Profit is expected to rise, driven by the expansion in many states of coverage for industry services.
New York, NY (PRWEB) February 19, 2015
Healthcare reform has benefited the Occupational Therapists industry in the past five years by requiring Medicare and Medicaid to cover preventive services, which may include occupational therapy (OT). Overall, Medicare and Medicaid cover OT for beneficiaries, so long as industry services are required to prevent, diagnose or treat an injury, condition or illness. States that have expanded Medicaid eligibility have been required to cover OT as an essential health benefit (EHB). According to IBISWorld Industry Analyst Sarah Turk, “Occupational therapists have been able to provide rehabilitative services, even if private health insurers did not cover this service in previous years, effectively expanding the industry's scope of care.” However, in 2015, Medicare's coverage of occupational therapy is capped at $1,940, constraining the industry's revenue growth.
In 2012, many states adopted EHB benchmark plans, with each state choosing its own model for services covered by small group and individual health insurance plans. Thanks to autism reform legislation, 40 states now require health insurers to cover OT for patients with autism, providing a boon to the industry. During the five years to 2015, industry revenue is expected to grow moderately, partly due to the Protecting Access to Medicare Act of 2014. This law, effective through March 31, 2015, has extended the exemption process for Medicare beneficiaries that have exceeded their outpatient therapy cap. “Profit is expected to rise, driven by the expansion in many states of coverage for industry services,” says Turk. “However, therapy caps and malpractice claims have still pressured industry profitability.”
During the five years to 2020, industry revenue is forecast to grow more quickly. The burgeoning elderly population will bolster demand for industry services, namely OT for individuals with Alzheimer's disease and arthritis as well as stroke patients. As healthcare insurance providers seek to cut costs, many will provide favorable reimbursements for noninvasive outpatient treatment options, including OT.
For more information, visit IBISWorld’s Occupational Therapists in the US industry report page.
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IBISWorld industry Report Key Topics
This industry includes independent health practitioners who help individuals with physical, mental or developmental conditions with daily living and working through everyday activities (occupations). More specifically, occupational therapy includes: helping children with disabilities to participate fully in school and social situations; helping individuals recovering from injury to regain skills; and providing support for individuals experiencing physical and cognitive changes.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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