As many of you know, a cap on the payment of outpatient physical therapy, speech-language pathology and occupational therapy services by Medicare went into effect on September 1, 2003.  These separate Medicare payment caps were $1,590.00 per annum combined for outpatient physical therapy and speech-language pathology services and $1,590.00 per annum for outpatient occupational therapy services.  The caps on outpatient rehabilitation services were put into place by the Balanced Budget Act of 1997, but were delayed by Congress on several occasions through December 31, 2002, with the implementation of these caps in 2003 being delayed until September 1, 2003 by the Centers for Medicaid & Medicaid Services (“CMS”).

            The Medicare Prescription Drug and Modernization Act of 2003 (“Act”) implemented a new moratorium on the Medicare payment caps for outpatient physical therapy, speech-language pathology and occupational therapy services for claims received during the period from December 8, 2003 through December 31, 2005.  However, the aforementioned caps were left in place for all claims received during the time frame from September 1, 2003 through December 7, 2003.

            Please note that the outpatient rehabilitation therapy caps were not repealed.  Further study is going to be undertaken to determine the future of these caps.  As such, providers who provide outpatient rehabilitation services will again be watching in 2005 to see if the moratorium is extended or if the caps are reinstated or finally repealed.