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Founder Letter: Is the 8% Payment Cut the Wake-Up Call Rehab Therapists Need?

PT and OT services receive a Medicare Payment Cut in 2022 (again) and now, more than ever, is the time for action and advocacy.

Heidi Jannenga
5 min read
November 7, 2019
image representing founder letter: is the 8% payment cut the wake-up call rehab therapists need?
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Last week, CMS issued its annual final rule, which finalized the proposed 8% cut to outpatient Medicare payments for physical therapy and occupational therapy services. It’s officially official: not only will clinics have to contend with the therapy assistant reimbursement reductions in 2022, but they’ll also have to absorb an 8% across-the-board hit to their Medicare revenue starting in January 2021. It’s a pretty heavy blow to the industry, and I feel like I can see everyone reeling a little bit and hear a few f-bombs from the news. So, what comes next?  

First, I want to make clear that I do not believe this cut is our death knell—at least, not yet. The good news is that rehab therapy is still alive and kicking, and I know that rehab therapists are in a good position to step into a prominent role in the healthcare sphere. The not-so-good news? We have a lot of work to do—and we can’t keep doing the same things that we’ve done in the past. 

CMS has a long history of reducing rehab therapy expenditures. 

In a way, these cuts almost feel like old hat. It’s not the first time CMS has decided to balance its budget by siphoning funds out of rehab therapy or implementing burdensome programs—and I wager that it won’t be the last. Just take a look at the regulatory requirements that have made their way down the pipeline over the last decade or so. Most of the recent legislation affecting rehab therapists has been onerous—not to mention financially taxing—for everyone in our profession. 

Timeline of Regulatory Burden in Rehab

1997: The Therapy Cap

The therapy cap is the seasoned alumnus of these regulatory programs (the modern version of the cap was enacted in 1997), but it stole the spotlight again in 2018 when the Senate voted to repeal the hard cap in favor of a soft threshold. Therapists celebrated the demise of the hard cap on services—but it opened the door for other cuts so CMS could balance an influx of therapy expenses. 

2006: PQRS

In 2006, CMS introduced PQRS, a now-defunct program that was originally meant to improve quality of care. For a long time, I strongly believed that therapists should use this program to demonstrate the value of rehabilitative therapy to CMS—but after some time and a little bit of reflection, I realized that PQRS was not functionally capable of doing this, because a large majority of its reportable rehab therapy measures did not speak to the skill of our profession. Basically, it was a whole lotta work for minimal payoff. 

2011: MPPR

In 2011, CMS rolled out some steep payment cuts under the multiple procedure payment reduction (MPPR) program, which is still in effect today. Under MPPR, rehab therapists who bill more than one “always therapy service” during the same visit are subject to an estimated reimbursement reduction of 6% to 7%. 

2013: FLR

In 2013, CMS began requiring rehab therapists to participate in another now-defunct quality-based reporting program known as functional limitation reporting (FLR). It required all sorts of burdensome code and modifier reporting, and noncompliant therapists had their claims denied outright

2020: 8% Reimbursement Cut

This is the biggest and most detrimental cut to rehab therapy that we’ve seen in a long, long time—and it came to pass partly because another organization lobbied CMS for improved reimbursement rates on troublesome E/M codes. The problem, as I said before, is that every budgetary increase comes at a price—and in this case, it’s one that rehab therapists had to pay

However, although this reduction may seem random, there is actually a lot of data in play when CMS makes these kinds of decisions—and we have to take responsibility for our own actions. When the OIG reviewed 300 randomly selected Medicare claims for outpatient physical therapy services, 61% of those claims did not meet Medicare’s standards for medical necessity, coding, or documentation—resulting in $367 million in overpayments. That’s a lot of money that the government is trying to recoup.

2022: PTA and OTA Reimbursement Reductions

CMS floated the idea of these reimbursement reductions at the same time it repealed the therapy cap, but the cuts didn’t receive much attention until after the release of the 2020 proposed rule. I’ve spoken openly about how clinic workflow changes can help offset these payment reductions (and it’s worth noting that the APTA’s and PT-PAC’s lobbying efforts successfully helped define and minimize the payment differential), but they are still, nevertheless, another therapy-specific reduction in a long line of cuts at the hands of CMS.

