When is a Raise Not a Raise? Examining the CMS Cuts to Medicare Therapy Reimbursement
Facing an average 9 percent cut in the 2021 Medicare Physician Fee Schedule Final Rule (CMS-1734-F), outpatient physical and occupational therapists, as well as speech-language pathologists, received a “raise” with some financial relief from Congress late last year.
The Consolidated Appropriations Act of 2021 (Pub. L. 116–260), which was passed by Congress on December 21, 2020 and signed by President Trump on December 27, 2020, kept the government open, provided for various forms of COVID-19 relief, and added $3 billion to the Physician Fee Schedule.
However, the reality is that payment is still being reduced in 2021 for most therapy codes in the vicinity of 3.2–3.6 percent. A raise that was not a raise.
Not a Raise, Really!
The $3 billion infusion by Congress strengthened the 2021 Medicare Physician Fee Schedule, and was further bolstered by a 3-year delay in the implementation of the E&M complexity add-on code which “returned” an additional $3 billion available in the Fee Schedule. But was it enough to stave off the projected cuts to therapy?
The 9 percent cuts laid out in the 2021 Fee Schedule (to obtain mandated budget neutrality), were calculated by lowering the 2020 conversion factor from $36.0986 to $32.4085 for 2021. The “super calculator” at CMS did some reverse engineering to arrive at the updated conversion factor of $34.8931, which resulted in the estimated reduction in the 3.2–3.6% range for PT, OT, and SLP.
The actual decrease from 2020 payment to 2021 payment will depend on practice patterns, code utilization, and Medicare localities. Therapy providers awaited the CMS posting of the updated 2021 conversion factor that would bring the “raise” for therapy into clear focus, which came to pass with little fanfare on January 5th. However, uncertainty continues as we enter the third week of 2021 while therapy treatment days tick away. Therapy practices face challenges to accurately determine the amount of therapy deductibles to collect as well as applicable co-payments (patient liability).
Pennies from Above?
The 2 percent sequestration deduction that was temporarily suspended for the PHE last year was slated to return this January, but has now been given a three-month hiatus as a result of the Consolidated Appropriations Act. Therapy providers will not have a 2 percent reduction on the 80 percent Medicare payment portion, saving a small amount through March.
Putting Together a 2021 Therapy Resource Toolkit
Outpatient therapy providers should gather a number of resources into a 2021 Therapy Resource Toolkit to keep the changes straight and mitigate confusion over the next few weeks. A ring binder or digital folder will do. Clarify for office staff, front desk staff, therapists, and billers what has changed, as well as what remains unchanged, in 2021.
Changes to Know for 2021
Medicare Deductible for 2021
Medicare Fee Schedule (keep checking for the lookup tool!)
2021 Annual Update of Per-Beneficiary Threshold Amounts
CMS 2021 Annual Update to the Therapy Code List
CCI Edits for Q1 2021
Students and Documentation (discussed in my previous article on the subject)
Refreshers for Best Practice in 2021
ABN Form and Instructions
11 Part B Billing Scenarios for PTs and OTs (individual vs. group treatment)
Medicare Benefits Policy Manual, Ch. 15, Sections 220 – 230
Medicare Benefits Policy Manual, Ch. 12 (CORFs)
Medicare Claims Processing Manual, Chapter 5
Groundhog Day Approaches
News of this “raise” from Congress brings more challenges than victories for PT, OT, and SLP providers. Remember the twenty-year “Stop the Therapy Cap Campaign”? It ended with the successful, and permanent, repeal of the therapy cap effective January 1st, 2018. Well, it’s Groundhog Day all over again as the therapy industry prepares to tackle a long-term solution to the Physician Fee Schedule. Sing along with me: “I got you, babe.”
