New Medicare Rules Pose Tough Choices

His speech slowed by stroke and half his body weakened by it, 84-year-old Lewis Williams faced an ugly choice: Was it more important to walk or talk?

As a former salesman who enjoyed chatting with neighbors near his Gainesville, Fla., apartment, Williams came to depend on his voice just like anyone else.

On Jan. 1, 1999, Williams learned that new Medicare rules would keep the government from paying more than $1,500 a year for his speech and physical therapy combined. He could divide the money between the therapies, or spend the entire amount on one.

The decision for Williams--surprised as he was at having to choose--was simple. He wanted control of his speech. Besides, physical therapy had returned some stability to the right side of his body, so he stopped it.

It didn’t take long for his doctor to notice. By the end of April, with his mobility stiffening and Medicare therapy money gone, Williams’ frail health worsened. One day, while waiting for a friend to park the car at a restaurant, Williams fell and broke his hip.

Doctors wanted to operate, but they had trouble stabilizing his heart rhythm. Two weeks after his fall, Williams died.

Opponents of the Medicare limits that stopped his therapy--put into law under the Balanced Budget Act of 1997--argued that Williams should never have had to choose between two necessary therapies.

“He shouldn’t have had to worry about making those kind of unconscionable choices,” said Sally Brandt, rehabilitation services director at the University of Kansas Medical Center. “He might still be with us.”

Lewis Williams was one of an estimated 200,000 elderly or disabled people expected to feel the pinch of therapy caps last year.

Congress approved the caps in a desperate effort to curb a system whose poor oversight encouraged huge government payouts to therapy companies.

Budget-crunchers projected the limits would save Medicare nearly $2 billion over the next five years, under a larger effort to keep the federal health insurance program solvent.

Therapists conceded some reform was necessary, but they seethed after Congress agreed on $1,500 caps--by most measures an arbitrary limit, therapists said.

Many lawmakers agreed.

“It wasn’t well thought out when we first did it,” said U.S. Sen. Charles Grassley (R-Iowa). “It was kind of an experiment, not a totally wrong experiment, but in areas of Parkinson’s, diabetes, diseases like this, well, you just can’t rehabilitate with that cap.”

Reaction to Law Was Fast, Furious

The fallout was nearly immediate. Just weeks after the caps kicked in, the lucrative rehabilitation industry was fighting for its life:

* Stroke, Parkinson’s and Alzheimer’s patients--among others needing speech, physical or occupational therapy--were cut off, unable to continue treatment after Medicare stopped reimbursing for their care.

* Therapy divisions of larger companies were closed, consolidated or downsized, their profitability devastated by the caps and separate but significant limits on reimbursements to nursing homes.

* Thousands of speech and physical therapists, who just five years earlier enjoyed some of the brightest career prospects in health care, were laid off. Many left the business, convinced that Washington’s budget-tightening mood had doomed their trade.

Hearing an enormous outcry from the therapy industry, Congress put a two-year moratorium on the caps, effective Jan. 1. But therapists still fear the limits could return once the moratoriums expire in 2002.

As health care goes, $1,500 isn’t a lot of money.

For either speech, physical or occupational therapy, practicing therapists estimate $1,500 would last roughly three to five weeks, with about three sessions a week.

A recent Department of Health and Human Services report found that between 29% and 38% of Medicare beneficiaries diagnosed with a stroke would have reached the $1,500 cap in 1998.