[Congressional Record Volume 144, Number 118 (Wednesday, September 9, 1998)]
[Extensions of Remarks]
[Pages E1662-E1663]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




         THE MEDICARE REHABILITATION BENEFIT EQUITY ACT OF 1998

                                 ______
                                 

                        HON. FORTNEY PETE STARK

                             of california

                    in the house of representatives

                      Wednesday, September 9, 1998

  Mr. STARK. Mr. Speaker, I am pleased to introduce the Medicare 
Rehabilitation Benefit Equity Act of 1998. This bill will ameliorate 
the impacts on seniors needing outpatient rehabilitation services of 
coverage limits on those services imposed by the Balanced Budget Act of 
1997 (BBA). Dollar limitations on services will be replaced by a 
patient classification system effective July 1, 2000.
  Between 1990 and 1996 Medicare expenditures for outpatient 
rehabilitation therapy rose 18 percent annually, totaling $962 million 
in 1996. During that time, outpatient rehabilitation spending shifted 
substantially away from hospitals and toward rehabilitation agencies 
and comprehensive outpatient rehabilitation facilities (CORFs). 
Payments to agencies and CORFs rose at an average annual rate of 23 
percent and 35 percent, respectively.
  The BBA enacted substantial changes in Medicare's payment policies 
for outpatient rehabilitation services. Two limits are imposed on 
outpatient rehabilitation services--coverage for physical and speech 
therapy is capped at $1,500 per beneficiary per year; coverage for 
occupational therapy is subject to a separate cap of $1,500. The limits 
will become effective for services rendered after January 1, 1999. 
Rehabilitation services furnished in hospital outpatient departments 
are excluded from the caps.
  Unfortunately, these dollar limits do not take into account patient 
characteristics such as diagnosis or prior use of inpatient and 
outpatient services. Implementation of the limits will have a 
disproportionate effect on the most vulnerable Medicare beneficiaries 
and may place a financial burden on some beneficiaries.

[[Page E1663]]

  The Medicare Payment Advisory Commission recently examined the 
potential impact of the coverage limits and found that some patients 
were more likely to exceed the dollar limits than others. The 
Commission found that hip fracture patients had the highest median 
payments and stroke patients incurred the next highest payments. While 
Medicare spent, on average, about $700 per outpatient rehabilitation 
patient in 1996, half of all stroke patients exceeded the $1,500 
physical and speech therapy limit. In contrast, less than 20 percent of 
patients with back disorders exceeded the physical and speech therapy 
limit. In 1996 about one-third of patients treated in non-hospital 
settings (rehabilitation agencies and CORFs) incurred payments in 
excess of $1,500 for outpatient physical and speech therapy or $1,500 
for occupational therapy. Half of the patients affected by the limits 
exceeded them by $1,000 or more.
  The Medicare Rehabilitation Benefit Equity Act will minimize the 
inequity and disruption of the BBA limits without affecting the program 
savings. It requires the Department of Health and Human Services to 
develop and implement an alternative coverage policy of outpatient 
physical therapy services and outpatient occupational therapy services. 
Instead of uniform, but arbitrary, dollar limitations, the alternative 
policy would be based on classification of individuals by diagnostic 
category and prior use of services, in both inpatient and outpatient 
settings.
  The Medicare Rehabilitation Benefit Equity Act also requires that the 
revised coverage policy of setting durational limits on outpatient 
physical therapy and occupational therapy services by diagnostic 
category be implemented in a budget-neutral manner. The payment 
methodology will be designed so as to result in neither an increase nor 
decrease in fiscal year expenditures for these services. Current law 
provisions to adjust the annual coverage limits on outpatient 
rehabilitation therapy services by the medical economic index (MEI), 
beginning in 2002, are retained.
  The Medicare Rehabilitation Benefit Equity Act recognizes that the 
Department of Health and Human Services' Health Care Financing 
Administration currently lacks the data necessary to implement a 
coverage policy based on a patient classification system on January 1, 
1999. It further recognizes that assuring services for Medicare 
beneficiaries in the year 2000 is HCFA's number one priority. For these 
reasons, a phased transition to a patient classification coverage 
policy is necessary.
  I urge my fellow Members of Congress to join me in support of the 
Medicare Rehabilitation Benefit Act of 1998. Together we can ensure 
that implementation of the BBA dollar limits on outpatient 
rehabilitation services will not disproportionately affect our most 
vulnerable Medicare beneficiaries.

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