In an effort to reduce Medicare costs, Congress passed a provision in the 1997 Balanced Budget Act that has severely affected Medicare patients who require extensive rehabilitative services. The provision, which became effective Jan. 1, 1999, has resulted in severe limitations to services to those who need rehabilitation the most.

Since January, Medicare has limited reimbursement for physical therapy and speech-language pathology services not rendered in a hospital's outpatient department to $1,500 a year. A similar limitation also exists for occupational therapy services. Too often these caps mean that beneficiaries who have suffered a stroke or serious injury are unable to get all the rehabilitative services required to help them resume normal activities of daily living.

These arbitrary limits were placed on rehabilitative services without the benefit of Congressional hearings or studies to determine how patients' access to care would be affected. Now, unfortunately we are discovering the devastating effects of the caps. I have introduced "The Medicare Rehabilitation Benefit Improvement Act,"which would permit beneficiaries who meet certain conditions to receive the rehabilitative services they need based on their health condition, rather than on financial considerations. A companion bill has been introduced in the U.S. Senate by Senators Charles Grassley of Iowa and Harry Reid of Nevada. My legislation, HR 1837, would allow beneficiaries to qualify for services above the $1,500 limit if they:

* Are subsequently diagnosed with an illness, injury or disability that requires additional medically necessary rehab services;

* Are in need of further rehab services due to an additional diagnoses or incident that exacerbates the beneficiary's condition after receiving rehab services from an initial diagnosis;

* Require hospitalization if additional rehab services are not provided; or

* Meet other criteria as determined by the Secretary of Health and Human Services.

Many seniors are in need of extensive rehabilitative therapy. Studies show that close to 13 percent of Medicare beneficiaries who receive rehabilitative services outside of a hospital exceed the $1,500 cap. The Medicare Payment Advisory Commission estimates that one-out-of-seven Medicare beneficiaries who seek rehab therapy will reach one of the caps this year.

While many seniors may not require services in excess of $1,500 a year, those who are most in need of rehabilitation often exceed this dollar limitation. Many of them either struggle to pay out of pocket or discontinue needed rehabilitative services.

The Balanced Budget Act was an important bipartisan agreement that helped balance the federal budget. Unfortunately, there were some unintended consequences that were never anticipated. It's now time to correct these mistakes so that seniors can get the rehabilitative services that they need should they suffer a stroke or major illness.