therapy cap. This provision is key to establishing precedent for moving away from an arbitrary cap on therapy and toward a policy that more clearly reviews patient condition and need for care. The $3,700 threshold is roughly double the current cap of $1,880 and affects approximately 5% of patients if averaged across settings. CMS is currently working to finalize the medical review process and APTA will issue guidance to membership on that process.  APTA has advocated for a process that allows for an expedient turnaround time of claims submitted for medical review.

In addition to the reforms Congress implemented on the therapy cap exceptions process, 2 key reports by federal agencies were also mandated in the legislation. First, and of critical importance to implementing an alternative payment system, is a report by MedPAC due in the summer of 2013 that will review methods to improve the outpatient therapy benefit. The report will include recommendations to Congress on how to reform the payment system so that the benefit is better designed to reflect individual acuity, condition, and therapy needs of the patient. The report will examine private sector initiatives relating to outpatient therapy benefits. As the association works to implement an alternative payment system for therapy, involvement of federal stakeholders will be critical for successful execution of the new methodology.

MedPAC will play a central role in the formation of the new payment system, and APTA has already begun to meet with MedPAC leadership regarding the association’s proposal. The timing of the MedPAC report to Congress will be key in supporting the move to a “severity and intensity” based system.

The legislation also requires the Government Accountability Office (GAO) to issue a report to Congress regarding the manual medical review process. The report, due May 2013, will include data on the number of individuals and claims subject to the process, the number of reviews conducted, and the outcome of the reviews.

Finally, beginning January 1, 2013, the legislation designates that the Secretary of Health and Human Services shall implement a claims-based data collection strategy that is designed to assist in reforming the Medicare payment system for outpatient therapy. The system will be designed to provide for the collection of data on patient function during the course of therapy services in order to better understand patient condition and outcomes.   In the recently released physician fee schedule, CMS outlines a proposed process for this data collection strategy.  APTA will soon be releasing detailed guidance on this process and will be offering comments to CMS regarding the data collection program.


7. The Independent Advisory Board is another controversial part of the Affordable Care Act.  Can you explain its mission and give some insight on how they will value preventative care and therapy services?

The Independent Payment Advisory Board, or IPAB, is an entity created under the Affordable Care Act  with the task of  achieving specified savings in Medicare.  The ACA outlined a process for this board to begin its work in 2015.  As such, little detail is available on how the board would make specific decisions to achieve required savings.  Congress has historically authorized changes to Medicare payment rates and programs though several advising bodies have had a role in making recommendations regarding payment policy.  Though Congress would have the ability to overturn IPAB decisions, APTA is concerned that if the IPAB is established a limited number of non elected officials would have broad payment policy authority that could have sweeping impact on the Medicare program and its millions of beneficiaries.  For this reason, APTA has opposed the implementation of this provision of the ACA.


8. Can you talk about some ways for our therapists to follow the latest news, get involved, and give some benefits of APTA membership?  9. What are some other pressing issues on the APTA lobbying agenda? 

APTA recommends that members consider joining APTA’s PTeam grassroots program.  It’s a free program that allows members to receive Information Bulletins and Action Alerts from APTA’s Government Affairs Department.  Information Bulletins update PTeam members on legislative developments impacting physical therapists and their patients.  Action Alerts are sent to PTeam members when the APTA would like them to contact their legislators about an issue.  For example, as 2013 approaches APTA will be advocating to extend the therapy cap exceptions for Medicare-covered therapy and will rely on our members of PTeam to help send the appropriate message to the Hill.  As the issue develops, we will be sending Action Alerts to PTeam members asking them to call, write, or email their legislators and encourage them to support the extension to the therapy cap exceptions process.  In addition to the Information Bulletins and the Action Alerts, as a PTeam member you will receive the PTeam Alert Newsletter.  This is a quarterly electronic publication that gives a detailed legislative and regulatory update, as well as an update on APTA’s grassroots strategy for the quarter and information about the PT-PAC.

Second, one of APTA’s best resources is the Advocacy website where you can find information on federal and state issues and well as the PT-PAC.  The Federal Advocacy page lists the priority legislative and regulatory issues for 2012 such as therapy cap repeal and student loan reimbursement.  It is also where you can find position papers, the latest news stories and press releases from APTA, letters to the U.S. Senate and House of Representatives, APTA testimony, and frequently asked questions.  The Advocacy site provides background information on issues, bill co-sponsors and podcasts as well.

Finally, APTA has set-up an advocacy website for physical therapy patients.  The Patient Action Center is a fantastic resource; it provides information on issues that affect patient treatment.   The Patient Action Center also links to The Patient Legislative Action Center, which allows patients to email their legislators on key issues like therapy caps.


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