Medicare and Medicaid Extenders Act of 2010 Passes

Providers, Nursing Home Associations and the Centers for Medicare & Medicaid Services (CMS) are  all breathing a collective sigh of relief today with the passage of The Medicare and Medicaid Extenders Act of 2010 (H.R. 4994). Included in this legislation:

• RUG-IV delay was reversed - No retroactive adjustments needed
• Therapy Cap Exception process was extended through 12/31/11
• Fee schedules frozen through 12/31/11 eliminating 25% cut

RUG-IV Effective 10/1/10 – No Hybrid System or Rate Adjustments Needed

This legislation reverses the one year deferral of RUG-IV included in the Patient Protection and Affordable Care Act (PPACA). RUG-IV is now effective October 1, 2010 and no Hybrid system to crosswalk the 66 group MDS 3.0 to the 53 group Hybrid RUG-III rates will be needed. Since providers have been paid at RUG-IV rates, no retroactive settlement will be required and uncertainty regarding an accumulating liability or receivable is eliminated.  

Therapy Caps Exceptions Process Extended through 12/31/11

The therapy exception process has been extended through December 31, 2011. Without this extension to the exception process, the Part B therapy caps would have been reinstated on January 1, 2011.  Given the continuation of the exceptions process, it remains imperative that therapists and clinical staff document medical necessity and support the diagnosis code selected for billing.  

Effective January 1, 2011, the Medicare Part B therapy cap limit for Occupational Therapy alone and Physical/Speech Therapy combined is $1,870.  

Fee Schedules Frozen – No 25% Cut

Congress has once again enacted a temporary “doc fix” for the physician fee schedules. Payments have been frozen at the current levels through December 31, 2011 thus eliminating the scheduled cut of approximately 25% to payments for Medicare Part B services, including therapy and radiology. The cut results from a “sustainable growth rate” factor included in the flawed payment formula and annual intervention by Congress to delay cuts in prior years. Since the initial formula called for a balanced budget, each year that the cuts are delayed increases the potential cut the following year.