‘‘(D) REFERENCE
TO
EXEMPTION
FROM 
THERAPY CAP.—For provision to exempt each 
exempt provider from the provisions of 1833(g), 
see paragraph (6) of such section. 
‘‘(5) REPORT TO CONGRESS.—Not later than 
July 1, 2009, the Secretary shall submit to Congress 
a report on— 
‘‘(A) the interim results of the program es-
tablished under paragraph (4)(A), including a 
description of— 
‘‘(i) the completeness of the aggregate 
information collected under paragraph 
(4)(C)(i); and 
‘‘(ii) 
the 
common 
characteristics 
among covered providers that submit infor-
mation under paragraph (4)(C)(ii); and 
‘‘(B) plans to implement the value-based 
purchasing program under subsection (o), in-
cluding a description of— 
‘‘(i) any recommendations, with re-
spect to the implementation of the value- 
based purchasing program under sub-
section (o), based on the results described 
in subparagraph (A); and 
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‘‘(ii) methods and a timetable for such 
implementation. 
‘‘(6) CONSTRUCTION.—Unless Congress acts to 
prohibit the implementation of the value-based pur-
chasing program under paragraph (1), the Secretary 
shall implement such program no later than the date 
described in such paragraph. 
‘‘(7) BUDGET
NEUTRALITY.—The Secretary 
shall ensure that in no case shall the aggregate 
amount of Medicare expenditures increase as a re-
sult of the implementation of the value-based pur-
chasing program established under paragraph (1) 
and the transitional program under paragraph (4).’’. 
(b) CONFORMING AMENDMENT TO PAYMENTS FOR 
OUTPATIENT THERAPY SERVICES AND FOR OUTPATIENT 
REHABILITATION SERVICES.—Section 1834(k)(1)(B) of 
the Social Security Act (42 U.S.C. 1395m(k)(1)(B)) is 
amended by inserting ‘‘subject to subsection (o),’’ after 
‘‘subsequent year,’’. 
SEC. 3. TREATMENT OF MEDICARE THERAPY CAP. 
(a) EXCEPTION FOR EXEMPT PROVIDERS DURING 
2007, 2008, AND 2009 AND REPLACEMENT OF THERAPY 
CAP WITH VALUE-BASED PURCHASING PROGRAM
IN 
2010.—Section 1833(g) of the Social Security Act (42 
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U.S.C. 1395l(g)), as amended by section 5107 of the Def-
icit Reduction Act of 2005, is further amended— 
(1) in each of paragraphs (1) and (3), by strik-
ing ‘‘paragraphs (4) and (5)’’ and inserting ‘‘para-
graphs (4), (5), (6), and (7)’’; and 
(2) by adding at the end the following new 
paragraphs: 
‘‘(6) Subject to paragraph (7), paragraphs (1) and 
(3) shall not apply to expenses incurred with respect to 
such services furnished during the period described in sub-
paragraph (B) of section 1834(o)(4) if such services are 
furnished by a covered provider during a period in which 
such provider is identified as an exempt provider under 
subparagraph (C) of such section. 
‘‘(7) This subsection shall cease to have effect on the 
date the Secretary implements the value-based purchasing 
program under section 1834(o)(1).’’. 
(b) EXPANSION OF SERVICES COVERED BY THERAPY 
CAP AFTER IMPLEMENTATION OF EXEMPT PROVIDERS 
PROGRAM AND BEFORE IMPLEMENTATION OF VALUE- 
BASED PURCHASING PROGRAM.—Section 1833(g) of such 
Act, as amended by subsection (a), is further amended— 
(1) in paragraph (1), by striking ‘‘, in the case 
of physical therapy services’’ and all that follows 
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through ‘‘subsections (a) and (b).’’ and inserting a 
dash and the following: 
‘‘(A) in the case of physical therapy serv-
ices (including outpatient speech-language pa-
thology services) of the type described in section 
1861(p), 
but 
not 
described 
in 
section 
1833(a)(8)(B), and physical therapy services of 
such type which are furnished by a physician or 
as incident to physicians’ services, with respect 
to expenses incurred before the date on which 
the program under section 1834(o)(4)(A) is im-
plemented, and 
‘‘(B) in the case of physical therapy serv-
ices (including outpatient speech-language pa-
thology services) of the type described in section 
1861(p) and physical therapy services of such 
type which are furnished by a physician or as 
incident to physicians’ services, with respect to 
expenses incurred within the period described in 
section 1834(o)(4)(B), 
no more than the amount specified in paragraph (2) 
for the year shall be considered as incurred expenses 
for purposes of subsections (a) and (b).’’; and 
(2) in paragraph (3), by striking ‘‘, in the case 
of occupational therapy services’’ and all that follows 
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through ‘‘subsections (a) and (b).’’ and inserting a 
dash and the following: 
‘‘(A) in the case of occupational therapy 
services (of the type that are described in sec-
tion 1861(p) (but not described in section 
1833(a)(8)(B)) through the operation of section 
1861(g) and of such type which are furnished 
by a physician or as incident to physicians’ 
services), with respect to expenses incurred be-
fore the date on which the program under sec-
tion 1834(o)(4)(A) is implemented, and 
‘‘(B) in the case of occupational therapy 
services of the type that are described in section 
1861(p) through the operation of section 
1861(g) and of such type which are furnished 
by a physician or as incident to physicians’ 
services, with respect to expenses incurred with-
in 
the 
period 
described 
in 
section 
1834(o)(4)(B), 
no more than the amount specified in paragraph (2) 
for the year shall be considered as incurred expenses 
for purposes of subsections (a) and (b).’’. 
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