[Congressional Record Volume 145, Number 65 (Thursday, May 6, 1999)]
[Extensions of Remarks]
[Pages E890-E891]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




       INTRODUCTION OF LEGISLATION TO REFORM THE $1500 REHAB CAP

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                        HON. FORTNEY PETE STARK

                             of california

                    in the house of representatives

                         Thursday, May 6, 1999

  Mr. STARK. Mr. Speaker, the Balanced Budget Act of 1997 made some 
long-overdue savings in Medicare and has resulted in extending the life 
of the Part A Trust Fund from about 2001 to 2015. As budget policy, it 
has been a success.
  There are some health policy problems, however.
  In the BBA, we capped most outpatient rehabilitation services at 
$1500 per patient per year for physical and speech-language therapy, 
and for occupational therapy. This was good budget policy, in that it 
provided an immediate limit to a sector that was growing at totally 
unacceptable rates that seemed to have little to do with the true need 
for rehabilitation services. It is terrible health policy, however, 
because in fact there are individuals who desperately need more than 
$1500 in therapy.
  I am introducing The Medicare Rehabilitation Benefit Equity Act today 
to provide exceptions from the $1500 cap for those who clearly need 
extra services. It will also require that we move to a diagnostic 
payment system that makes good health policy sense. Under my proposal, 
the $1500 dollar limitations on services will be replaced by a patient 
classification system effective January 1, 2002.
  While the BBA policy needs to be modified, some limitations on 
rehabilitation services were clearly necessary. 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.
  Clearly, Congress had to act--and using a meat-ax approach--we did. 
It is time to revisit this issue and substitute some decent health 
policy for blunt budget policy. 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 $1500 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 exceed of $1500 for outpatient physical and 
speech therapy or $1500 for occupational therapy. Half of the patients 
affected by the limits exceeded them by $1,000 or more.
  My legislation will minimize the inequity and disruption of the BBA 
limits without substantially affecting the program savings. It allows 
for a system of exceptions identical to those proposed in legislation 
by Senator Grassley. It then requires the Department of Health and 
Human Services to develop and implement a new coverage and payment 
policy of outpatient physical and speech-language therapy services and 
outpatient occupational therapy services. Instead of uniform, but 
arbitrary, dollar limitations, the new policy would be based on 
classification of individuals by diagnostic category and severity of 
diagnosis, 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 and speech language therapy and occupational therapy services 
by diagnostic category be implemented in a budget-neutral manner. This 
change in payment is related to overall utilization, it will not change 
the use of fee schedules or affect the payment rates for providers of 
these services. The payment methodology will be designed to be budget 
neutral in relation to the exceptions policy created by this 
legislation. 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, 
2000. It further recognizes that assuring services for Medicare 
beneficiaries in the year

[[Page E891]]

2000 is HCFA's number one priority. For these reasons, a phased--and 
longer than desired--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 Equity Act of 1999. 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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