title: Refinements of the Medicare Outpatient Therapy Annual Expenditure Limit Policy.
abstract: BACKGROUND
  A Medicare beneficiary's annual outpatient therapy expenditures that exceed congressionally established caps are subject to extra documentation and review requirements. In 2011, these caps were $1,870 for physical therapy and speech-language pathology combined and $1,870 for occupational therapy separately.
  
  
  OBJECTIVE
  This article considers the distributional effects of replacing current cap policy with equal caps by therapy discipline (physical therapy, occupational therapy, and speech-language pathology) or a single combined cap, and risk adjusting the physical therapy cap using beneficiary characteristics and functional status.
  
  
  METHODS
  Alternative therapy cap policies are simulated with 100% Medicare claims for 2011 therapy users (N=4.9 million). A risk-adjusted cap for annual physical therapy expenditures is calculated from a quantile regression estimated on a sample of physical therapy users with diagnoses and clinician assessments of functional ability merged to their claims (n=4,210).
  
  
  RESULTS
  Equal discipline-specific caps of $1,710 each for physical therapy, occupational therapy, and speech-language pathology result in the same aggregate Medicare expenditures above the caps as 2011 cap policy. A single combined-disciplines cap of $2,485 also results in the same aggregate expenditures above the cap. Risk adjustment varies the physical therapy cap by as much as 5 to 1 across beneficiaries and equalizes the probability of exceeding the physical therapy cap across diagnosis and functional status groups.
  
  
  CONCLUSIONS
  One limitation of the study was the assumption of no behavioral response on the part of beneficiaries or providers to a change in cap policy. Additionally, analysis of risk adjusting the therapy caps was limited by sample size.
  
  
  CONCLUSIONS
  Equal discipline-specific caps for physical therapy, occupational therapy, and speech-language pathology are more equitable to high users of both physical therapy and speech-language pathology than current cap policy. Separating the physical therapy and speech-language pathology caps is a change that policy makers could consider. Risk adjustment of the therapy caps is a first step in incorporating beneficiary need for services into Medicare outpatient therapy payment policy.
authors.affiliation: P. Amico, PhD, RTI International, 1440 Main St, Ste 310, Waltham, MA 02451 (USA). pamico@rti.org.
authors.forename: Peter
authors.initials: P
authors.lastname: Amico
authors.affiliation: G.C. Pope, MS, RTI International.
authors.forename: Gregory C
authors.initials: GC
authors.lastname: Pope
authors.affiliation: P. Pardasaney, DPT, ScD, RTI International.
authors.forename: Poonam
authors.initials: P
authors.lastname: Pardasaney
authors.affiliation: B. Silver, BA, Brown University, Providence, Rhode Island.
authors.forename: Ben
authors.initials: B
authors.lastname: Silver
authors.affiliation: J.A. Dever, PhD, RTI International.
authors.forename: Jill A
authors.initials: JA
authors.lastname: Dever
authors.affiliation: A. Meadow, ScD, Center for Medicare and Medicaid Innovation, Centers for Medicare & Medicaid Services, Baltimore, Maryland.
authors.forename: Ann
authors.initials: A
authors.lastname: Meadow
authors.affiliation: P. West, DPT, MPH, Center for Medicare Services, Centers for Medicare & Medicaid Services.
authors.forename: Pamela
authors.initials: P
authors.lastname: West
mesh_terms: D003363:Cost Control; D018166:Health Care Reform / Q000191:economics*; D005102:Health Expenditures / Q000706:statistics & numerical data*; D006801:Humans; D007349:Insurance, Health, Reimbursement / Q000191:economics; D006278:Medicare / Q000191:economics*; D009788:Occupational Therapy / Q000191:economics*; D010045:Outpatients / Q000706:statistics & numerical data*; D026761:Physical Therapy Specialty / Q000191:economics*; D013066:Speech-Language Pathology / Q000191:economics*; D014481:United States