On December 1, 2020, the Centers for Medicare & Medicaid Services (CMS) released the "Final Policy, Payment and Quality Provision Changes to the Medicare Physician Fee Schedule for Calendar Year 2021". You can read the press release here. It is as bad as we had feared with the final release including the 9% fee cut to PT/OT/SLP therapy services which will be the largest cut to our reimbursement in recent history.

The underlying reason for the cuts to reimbursement is that CMS has to maintain budget neutrality. This means that if reimbursement rates are raised in one area, they must be lowered for another. CMS has raised the allowable amounts for Evaluation & Management Services which, in turn, necessitated a lower reimbursement for other services. Therapy interventions are a part of this lowered reimbursement amount but it also affects other professions. At this point in time, the only way this will change is if Congress intervenes and supports H.R. 8702 (Holding Providers Harmless from Medicare Cuts During COVID-19 Act of 2020) which is a bill that will temporarily increase Medicare payments next year. If you have not yet shown your support for this bill, please stop reading this very minute to #FightTheCut and show your support.

PT | OT | SLP Evaluation Codes

What was intended to be a (small) win for therapists was the increase in reimbursement for therapy evaluations. CMS has stated that PT, OT and SLP Evaluations " inherently include work associated with assessment and work associated with management, similar to the work included in the office/outpatient E/M visits, which involve time spent face-to-face assessing and treating the patient.”. PTs and OTs have three different evaluation codes (Low, Moderate & High Complexity) with associated criteria based on co-morbidities, number of body structures and functions evaluated, stability of the condition, complexity of the decision making process and time spent.

It would make sense to assume that the higher the complexity of the evaluation, the more time is spent and the higher the reimbursement. Except... that's not true.

Remember, the Medicare Fee Schedule is the sum of the work value X conversion rate, the practice expense X conversion factor, and the malpractice expense X conversion factor (For a quick explantation of what all this means, check out another blog post here). If any one of those variables changes, the allowable amount also changes. For PT Evaluation Codes only, the practice expense is lower for higher complexity evaluations, which means that the reimbursement is less.

Nope, it doesn't make sense to us either.

Find Answers

If you want to understand the impact of the 2021 Fee Schedule on your practice, you can purchase the Medicare Fee Schedule & MPPRS Calculator & Budget Tool. This downloadable Excel Calculator will:

  • Calculate your Fee Schedule based on your locality using the proposed fee schedule (not estimates);

  • Calculate your typical per visit projected revenue based on your average units and commonly used procedure codes allowing you to create "what if" scenarios;

  • Make revenue projections based on average number of visits that you perform weekly, monthly and annually;

  • And.. If you have details of how many procedures were billed during a year as the first or subsequent units, you will have a powerful budgeting tool to calculate even more specific projections.

It's awesome and worth every penny. Check out the video that shows the calculator in action and you can buy it here.

We don't make the rules, but we can make them easier to understand. Connect with us and learn how we help Independent Therapists succeed at the business of rehab.

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