When your honey-do list involves analysis of Medicare expenditures

The title explains my role in all this fully.

A rather complex report was commissioned by AOTA that involved data related to the distribution of fee for service therapy spending in the Medicare program, as well as how different cap thresholds would impact the system.  The report also breaks out information about where spending is happening based on place of service.

Now the reason why I was given this task is because if you read the report, and my first paragraph, your eyes might already be glazed over.  My purpose will be to put all of this in very plain language.

Here are the three primary takeaways from this report, and I will provide the detail below each statement:

1. The 'cap problem' impacted PT significantly more than it impacted OT.

The reason why the 'cap problem' impacts PT significantly more than it impacts OT is based on volume.  Of all the Medicare patients out there who use Part B services, 90% of them get PT.  By contrast, of all the Medicare patients out there who use Part B services, 22% of them get OT.  On the basis of numbers alone, which of course directly translates to associated costs, this is a MUCH LARGER problem for PT than it is for OT.

Related to spending, PT is responsible for 73% of all Medicare Part B spending, and OT is responsible for 19% of all Part B spending.  Speech is responsible for 8%.

Based on this very clear and incontrovertible data, the cap problem impacted PT more on the basis of volume and money.

2. The vast majority of OT services were delivered to people who did not have a problem with the cap.

81% of all people receiving OT under the Medicare Part B system remained below the cap.  Another 14% of all people receiving OT under the Medicare Part B system exceeded the cap but were still under the review threshold, meaning that they did not have a cap problem either.  That means that 95% of all people receiving OT under the Medicare Part B system did not have a real problem with the cap. 

I was personally not surprised to see this validated in data, because I am acutely aware in my own personal experience that the cap was never a problem for me in my private practice.  The data confirms my experience.

3. Most of the Medicare over-spending, especially for OT, happens in nursing homes (no shock there).

So who had the cap problems in OT?  Of the 19% of people who exceeded the cap, 73% of them were in SNF settings.  That is an interesting point of data, but anyone who has been studying the problems in long term care can attest to the fact that SNFs are the primary culprits in fraudulent billing.


The policy goal of eliminating the Medicare therapy cap met the needs of PT much more than it met the needs of OT.  That is factual based on volume and money.

95% of all patients who receive OT were either under the cap or within the limits of the review threshold.

To the very small degree that patients receiving OT had a problem with the cap, the vast majority of them were in nursing homes.  It would have been much more prudent to direct policy efforts toward  eliminating fraud and abuse in Medicare B costs in nursing homes.

So who received the primary benefit of removing the cap?
Physical therapists
Nursing home owners

Who pays for all of this?
OTAs who suffer an offset that includes a pay differential for their services, which has a real possibility of spilling over into other payment systems.  We don't yet know what the home health offsets will do.

What about patients?  
A very small percentage of patients (5%, most of whom are in nursing homes) exceed the cap.  We just advocated for policy that impacts the entire OT profession and the result is benefit for other professions, benefit for profiteering nursing homes, and damage to OTA practice.

Factually, this cap repeal achieves something for only a very small number of OT patients.


The Moran Company (2017, March 10). Analysis of the distribution of Part B outpatient therapy spending in relation to the Medicare outpatient therapy cap.  Available from AOTA.


Anonymous said…
How can you find the document? I looked on AOTA but can't locate it. Thanks.
The report was given to me in paper form, but I am told it can be located on their Federal Affairs Policy Blog using the following link https://otconnections.aota.org/aota_blogs/b/aota_federal_policy/archive/2018/02/01/congress-and-repeal-of-the-medicare-therapy-cap.aspx

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