Congress acts to reduce payment cuts to Medicare Part B but challenges still remain for OT
Congress is set to pass a massive $1.7 trillion legislative package, the Omnibus Budget Reconciliation Act of 2023 (omnibus) that both funds the government through FY 2023 and includes significant new healthcare policies. In this legislation, Congress took steps to reduce pending payment cuts to Medicare Part B services including a reduction of the 2023 cut from 4.5% to 2%.
The Centers for Medicare & Medicaid Services’ (CMS) final 2023 Medicare Physician Fee Schedule (PFS) proposal included cuts to critical services provided by occupational therapy practitioners and dozens of other Medicare healthcare providers. The 4.5% cut to the fee schedule’s conversion factor is in addition to cuts in 2020 and 2021. The main driver of these cuts has been the “budget-neutrality” requirement for the PFS, which requires an increase in one service to be offset with reductions elsewhere. These “budget-neutrality” cuts have caused disruption to health care providers, and are implemented by mathematical formula, without regard to patient outcomes, provider resource needs, or any other policy.
A strong provider coalition, including AOTA, worked together to urge Congress to stop the full cut and support healthcare providers during this time of increased expenses due to inflation. Despite these efforts and thousands of health care providers urging Congress to take action, the final omnibus still allows a 2% cut to take effect. The omnibus also included a provision to add 1.25% to the 2024 fees schedule (it is not yet known what the 2024 conversion factor will be).
Health care providers have made it clear that the current Medicare Part B payment system is broken, and Congress has indicated that it plans to begin work on reforming the system next year. AOTA is ready to go on offense to fix long standing inequities in fee schedule payments and to ensure that the payment system works for occupational therapy practitioners.
Occupational Therapy Assistants
In October 2021, the Stabilizing Medicare Access to Rehabilitation Therapy (SMART) Act was introduced to help mitigate the impact of Medicare Part B cuts to services provided by occupational therapy assistants (OTAs) and physical therapist assistants (PTAs). One part of the bill would change the supervision of OTAs and PTAs in private practice from “direct” to “general.” This would increase staffing flexibility in those settings and recognize the expertise of therapy assistants. The Senate followed up by introducing a bill (S. 5) that would also change this requirement, while an independent report commissioned by a group representing therapy providers demonstrated that this provision would save the government money. Although multiple key Congressional staff members were interested in this provision, it was not included in the omnibus. We will continue to work for passage in the new Congress.
A second major policy in the SMART Act was an exemption from the 15% cut for OTA and PTA services provided in rural and medically underserved areas. An analysis of the data from the commissioned report shows that OTAs and PTAs provide a higher proportion of services in these areas. A separate study commissioned by AOTA also showed that therapy staffing levels per resident minute were lower in these areas. We had hoped savings from the supervision policy would pay for this targeted exemption; however, we were unable to gain strong Congressional support for this policy at this time.
AOTA and the coalition of therapy providers will build on this end of year momentum for changing supervision requirements and continue to push to support occupational therapy assistants in the new Congress. You can follow our work on these and other issues on the Advocacy section of the AOTA website, and write to Congress by visiting the AOTA Legislative Action Center.