Northwest Association of Cardiovascular
and Pulmonary Rehabilitation

Washington, Idaho, Alaska

Affiliate Society of AACVPR
American Association of Cardiovascular
 and Pulmonary Rehabilitation


Legislastive Focus

 Legislative Priority – AACVPR
 Day on the Hill 2019
Section 603 of the 2015 Budget Act

YouTube Video from DOTH 2019

    Background: Medicare payment methodologies differ dependent on site of service. This is due to the actual payment methodology used by Medicare to determine payment amounts. For example, when Medicare computes payment for services reimbursed in a physician office, three variables are computed: the relative value of the service (RVU), the practice expense associated with the specific service, and the malpractice expense associated with the specific service.

    When Medicare computes payment for the same service provided in a hospital outpatient setting, the agency uses charge data reported on every claim submitted to Medicare as well as hospital cost report data, also submitted by the hospital. Therefore, it is not unusual for the same service to receive different payment amounts based on the "site of service."

    To address this problem, Section 603 of the 2015 Budget Act mandated that hospitals would no longer be able to bill under the hospital outpatient methodology, i.e., higher reimbursement rate, under certain conditions:

    1. If an existing off campus (beyond 250 yards) service moves to a new location, the hospital is required to bill at the physician fee schedule rate rather than the hospital outpatient rate.

    2. If a hospital opens a NEW hospital outpatient service, that new service must be within 250 yards of the main campus in order to receive hospital outpatient reimbursement; otherwise, the physician fee schedule rate applies.

    Impact on Pulmonary/Cardiac Rehabilitation (PR/CR): Hospitals that choose to expand or relocate (beyond the 250 yard threshold) services must bill at the physician fee schedule rate, thereby creating a very strong disincentive for hospitals to improve access to PR/CR services. (A very limited number of exceptions to this exist.)

    CMS recognizes this reality as an "unintended consequence" of Section 603, but the Agency states it has no authority to address our problem.

    Solution: We are seeking sponsors for legislation that would exempt hospitals from Section 603 and the implementing regulations by creating specific thresholds. As long as no physician specialty, nationwide, bills for any CPT or HCPCS code under the Medicare Physician Fee Schedule in an aggregate amount greater than $1 million (or amount in that range) in the previous year for which data are available, that code (or codes) would be exempt from Section 603 requirements.

    As noted above, because billing for 93798 and G0424 under the physician fee schedule has no physician specialty billing exceeding $1M, those codes would be exempt from Section 603 requirements.  

 How Can You Help??

High Co-Pays

  • Medicare MedAdvantage plans can require co-pays between $20-60 per visit (for copays higher than $40 call 1-800-Medicare to report)
  • Affects CR, PR, OT, PT, and Speech Therapy
  • Discourages participation and or limits visits
  • May require legislation at the state level to cap co-pay amounts.
  • PT Association of Washington - opportunity to work together
  • State Senate Bill 6123
    • sponsored by Senator Dammeier
    • asked for CR and PR to be included
    • bill is tabled for this legislative session

Next Steps

  • Continue to work with PT Association for state support
  • Possible letter from Senator Cantwell to CMS
  • Insurance Commissoin Guidance
  • Constituent letters at some point
  • No current strategy from AACVPR at this time
  • For copays higher than $40 per visit - call 1-800-Medicare to report
more questions contact:  Karen Edwards 
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