Medicare News
| For Immediate Release: | Contact: |
| Thursday, March 27, 1997 | CMS Office of Public Affairs 202-690-6145 |
For questions about Medicare please call 1-800-MEDICARE or visit www.medicare.gov. |
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HCFA PROPOSES MEDICARE SALARY GUIDELINES FOR THERAPISTS
The Health Care Financing Administration today proposed salary guidelines for services provided to Medicare beneficiaries by therapists furnished under an arrangement with providers.
"These proposed changes would result in savings to Medicare totaling $1.7 billion between now and 2001, and $3.9 billion between now and 2006," said HCFA Administrator Bruce C. Vladeck.
The proposed regulation, to be published in the Federal Register tomorrow, applies to the services of physical, occupational, speech, and respiratory therapists who furnish care to beneficiaries under a contractual arrangement with a provider, such as a skilled nursing facility or a home health agency, clinic, rehabilitation agency or public health agency. The proposal revises the current guideline amounts for physical and respiratory services, and introduces guideline amounts for occupational and speech-language pathology services.
The proposed guidelines, which do not apply to inpatient hospital and hospice services, would be used by Medicare fiscal intermediaries and carriers to determine the maximum allowable cost of the services, and would apply to services furnished beginning 60 days after publication of a final regulation.
Under the Medicare law, HCFA determines the reasonable cost of services furnished under a contract and pays the provider for the services, rather than the therapist or supplying organization. The reasonable costs for these contracted services may not exceed the salary costs the provider would normally incur in furnishing such services if the therapists were employees. An allowance also is made for certain additional costs that may be incurred by the contracting organization in providing the services.
Reasonable costs for contracted physical and respiratory services are limited by salary equivalency guidelines most recently issued by HCFA in 1983. The guidelines are updated by a monthly inflation factor.
Before today's proposal, HCFA had never issued salary equivalency guidelines for speech language pathology and occupational therapy services. Current payments for these services are based solely on reasonable cost.
Under this proposal, Medicare payment for physical and respiratory therapy services is projected to increase, while payment for speech language pathology and occupational therapy services is projected to decline.
"We decided it was necessary to modify the methodology used to establish the guidelines, as well as the monthly inflation factor, to more accurately reflect the reasonable costs of therapy services," Vladeck said.
HCFA has decided to use a blend of data sources for employee therapy wages rates for hospitals and skilled nursing facilities to establish "best estimate"; wage rates. The revised guidelines include a prevailing hourly rate based on the 75th percentile of salaries paid to full-time therapists by providers in a geographic area, by type of therapy.