Reimbursement reductions and burdensome, ineffective programs endanger our patients and our profession. 

I’m all about resiliency and learning to roll with the punches (you have to expect some setbacks when you’re dealing with the federal government), but CMS’s trend toward reducing rehab therapy payments is extremely concerning—especially when commercial payers often mirror CMS’s decisions. A plethora of emerging medical guidance encourages providers to route patients to safer, less invasive treatment paths. This best practice has received even more attention in the wake of the ongoing opioid crisis. And yet, CMS continues to introduce payment structures and regulatory programs that penalize the very providers who deliver that type of conservative treatment. How are we supposed to make rehab therapy more accessible to these patients when it’s becoming harder and harder to even stay in business?

APTA President Sharon Dunn, PT, PhD, put it best: “The 8% cuts to PTs in the face of mounting evidence for our roles in healthy aging, fall prevention, and stark reduction in opioid exposure and overall costs is inexplicable and irresponsible. Our US citizens & publicly supported health system deserves better.”

If CMS truly believes in the unique value rehab therapists provide, why would it pay them less? I just can’t wrap my head around that logic. I would even argue that CMS is essentially incentivizing the delivery of non-conservative care—because apparently, that’s what it’s willing to pay for. So, is it really that surprising that 90% of the patients who could benefit from seeing a rehab therapist never do?

These will likely not be the last cuts to Medicare payments for physical therapy and occupational therapy.

As much as I hate to say it, I highly doubt that these will be the last cuts we see. CMS functions a little bit like a business: it has to stay budget-neutral and ensure that its expenditures don’t exceed its allotted budget. What that ultimately means is that almost every win for the therapy industry—whether it’s an improved reimbursement rate or improved access to care—will come at a cost. Literally. 

Many rehab therapy thought leaders and advocates (myself included) have high hopes for the profession. We want to be at the forefront of the movement toward preventive, conservative care—and we want to be paid fairly for the skills, expertise, and value we provide. The unfortunate reality is that we’re not there yet. Right now, CMS still classifies rehab therapy as a “service” and does not categorize rehab therapists as “providers.” (Fun, but sad, fact: That’s why we can’t opt out of Medicare the way other providers can.) Because we don’t have the same clout as physicians or other medical providers, we have to stay vigilant and be loud when CMS tries to sabotage our hard-earned wins with seemingly arbitrary reductions.

But it’s not enough for therapists to lobby CMS; we did that to the tune of more than 10,000 comments that protested the 8% cuts—to no avail. Moving forward, we have to take matters into our own hands and go straight to the consumer, our patients, in order to hold the agency accountable for its actions (more on that below). 

We must do better—we can’t afford to let this happen again. 

I still believe we got ferociously sidetracked by the PTA and OTA reductions—though we did see some favorable outcomes from those advocacy efforts. Reimbursement cuts are never ideal, but that particular reduction should be relatively manageable, and it puts us in line with the assistant standards in other healthcare disciplines. (For example, PAs and NPs also have an 85% reimbursement rate in their respective disciplines.) Fighting that assistant reduction was nowhere near as crucial as fighting this industry-wide cut—yet here we are. Hopefully, this sweeping 8% cut has finally captured everyone’s attention. 

Luckily, there is still a sliver of hope; CMS has stated that this plan is “subject to change.” Furthermore, we don’t yet know which CPT codes will be impacted by the cut. Still, this is an issue that spans our entire profession—from small practices to enterprise organizations—and it affects more than just Medicare patients. It sets a precedent for the future and sends the wrong message to the rest of the healthcare community. Every therapist has some skin in the game, because these regulatory changes limit access to care and heighten the barrier of entry for musculoskeletal pain patients. Ultimately, these cuts incentivize the wrong clinical pathways and encourage referral patterns that include pain medicine—and even opioids.

The time for advocacy is now. 

