Lobbying Congress for Medicare Reimbursement

Bipartisan consensus that funding formula is broke – question is how to fix it


July 29, 2013 -- Just removed from a whirlwind trip to the nation’s capital, Bend-based physical therapist and consultant Tannus Quatre reported encouraging news in the struggle to reform Medicare reimbursement practices in the U.S.

The first sign is almost universal agreement that the Medicare funding system as it exists is broken and hurting patient care, said Quatre, who owns Vantage Clinical Solutions, a consulting firm based in Bend.

Unsustainable formula

The problem arises out of legislation passed as part of the 1997 Balanced Budget Act, which created a Sustainable Growth Rate (SGR) funding formula determining Medicare reimbursement payments for physical therapy and other types of primary care.

“The payment scheme makes it very difficult for physical therapists to earn reasonable reimbursement on Medicare patients,” Quatre said. “It impacts every physical therapist who works with Medicare patients in (Oregon).”

Economic volatility has crippled the SGR formula, requiring Congress to pass a nearly annual moratorium on payment reductions. Otherwise, physical therapists and other clinicians would see a 24 percent reduction in their Medicare reimbursements under the SGR, Quatre said.

Most recently, President Obama signed a one-year extension as part of the American Taxpayer Relief Act of 2012, which took effect Jan. 1. While continued short-term fixes are possible, physical therapists and other clinicians would like to see the uncertainty go away, Quatre said.

“What we’re looking for is a permanent fix to the sustainable growth rate,” he said. “The formula has fallen apart. It compensates providers in such a way that it doesn’t even compensate expenses in some cases.”

Quatre and Keith Glasser, a physical therapist from Portland, were among the 100 physical therapists selected by the American Physical Therapy Association (APTA) to represent Oregon in D.C. last week.

Representative Greg Walden (R-OR) and other members of Congress met with Quatre and discussed issues facing local providers, said Andrew Malcolm, communications director for Congressman Greg Walden (R-OR).

This week, the full Energy and Commerce Committee, of which Walden is a ranking member, will consider new legislation that would provide stable payments for the first two years with annual increases after that. The legislation would phase in a new system that would remove some of the incentives for fraud and reward providers who offer quality care for less, Malcolm said.

Walden visited medical providers in Bend last week in part to shore up support for the legislation, he said.

“This is something that Congress patches every year,” he said. “This would be a permanent solution. It would be a big relief for providers to have a permanent fix.”

Repeal the Therapy Cap

Also on Quatre’s agenda was finding a fix for another part of the 1997 legislation – the so-called “Medical Therapy Cap.” The arbitrary cap, which was created in an effort to balance the budget, limited the amount of coverage that a Medicare patient could receive for combined physical and speech therapy services to $1,900 annually.

Waivers are typically granted for the $1,900 amount, but a second cap of $3,700 requires more time-consuming paperwork, Quatre said.

At this higher level, physical therapists labor through the paperwork needed for a manual medical review, hoping they have checked the right boxes that will assure reimbursement. During the process, many patients lose continuity of coverage or decide not to seek care, he said.

“Anyone who needs physical therapy to recover from a serious injury or illness, such as a stroke, Parkinson’s disease, or joint replacement may be affected,” Quatre said. “Or anyone who needs physical therapy more than once during the year for different conditions because their coverage is not based on a condition or episode of care.”

The cap on Medicare coverage makes it difficult for patients who have more than one condition or complications from their initial injury, said Scott Ruby, co-owner and treating therapist at Joint Efforts Physical Therapy in Bend.

“Every now and then you have somebody who doesn’t heal at that rate and you risk going over the cap,” Ruby said. “For instance, I had a patient who had a rotator cuff repair, then she had diabetes, then she had a fall. They are only given that allotment of money and it’s supposed to last for the rest of the year.”

With a more outcomes-based funding formula on the way, there would not be a need for a therapy cap, said Congressman Walden’s communications director.

Expect a separate bill to repeal the therapy cap in Congress, Malcolm said.

“Many members are working with outside groups to see how that could be accomplished,” he said.

Opting Out of Medicare

Given the uncertainties created by the SGR and therapy cap, many doctors also would like to see an option to work with their patients outside the confines of the Medicare system, Quatre said.

“Considering how tough it is on the reimbursement side, a physical therapist might say he can’t serve his patients on this model,” Quatre said. “He would have to do such high volume and provide such generic care, that he would just opt out.”

The only option for PTs is to not see Medicare patients to begin with. It is currently not legal to work outside of the Medicare system, Quatre said.

“I’m going to charge you $100 per visit to provide the best care. That is not legal,” he said. “We’re not allowed to do it. Physicians can do that, but not physical therapists.”

Opting out may not be necessary with a reformed reimbursement system, Quatre said. With an expected influx of Medicare-eligible Baby Boomers on the way, the system needs to be fixed before it is overrun, he said.

To contact Jeff McDonald, email him at: [email protected].

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