What are Medicare outpatient therapy caps?

Studies clearly show that the quality of life for people with paralysis improves greatly with extensive physical therapy. In fact, researchers have cited rehabilitation and therapy programs as critical to a person's recovery following a spinal cord injury or another form of paralysis.

However, in 1997 Congress placed payment caps on outpatient rehabilitation services under Medicare. Under these caps, Medicare covers a set dollar amount for outpatient physical therapy, occupational therapy, and speech-language pathology services.

After the annual cap has been reached, beneficiaries face the decision of forgoing care, paying out-of-pocket, or traveling to an outpatient hospital for continued care. By limiting coverage for needed therapy services that exceed the payment limit to one setting only – hospital outpatient departments – the cap denies Medicare beneficiaries choice in selecting the provider best suited to meet their health care needs.

Recent action

Congress has recognized the harm therapy caps and has voted several times to extend an exceptions process that allows some people to exceed the cap. Most recently, Congress voted to extend the therapy caps exception process until December 31, 2017.

Next steps

Unless Congress acts, the current therapy cap exceptions process will expire on December 31, 2017. The caps that take effect on January 1, 2018, will impact beneficiary access to occupational and other skilled therapies.

The Reeve Foundation will use the next few years to continue the important work of educating Members of Congress on the devastating impact that therapy caps would have on people living with spinal cord injury and paralysis, and will continue to urge Congress to come up with a permanent solution to the problem.