On Friday, February 17, 2012, Congress approved the Middle Class Tax Relief and Job Creation Act of 2012, which includes an extension of the Therapy Cap exceptions process through December 31, 2012.  The Senate approved the measure by a 60-36 vote, within minutes after the House approved it by a 293-132 vote.  President Obama is expected to sign into law upon returning to Washington.

The following are the major points of the Therapy Cap exceptions process legislative language included in the Middle Class Tax Relief and Job Creation Act of 2012:

Extension of the exceptions process through December 31, 2012.

When an exception is requested, the claim shall contain an appropriate modifier (such as the KX modifier) indicating services are medically necessary, and justified by appropriate documentation in the medical record.

All outpatient therapy services that exceed the $3,700 threshold shall be subject to a manual medical review process.  Details regarding how this manual medical process will be handled will be forthcoming.  The specific language Is:

(C)(i) In applying this paragraph with respect to a request for an exception with respect to expenses that would be incurred for outpatient therapy services (including services described in subsection (a)(8)(B)) that would exceed the threshold described in clause (ii) for a year, the request for such an exception, for services furnished on or after October 1, 2012, shall be subject to a manual medical review process that is similar to the manual medical review process used for certain exceptions under this paragraph in 2006. ‘‘(ii) The threshold under this clause for a year is $3,700. Such threshold shall be applied separately—‘‘(I) for physical therapy services and speech language pathology services; and ‘‘(II) for occupational therapy services.

Temporary application of Therapy Caps to the hospital outpatient settings.

Requirement for inclusion on the claim of the NPI of physicians who review the therapy plan.  The specific language is:

Each request for payment, or bill submitted, for therapy services described in paragraph (1) or (3) of section 1833(g), including services described in section 1833(a)(8)(B), furnished on or after October 1, 2012, for which payment may be made under this part shall include the national provider identifier of the physician who periodically reviews the plan for such services under section 1861(p)(2).

• Requires a MedPAC report on "improved Medicare therapy benefits" by June 15, 2013.  The specific language is:

(f) MEDPAC REPORT ON IMPROVED MEDICARE THERAPY BENEFITS.—Not later than June 15, 2013, the Medicare Payment Advisory Commission shall submit to the Committees on Energy and Commerce and Ways and Means of the House of Representatives and to the Committee on Finance of the Senate a report making recommendations on how to improve the outpatient therapy benefit under part B of title XVIII of the Social Security Act. The report shall include recommendations on how to reform the payment system for such outpatient therapy services under such part so that the benefit is better designed to reflect individual acuity, condition, and therapy needs of the patient. Such report shall include an examination of private sector initiatives relating to outpatient therapy benefits.

• HHS to collect additional claims based data beginning January 1, 2013.  The specific language is:

(h) GAO REPORT ON MANUAL MEDICAL REVIEW PROCESS IMPLEMENTATION.—Not later than May 1, 2013, the Comptroller General of the United States shall submit to the Committees on Energy and Commerce and Ways and Means of the House of Representatives and to the Committee on Finance of the Senate a report on the implementation of the manual medical review process referred to in section 1833(g)(5)(C) of the Social Security Act, as added by subsection (a). Such report shall include aggregate data on the number of individuals and claims subject to such process, the number of reviews conducted under such process, and the outcome of such reviews.