The last-minute budget deal President Trump recently signed into law boosted military funding, provided tens of billions of dollars in disaster aid and raised the debt ceiling. But buried deep within the bill’s 652 pages was a small item that reveals much about how health-care financing often gets done — or undone — in Washington.
The history of “Section 50202, Repeal of Medicare payment cap for therapy services” dates to the Balanced Budget Act of 1997. It was then that limits were officially imposed on how much Medicare would pay for occupational and physical therapy annually.
Over the next two decades, however, something happened every time those limits were about to kick in. The American Physical Therapy Association managed to postpone implementation — sometimes for just months, sometimes for another year or so.
Justin Moore quit his job as a physical therapist in Missouri and moved to Washington in 1999 specifically to help the association appeal full-time to lawmakers. Now the group’s chief executive, Moore recalls recruiting thousands of physical therapists to protest on Capitol Hill, hours lobbying in congressional offices and 11th-hour victories to keep the caps from taking effect.
When the association finally triumphed last month — with the caps’ permanent dissolution — a saga marked by legislative twists, procrastination and budgeting witchcraft finally came to an end. Its final outcome carries a not insignificant cost: With the coverage thresholds having reached $2,010 worth of occupational therapy and the same amount for physical therapy, per patient per year, the nonpartisan Congressional Budget Office estimated repeal at more than $6 billion over the next decade.
“This is a miniature version of . . . the inefficiencies of health policy and health care,” said Thomas Miller, a resident fellow at the conservative American Enterprise Institute, a Washington think tank. “We do a lot of things that burn up resources and energy, and we treat them as a big deal, and that tends to keep you down in the trenches, shooting at things in front of you and not looking at the larger picture.”
The therapy caps came as an amendment to the 1997 budget bill, part of a “big push to reform entitlements,” recalled Katherine Hayes, director of health policy at the Washington-based Bipartisan Policy Center, who worked at the time for the late Rhode Island Sen. John H. Chafee (R), then chair of the Senate subcommittee on health care.
Its inclusion was somewhat arbitrary — “an assignment . . . to get some savings in the health sector,” recalls Sen. Benjamin L. Cardin (D-Md.), who at the time was a junior member of the House Ways and Means Committee, where the proposal originated.
Others recalled some concern that Medicare was paying too much for physical therapy and a hope that limiting coverage might help control those costs.
Since lawmakers “had to reach the target [for savings], it went into the package. Once it went into the package, it was enacted and became law,” said Cardin, who introduced numerous bills over the years attempting to repeal the caps.
Almost immediately, backlash came from a small but impassioned therapy contingent, willing to devote the bulk of its lobbying resources to this one issue. Again and again, they would succeed — at least partially — as lawmakers on both sides of the aisle balked when it came to actually implementing the caps.
That resistance translated into Capitol Hill rallies starring speakers such as Maine Republican Sen. Susan Collins, who would wear and remove baseball caps — metaphorically “lifting the cap,” Moore recalled. It also meant phone-a-thons from the nation’s physical therapists, who would call on Congress to extend the delay by attaching legislative language to a must-pass spending measure.
The therapy lobby kept the legislative patches going, but efforts always fell short of a full repeal. This solution allowed lawmakers to have it both ways: They did not have to take a generous popular benefit away from voters, but they continued to support a budget amendment aimed at taming runaway spending.
“For a number of years, we thought [the cap] was not a thoughtful approach,” said Cybele Bjorklund, who worked from 1995 to 2015 as a Democratic congressional staffer. “Many Republicans also realized pretty early on this was not good policy. But again — nobody wanted to then pay to get rid of it.”
Periodically, Congress sidestepped the issue by tucking delays into a hodgepodge of small health initiatives known as “extenders.” In 2006, Congress switched to simply allowing for easy exceptions for patients who needed therapy beyond the stipulated limits.
The ups and downs of the therapy-cap provision kept the American Physical Therapy Association busy, providing fodder to keep mobilizing members. Political gamesmanship and partisan bickering resulted in brief lapses — in late 2003, for a month in 2006 and in early 2010 — when lawmakers failed to patch together a bill in time.
An effort to incorporate the caps’ repeal into the 2010 Affordable Care Act failed, partially because Democrats wanted the sweeping health-care law as a money saver, Bjorklund recalled. That meant every penny counted, and even a few billion dollars represented dead weight.
In 2015, a proposed Senate amendment to a larger bill on doctor payments would have ended the therapy caps for good. It was ruled out of order after falling two votes short of a motion to waive concerns about its relevance.
That exhaustive 20-year effort laid the groundwork for this month’s deal. Just hours after Trump signed the sweeping legislation, Moore celebrated the victory with cupcakes in his Virginia office. “I’ve got to figure out what to do next,” he joked.
Kaiser Health News is a nonprofit news service covering health issues. It is an editorially independent program of the Kaiser Family Foundation that is not affiliated with Kaiser Permanente.