President Obama has signed into legislation the American Taxpayer Relief Act and I want to share with you the relevant therapy provisions:

• No 2% sequester cut to Medicare providers
• The SGR fix is extended through December 31, 2013
• The legislation does not preclude the implementation of the 2013 physician fee schedule final rule, so the various code changes within the fee  schedule will go forward for 2013
• Therapy  cap exceptions process is extended through December 31, 2013, including the manual medical review process for outpatient therapy services that exceed the $3700 threshold
• Multiple Procedure Payment Reduction (MPPR) for therapy is increased to 50% effective on April 1, 2013 
• Work Geographic Adjustment – The existing 1.0 floor on the “physician work” index is extended through December 31, 2013
• Increase  statute of limitations for recovering overpayments – This provision increases the statute of limitations to recover overpayments from three to      five years, based on recommendations from the Office of Inspector      General (OIG) at the Department of Health & Human Services and saves $0.5 billion
• Repeals the CLASS Program, which has been dormant for more than a year due to HHS’ inability to design a financially viable plan, and creates the Commission on Long Term Care to develop a plan for the establishment, implementation, and financing of a high-quality system that ensures the availability of long-term services and supports for individuals
• The bill includes language to provide new limited protections for beneficiaries from the economic consequences of claims that are denied for not meeting the exceptions criteria (including claims subject to MMR). More detail on this to come.

While Congress has extended the doc fix and the therapy cap exceptions process, including the $3,700 threshold, and imposed the MPPR at 50 percent, Congress will have to come back in two months and address the debt ceiling and the sequester. The legislation delays the sequester for two months, which under current law would have required there to be across-the-board cuts imposed as of yesterday, January 2, 2013. This would have resulted in a 9.4% reduction in Defense and an 8.2% cut in domestic discretionary programs. Medicare cuts to providers under the sequester are limited to 2%, and Medicaid is exempt from the sequester.

When they address these issues, more offsets will have to be found. So, our sector will be at risk again for cuts. The increase in the MPPR was indeed a disappointment which our provider associations lobbied against, however, the merits of the policy were really not an issue; it was just a way to pay for what the Senate needed to do so we as an industry should be prepared that we have not yet seen the worst.

Please watch for additional information from our Compliance Department regarding continuation of the MMR process—it remains crucial that we (therapy) partner with you (provider) to monitor when a resident is approaching the $3700 threshold so that we can submit a request for approval of additional services in time to avoid lapses in coverage to the beneficiary.  We strongly urge you to communicate to the resident regarding the financial limitations on rehab services.   We will also be scheduling training on the new G-Code and Functional Limitation Status Reporting requirements which are effective January 1st as a voluntary submission but become mandatory July 1st requiring that all claims for Part B Medicare therapy services must include information in the form of non-reimbursable G codes regarding a patient’s functional limitation.  This (as with the MMR Process) will require close coordination and communication between therapy and the business office.