Chuck FelderToday’s blog post comes from Chuck Felder, PT, DPT, SCS, MBA. For follow-up questions, please email Chuck at CFelder@HCSconsulting.com.

1.)    What?

In 2012, CMS began a process of reducing payment for therapy services based on multiple procedures performed during the same visit. This is termed the Multiple Procedure Payment Reduction (MPPR).  Despite APTA’s and others best efforts to get this removed, CMS began a 20% reduction policy on the second and subsequent procedure each day. This is in effect for all therapy services provided on a single day. So, if the patient received OT on the same day as PT, CMS would pay the highest value procedure at 100% and reduce all subsequent procedures that day by 20% of the practice expense component. Overall, the average visit with around 3.7 units would have  its payment reduced about 6%–7%.  For the first quarter of 2013, CMS continued the 20% reduction policy.  However, they’ve since switched to a 50% reduction. 

2.)    When?

The changes took effect April 1, 2013, so expect to see smaller checks from Medicare. The 50% reduction in the practice expense is significant because the practice expense typically accounts for about half of the total payment for each code. 

One can determine Medicare allowed amounts by multiplying the conversion factor times the geographic pricing cost index (GPCI), then times the relative value unit (RVU) for each of the three components of “Work,” “Practice Expense,” and “Malpractice Expense.”  See the chart below for an example: 

Locality:

03102 00 Arizona

Conversion Factor:

 $34.023

Code:

97110

 

Work

PE

MP

 

GPCI

1.000

0.978

1.015

 

RVU

0.45

0.48

0.01

Total

Calculated Amount

$15.31

$15.97

$0.35

$31.63

48.4% 

50.5% 

1.1%

 

3.)    How Much?

The reductions are larger than you may think. If you practice in Arizona and typically bill for four (4) units (for example, 97530, 97110, 97110, and 97140), the payment dropped $13.98 or 11.8% compared to what you received for services rendered the first quarter of 2013. However, current payment rates at the 50% MPPR level are a whopping $23.29 or 18.3% below the allowed amount (what we are supposed to get paid).

Compared to 2012 payment levels, this represents a decrease of $9.50 or 8.4%. So, this year you get paid less than you did last year for the same services. Did anyone’s labor cost or rent go down? (Please contact me if you would like to know the specifics for your Medicare locality.)

4.)    Now What?

That’s the question that we all face. Do we stop treating Medicare patients? Do we just accept it? Do we mobilize our Medicare patients to descend upon Washington? Do we change the way we treat? 

These are difficult questions to answer. In my discussions with practice owners around the country, I hear frustration and resignation. CMS is demanding more and more from us: PQRS, functional limitation reporting, onerous documentation standards, and post-treatment audits. Many are considering dropping Medicare patients. Most want to continue to treat this needy population, but are concerned about the fiscal and frustration implications.  

For arguments sake, let’s assume your practice is 100% Medicare and you are able to fill all treatment slots. From a purely financial standpoint you would be better off treating each Medicare patient for only one (1) unit, or 15 minutes, so that the MPPR does not take effect. This is probably not practical as our patients need more than 15 minutes and the compliance side would be just too much. Additionally, it would be inconvenient for the patient and would require many more visits to get a successful outcome. 

The next best financial option would be to perform 30 minutes, or two (2) units, of treatment coupled with some appropriate group activities allowing you to use the 97150 code. This would allow more time with the patient, some in a shared setting. In a 100% Medicare population, this could add nearly $300 in revenue during an eight-hour treatment day per licensee. 

In any case, in order to truly determine how this reduction affects your practice and what changes you’ll make, you must consider Medicare patient’s needs, the percentage of Medicare patients in your practice, staffing, and the culture of your practice.

Unwrapping MIPS and the Final Rule: How to Prepare for 2019 - Regular BannerUnwrapping MIPS and the Final Rule: How to Prepare for 2019 - Small Banner
  • Hot Out of the Oven: Highlights of the 2017 Final Rule for PTs, OTs, and SLPs Image

    articleNov 9, 2016 | 8 min. read

    Hot Out of the Oven: Highlights of the 2017 Final Rule for PTs, OTs, and SLPs

    Halloween may be over, but if you didn’t get your fill of scares, I’ve got the perfect activity for you: reading through 1,401 pages of pure Medicare gobbledygook. Screaming yet? (Or should I check back at around page 500?) I kid, of course; there’s no need for you to slog through this year’s extra meaty Final Rule —which details the Medicare fee schedule and other important Medicare regulatory and reimbursement changes for physical therapy, occupational therapy, and …

  • articleMay 30, 2013 | 6 min. read

    Managing MPPR: A Response to Chuck Felder’s Post from WebPT Co-Founder and PT Heidi Jannenga

