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Some major changes are headed our way in terms of the 2011 Medicare Final Rule on the Physician Fee schedule and Other Policies to be effective January 1, 2011.  The Rule included a number of provisions that have impact on outpatient therapy services. The net effect of the policies could lead to payment reductions of approximately 30%.

If you see Medicare patients and they impact your revenue, there are several things to pay attention to and deal with proactively. These changes pose a significant threat to a growing population of baby boomers and their ability to access PT. Changes to these payment reductions can only be averted through Congressional action. APTA is notifying its members of opportunities to advocate on behalf of the profession to eliminate these payment cuts and any developments associated with the implementation of the Multiple Procedure Payment Reduction (MPPR).  Many believe that an extension of the therapy cap exceptions process and a reprieve for Medicare Fee Schedule cut will be considered and with some heavy lobbying are expected to be passed. Please stay alert to these changes and be pro-active in standing up for our profession and the value of the services that we provide.

Here is a brief summary of these provisions to provide a better understanding of the rulings. For a more comprehensive summary for APTA members, please see the 2011 APTA Fee Schedule Summary.

  • Multiple Procedure Payment Reduction (MPPR) for Therapy Services
  • Therapy Cap & Exeptions Process
  • Medicare Part B Benefit Deductible
  • Physician Quality Reporting Initiative (PQRI) expiration of the therapy cap exceptions process
  • Addition of the canalith repositioning code (95992) as a reimbursable service under Medicare
  • Implementation of numerous provisions under the Patient Protection and Affordable Care Act (PPACA).

Multiple Procedure Payment Reduction (MPPR) policy

CMS estimates the financial impact of the MPPR policy to be a 7 to 9% reduction in payments for therapy services in 2011. CMS asserts that this cut will be mitigated to a 3% reduction in 2013 due to the full transition to the use of the physician practice information survey (PPIS). This is an improvement from the 14-18% reduction in payment in 2011 that was outlined in the proposed rule.

The MPPR reduction is made by paying 100% of the practice expense for the code with the highest practice expense Relative Value Unit (RVU) and reduces the practice expense of the second code and all subsequent codes billed on that day by 25% (not the 50% originally proposed). This reduction will apply to all outpatient therapy services furnished in all settings. Basically, it is a cascading payment plan that will reduce your overall net per visit if you are not maximizing your billing AND if you are billing for multiple codes, specifically modalities. This is just another call for PTs to provide patients with the care they need using skillful practice with less fluff like modalities.

Therapy Cap & Exceptions Process

The Final Rule implements the annual therapy cap at $1870 ($10 increase from 2010) for 2011 with no exceptions process with use of the KX modifier (expires Dec. 31, 2010). The final rule also includes discussion of multiple options for therapy cap alternatives including (which CMS reports the most common are 1 and 3):

Additional submission of clinical information regarding the patient severity and complexity to determine need for medical review. A severity scale (none, mild, moderate, severe, complete) would be used with new related G-codes.Introduction of additional claims edits regarding medical necessity such as limiting the number of services per visit, services per episode, or per diagnosis.Adopt a per-session bundled payment that would vary based on patient characteristics and complexity of the treatment services provided.

Medicare Part B Benefit Deductible

In 2011, the Part B deductible will be $162. The co-insurance remains at 20% of Medicare allowable charges.

Canalith Procedure Reimbursement

Beginning in 2011, Medicare will recognize the CPT Code 95992- Standard Canalith repositioning procedure(s) (eg, Epley maneuver, Semont maneuver), as an individual active code. Therefore this service will be separately payable by Medicare when covered.

PQRI: Physician's Quality Reporting Initiative

The Affordable Care Act changes PQRI in many ways:

2011 incentive reduced from 2% to 1%Incentive payments reduced to .5% in 2012-2014Penalties for not participating start in 20158 Measures available for PTs via claims/registry based reporting2011 mandatory percentage of reporting reduced from 80% to 50%CMS will create by January 1, 2011 a "Physician Compare" website to show all providers, including PTs, who satisfactorily participated in PQRI and earned incentive payments.

Please see subsequent posts on this BLOG page for more detailed information on PQRI. WebPT is 1 or only 2 CMS certified registries in the PT industry and will keep you up to date with all the newest information available.

Other Provisions Affected

Telehealth Services Annual Wellness Visits and Prevention Plan Off the Shelf Orthotics Exemption NO limitations on Physician referrals for physical therapy services furnished by physician offices

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