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Founder Letter: CMS Threw Down the Gauntlet: Are We Ready to Fight the 9% Medicare Cut?

CMS Threw Down the Gauntlet: It's time to fight the 9% cut to PT and OT Medicare payments.

Heidi Jannenga
5 min read
September 3, 2020
image representing founder letter: cms threw down the gauntlet: are we ready to fight the 9% medicare cut?
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CMS has thrown down the gauntlet for PTs and OTs. It yet again challenged us, clear as day, to fight for our Medicare payments and prove our worth as healthcare providers. Sure, CMS isn’t looking for a literal round of fisticuffs—but its planned payment reduction will inflict harm just the same. Adding insult to injury: CMS’s justification for slicing and dicing Medicare payments for rehab therapy services is to increase reimbursements for other specialties.

I don’t know about you, but that has me fighting mad. 

What is happening?

Every year, CMS updates the Medicare program via changes to the physician fee schedule. Typically, these changes aim to reduce administrative burden, improve efficiency and care quality, and lower the cost of care. But, there’s a catch: CMS is bound by a law that requires its annual changes to be totally budget neutral. So, if CMS wants to give one specialty higher payments, then it must subtract that increase from another part of the budget.

What does that mean for PTs and OTs? Well, in 2019, CMS proposed a significant payment increase to evaluation and management (E/M) CPT codes (which are most often billed by primary care providers). But the funds for that payment increase had to come from somewhere, so CMS also proposed slashing payments for dozens of specialty providers—including PTs and OTs.  

CMS is cutting outpatient PT and OT Medicare payments by 9% beginning January 1, 2021. 

Yep—you read that header correctly. In order to fund E/M payment increases for primary care providers, CMS is cutting payments for Part B physical and occupational therapy services by a whopping 9%. And to be clear, this is not a proposal. This change has already been finalized, and the reduction will kick in January 1, 2021—despite an onslaught of industry advocacy from organizations like the APTA, AOTA, APTQI, and WebPT.

Why does it matter? 

Let’s put the 9% cut into context. According to WebPT’s data, 25.7% of outpatient rehab therapy patients are Medicare beneficiaries. That means these 9% cuts will affect, on average, a quarter of a clinic’s income. You might be asking yourself, “What about the clinics that don’t treat Medicare patients?” Well, these cuts stand to affect those clinics, too. 

These cuts could ripple through commercial payer policy. 

CMS paves the way for healthcare policy, and its rules often set the stage for payers throughout the entire industry (NCCI edits, MPPR, and functional limitation reporting are some commonly cited examples). That is to say, commercial payers don’t necessarily have to copy CMS’s policies, but many opt to do so. Furthermore, many payers use the Medicare fee schedule as the baseline for their own payment structures—and we can’t forget the Medicare Advantage or other replacement plans that will be directly affected by these changes. And while I can’t guarantee that commercial payers will adopt this PT and OT payment cut, it definitely sends the wrong message to payers about our services. It implies that the care we provide isn’t as valuable or important as our physician peers’. And once that assumption is set, it will be that much harder for us to stand our ground with insurance companies—and that much easier for them to justify paying us less. 

The rehab therapy industry has not yet recovered from the financial strain of COVID-19.  

A financially strong therapy organization in a booming economy might be able to find creative ways to mitigate a 9% Medicare cut. But that’s not the scenario we’re looking at. The economy is standing on shaky ground. Unemployment is still at nearly triple the rate it was before the pandemic. And as of July, on average, rehab therapy patient volumes were still down 27.6% compared to pre-COVID levels. The point I’m trying to make is that we’re still recovering. Clinics aren’t operating at full capacity; therapists are still furloughed; and any additional financial strain (like a 9% Medicare cut) could severely hamper our industry’s ability to rebuild.

Feeling the squeeze from reimbursement cuts? Let WebPT help you maximize your billing and get every dollar you deserve.

How can I fight this?

Remember how I said that CMS is bound by a budget neutrality law? Well, because the E/M payment changes are definitely going into effect, its hands are tied. CMS legally cannot increase payments to therapy providers—no matter what. But, hope is not lost! Our federal congressional leaders—our US Representatives and Senators—can temporarily suspend (or completely remove) CMS’s budget neutrality requirement. This would give CMS the ability to cancel the 9% cut without backpedaling on the E/M reimbursement hikes. 

Reach out to your federal representatives. 

Federal government representatives are busy people. They’re constantly pulled in a million directions at any given time—and that’s especially true during an election year. If we want to grab their attention and convince them that we are worthy of their time, then we have to be loud—exceptionally loud. We must coordinate our outreach efforts and force our government leaders to hear us, listen to our concerns, and take action. 

The good news is that several industry organizations have put together materials to make advocating easy. And when I say easy, I mean really easy. If you have 15 minutes, then you have time to advocate. Check out some of the advocacy tools and materials that are available to you: 

Rally your patients

To make our voices as loud as possible, we need to send a huge volume of calls, letters, and social media messages directly to legislators. Congressional members are supposed to represent their constituents, so when they hear stories of how this 9% cut will negatively affect their constituents’ everyday quality of life, they should be spurred to action. So, get your patients involved! Put information in your newsletters, post signs in your clinic, and don’t be shy about directly sharing what’s happening and how patients can help. Patients can even use pre-made, patient-specific letter templates that make it beyond easy for them to participate in this movement. It’s important for legislators to hear providers talk about how the cuts will affect their Medicare patients—but hearing directly from patients is even more impactful.

Rally your professional and personal social circles.

After you, your team, and your patients reach out to your federal representatives, it’s time to take your advocacy efforts one step further. Amplify the cause through social media. Reach out to and rally your professional and personal social circles—and remember that therapists aren’t the only people who will be affected by these cuts. Practice managers, billers, front office staff, techs, assistants, and all of their families stand to suffer if clinics cannot keep their doors open. Use social media channels to nudge your friends and family into action. Post about the cuts, explain what they are and why they’re bad, provide links, and ask people to take action. 


To help spread the word on social media, WebPT has actually created a new hashtag trend: the #9for9Challenge. For this challenge, we want rehab therapists to: 

  1. Post a picture and caption that represent how the 9% cuts will affect them, their patients, and their businesses. 
  2. Tag the post with #9for9Challenge. 
  3. Tag nine people to do the same. 

Through this hashtag, we hope to increase visibility around the 9% cuts and the overwhelming need for immediate advocacy. 

CMS threw down the gauntlet. Now, it’s on us to scoop it up and defend our payments. We can do this, rehab therapists. We can take back control of our destiny. Time is of the essence and we must act now. So, what do you say? Are you ready to fight? 


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