    Thank you, Chuck, for presenting such detailed information on the Multiple Procedure Payment Reduction (MPPR) changes. My biggest takeaway from Chuck’s post is that, now more than ever, clinic owners must focus on practice management and truly pay attention to their business. Understanding the metrics of your practice is crucial in this age of declining reimbursements and frequent regulatory changes. There are three crucial metrics that I think come into play when assessing MPPR’s impact on your …

  • The PT’s Guide to Surviving a Medicare Audit Image

    articleMay 30, 2016 | 5 min. read

    The PT’s Guide to Surviving a Medicare Audit

    “How can I avoid being audited by Medicare?” This is one of the compliance questions I hear most frequently, and the honest answer is, quite simply, that you can’t. Just because CMS or one of its auditing entities hasn’t come knocking on your door doesn’t mean you’re not being audited. In fact, every claim you submit undergoes statistical analysis, and Medicare compares your claims data to the data for all other claims submitted. Furthermore, Medicare now analyzes …

  • articleNov 20, 2010 | 2 min. read

    Temporary Reprieve to some Final Rule Changes Passed by Senate but the Fight is NOT Over!

    Last night the Senate passed a bill  by unanimous vote called The Physician Payment and Therapy Relief Act of 2010 (PPTRA) that allows a 30 day reprieve from the Medicare Final Rule and continue the existing 2.2% Medicare payment update that expires November 30. The PPTRA also changes  the multiple payment procedure reduction (MPPR) finalized by the Centers for Medicare & Medicaid Services (CMS) this month, by applying a 20% reduction, rather than the 25% reduction in the …

  • How to Bill for PT Assistants Providing Physical Therapy Services Image

    articleJul 12, 2017 | 5 min. read

    How to Bill for PT Assistants Providing Physical Therapy Services

    This post comes from PT Compliance Group compliance officer Tom Ambury, PT, and WebPT President Heidi Jannenga, PT, DPT, ATC/L. We get a lot of questions when it comes to billing for private practice PT services. One of the most common has to do with billing for licensed PTAs—especially when Medicare and state practice acts have different requirements when it comes to supervision . Our advice? Adhere to the most stringent requirement, which usually comes from Medicare. …

  • Think You Know PQRS? [Quiz] Image

    articleDec 2, 2015 | 1 min. read

    Think You Know PQRS? [Quiz]

    PQRS 2016 is on the horizon, and whether you’re an old pro or a reporting rookie, the details of this Medicare quality data program can be tough to keep straight. And with a potential 2% negative payment adjustment on the line, it’s imperative that you understand every facet of this quality data reporting program from A to Z—er, P to S. Think you’ve got PQRS down pat? Prove your smarts with our ten-question quiz. Need a bit …

  • Founder Letter: My Evaluation of the New PT and OT Eval Codes Image

    articleNov 3, 2016 | 5 min. read

    Founder Letter: My Evaluation of the New PT and OT Eval Codes

    Over the last several years, healthcare providers in general—and rehab therapists, specifically—have been hit with a seemingly constant barrage of regulatory requirements. And the vast majority of these initiatives—PQRS, functional limitation reporting, MPPR, ICD-10, and the like—have either: Had a direct negative impact on our payments, or Forced us to devote extra time to satisfying the criteria of the requirements—with zero compensation for that time. So, it should come as no surprise that the rehab therapy community …

  • Common Questions from our G-Code Denials Webinar: Part 1 Image

    articleJul 29, 2014 | 6 min. read

    Common Questions from our G-Code Denials Webinar: Part 1

    Today’s blog post comes from WebPT writers Brooke Andrus and Erica Cohen. If a patient has more than one functional limitation associated with a single diagnosis, should I report G-codes and severity modifiers for all of them? No. Medicare will only accept functional limitation reporting (FLR) data for one primary functional limitation per case. Therefore, if the patient has multiple functional limitations associated with a single diagnosis, you'll need to determine which one represents the patient's primary …

  • The How and Why of an Effective Rehab Therapy Compliance Program Image

    articleAug 9, 2018 | 7 min. read

    The How and Why of an Effective Rehab Therapy Compliance Program

    It’s no secret that the US healthcare industry is heavily regulated—and those regulations are strictly enforced. Take this recent press release from the Department of Justice (DOJ), for example. It explains how the DOJ charged 601 individuals with fraud—the largest healthcare fraud takedown in history. Among them: 71 physicians charged with falsely billing Medicare, Medicaid, and TRICARE in cases involving the prescription and distribution of narcotics. And in New York, 13 individuals were charged with conspiracy for …

Achieve greatness in practice with the ultimate EMR for PTs, OTs, and SLPs.