The Balanced Budget Act of 1997 affected PT services how?

• A. Increased Medicare reimbursements for PT
• B. Imposed a $1,500 cap on PT and SLP services
• C. Created the APTA
• D. Eliminated state licensing for PT

Answer: (B)

The main idea here is how a policy change limited Medicare-funded outpatient therapy. The Balanced Budget Act of 1997 introduced a yearly cap on outpatient therapy benefits, specifically setting a $1,500 limit for physical therapy and speech-language pathology services combined. This was a cost-containment move, so it reduced the amount Medicare would reimburse for ongoing PT and SLP in a single year. It did not increase reimbursements, it did not create the APTA, and it did not eliminate state licensing for physical therapy. In practice, therapists could pursue exceptions for medical necessity to continue services beyond the cap, but the cap itself was the defining change.