It’s time for us to set some serious boundaries with CMS. To do that, we must unite and come to a consensus on our advocacy strategy for this year. I would even argue that we should be planning for the next decade. We must pinpoint the issues that truly deserve our attention and action—like sweeping payment cuts, access to telehealth, and MIPS participation—that will affect the future of our profession.. 

This is yet another wake-up call to set our priorities, take a stand, and make a ruckus. No more snooze button! These cuts—however they end up being applied—are unacceptable. They completely undermine the value of rehab therapy, and we should be fighting mad about it. 

How to Take Action 

I know the thought of becoming an industry advocate can be daunting—especially if you don’t know where to start. Well, I’m a little bit of an advocacy aficionado, so I can give you a few ideas on where to start. 

Therapist-Led Advocacy

Federal Involvement

One of the easiest ways to get involved is to support an established advocacy organization by donating funds or volunteering your time. The APTA does some great work—like with the PPS Key Contact program, where PTs are paired with local congressional representatives to provide insight on how upcoming healthcare legislation will affect the PT industry. You can also come to the Federal Advocacy Forum in Washington, DC from March 29–31, 2020. It’s a great place to learn about the latest issues that plague our industry as well as how to advocate as a rehab therapy professional.

Industry Associations

It’s also important to understand that none of the intensive hand-to-hand, day-to-day legislative combat could be done without the PT-PAC—an organization that lobbies congressional representatives for the benefit of PTs. So, I encourage all of you to contribute what you can to this group. And, if you aren’t already, you should become an APTA member. I believe this is an obligation for every PT, because there truly is strength in numbers

Data Collection

You, as an individual, can also advocate for our profession by collecting outcomes data and sharing it with other payers and providers—or by becoming a healthcare thought leader and speaking at healthcare conferences or contributing articles to physician-, patient-, or consumer-focused publications. 


We must also commit to improving our understanding of compliance rules—and ensuring that we always adhere to the golden standards for clinical practice, documentation, and coding. After all, $400 million in overpayments would be enough to spur any business to focus its attention on offsetting that unnecessary expenditure. And when we do flex our advocacy muscle, we must be able to back up our position with data—and we must be willing to make concessions when we negotiate. 

Patient-Led Advocacy

Ultimately, the best advocates that we can possibly get in our corner are our patients. They are the people who know exactly what the stakes are when Medicare denies them care that could help them significantly improve or maintain their quality of life. They know exactly what they’re missing out on—and they are perfectly positioned to launch a grass-roots-style advocacy program without appearing self-interested. 

But, more importantly, we need patients to capture the eyes and ears of the people who have the power to make legislative waves. “We are going to need Congressional help on this one,” said Dunn. “CMS cuts the very care that keeps seniors mobile and functional at home!”

All of that is easier said than done, of course, which is exactly why we decided to make it as easy as physically possible for you to mobilize your patients and empower them to advocate on our behalf. In fact, we have written a complete letter—download it below!—that patients can sign and mail to CMS and/or their state government representatives. So, the next time a patient has to sign an ABN, or runs out of visits for the year, or comes upon any other barrier that compromises his or her ability to access your care, sit down and have a serious conversation about why these sorts of rules and regulations should never prevent patients from obtaining the care they need to maintain their health and wellbeing—and live their lives to the fullest. Then, provide the patient with the prewritten letter available below and ask him or her to send it to his or her local representative as well as the administrator of CMS, Seema Verma. 


If you find patients who are deeply invested in advocating for their therapy benefits, you could also encourage them to get involved with a nonprofit advocacy group like the Center for Medicare Advocacy or The Medicare Rights Center. Additionally, they can always submit complaints about their coverage directly on Medicare’s website via this form

If we want to be paid fairly and get the recognition we deserve as musculoskeletal experts, it will be hard. It will be an uphill battle. But, I believe we can do it—as long as we accept this payment cut for what it was: a wake-up call. It’s time to unite as a profession—as a community—like we never have before. I am sending out the rally cry. Are you ready?

Help your patients advocate for their health.

Enter your email below, and we’ll send you copies of prewritten advocacy letters—and a congressional directory—that you can provide to your patients.


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