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Senate passes Deficit Reduction Act

Rehab Regs, December 23, 2005

The Senate passed the conference report on the Deficit Reduction Act of 2005 (S. 1932) in a 51-50 vote, with the tie breaking vote cast by Vice President Dick Cheney on Wednesday, according to an American Occupational Therapy Association press release. The bill is nearly identical to the House-passed Deficit Reduction Act of 2005, which includes a proposal to allow a one-year fix for the cap on outpatient therapy.

Due to small changes to a provision related to Medicaid liability for hospitals and the stripping of two small policy reports that have no budget impact, the amended budget reconciliation bill must now return to the House of Representatives to be passed again in its final form. The House must adopt the Senate-amended version before the President can sign it, as the two chambers must report out identical bills.

As of press time, it is unclear as to when the House will vote on the bill again, since most members have returned home for the holidays.

In terms of the outpatient therapy cap, the bill makes the following changes for 2006:

• Patients who reach the cap (approximately $1,760) will be able to apply for additional services.
• Medicare must determine if the additional therapy applied for is medically necessary and then approve or deny the services.
• An answer must be provided within 10 days, or the additional therapy is considered approved.
• Medicare must implement improvements in the use of CPT codes to assure that only appropriate therapy is provided.

The bill, produced by a conference between Senate and House Republican leaders, provides for an interim cap solution that allows patients to apply to receive medically necessary care beyond the cap level.

The bill also includes a leveling of physician fee payment amounts for 2006 and 2007, which in turn increases Part B payments for therapy and extends the implementation of the inpatient rehabilitation facility "75%" rule to allow an extension through 2006 for implementation at the 60% level, and in 2007 at the 65% level.

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