Congress Fails to Stop Payment Cuts for Occupational Therapy

Effective, January 1, 2024, the overall payment rates for outpatient occupational therapy services under Medicare were reduced by an estimated 3.1% compared to 2023 payments. This decrease follows several years of cuts related to structural issues with the Medicare Physician Fee Schedule (MPFS). While these cuts are specific to outpatient Medicare therapy payments, many other payors base their payment rates on the MPFS.

AOTA worked to convince Congress to stop these cuts as continued payment rate reductions are unsustainable, especially given the impact of inflation on healthcare providers. We worked with a large coalition of other healthcare specialty groups who have also seen payment rates cut over the past several years to ask Congress to stop the 2024 payment cuts and to put the MPFS on a sustainable path. Additionally, your grassroots actions resulted in more than 5,000 letters on this issue being sent to Capitol Hill.

Despite these efforts, Congress allowed the cuts to go into effect on January 1. They again failed to act last week when they passed a bill to fund the federal government through March 8. This bill included some crucial Medicare provisions but did not include a fix for MPFS payment cuts.

Congress’s failure to act was surprising. At the beginning of December, 194 bi-partisan members of the House of Representatives sent a letter to House leadership asking them to prioritize action preventing these cuts. Two key committees, the House Energy and Commerce Committee and the Senate Finance Committee had already passed legislation to reduce the cuts by 1.75% and 1.25% respectively, a crucial step to Congress passing a fix into law.

Given this inaction, Congressional champions are exploring the possibility of passing a long-term MPFS payment fix to stop the continued cuts and to return payment policy to a sustainable path for all providers including occupational therapy practitioners.

Congress is unlikely to act to reduce the MPFS cuts until March when government funding runs out again. It is rumored that if they take action, any fix will not be applied retroactively to January 1 with increases only applied moving forward.

Congress must hear from healthcare providers if they are going to prioritize any long-term fix or even a short-term adjustment. Please write to Congress today, and tell them they must stop these ongoing cuts.