Earlier this week, the US Centers for Medicare and Medicaid Services (CMS) released its 2019 physician fee schedule proposed rule. Among other possible changes, the proposal includes a measure to end functional limitation reporting (FLR) requirements for claims with dates of service on or after January 1, 2019.

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The proposed rule aims to reduce regulatory burden.

This measure aligns with the proposed rule’s overall theme of reducing the administrative burden associated with documentation and reporting requirements as well as improving care efficiency (by expanding the use of telemedicine, for example). As CMS Administrator Seema Verma said in this announcement, the changes included in the 2019 proposed rule “deliver on the pledge to put patients over paperwork by enabling doctors to spend more time with their patients. Physicians tell us they continue to struggle with excessive regulatory requirements and unnecessary paperwork that steal time from patient care.”

For many PTs, OTs, and SLPs, functional limitation reporting is one such requirement. Since 2013, eligible therapy providers have been required to conduct periodic reporting on qualified Medicare patients’ functional progress using a specific set of G-codes and severity modifiers. As we explain here, CMS introduced the FLR mandate in an effort to “better understand the Medicare population, analyze the effectiveness of the therapy treatment those patients receive, and develop intelligent payment structures for therapy services.”

FLR has not produced useful data.

But according to the proposed rule—which is available in full here—the FLR program has fallen short of those objectives, noting that the agency “reviewed and analyzed the [FLR] data internally but did not find them particularly useful in considering how to reform payment for therapy services as an alternative to the therapy caps.” The authors of the proposed rule also discussed—and admitted to agreeing with—feedback they received from the healthcare community regarding FLR, namely that it “is overly complex and burdensome to report” and that “the utility of the collected data” was questionable “given the lack of standardized measures used to report the severity of the functional limitation being reported.”

Ultimately, CMS “concluded that continuing to collect more years of these functional reporting data, whether through the same or a reduced format, will not yield additional information that would be useful to inform future analyses, and that allowing the current functional reporting requirements to remain in place could result in unnecessary burden for providers of therapy services without providing further benefit to the Medicare program in the form of additional data.”

If accepted, the proposal would end FLR beginning in 2019.

If accepted as part of the final rule—which CMS plans to publish in late fall 2018—the FLR program and associated G-codes will be nothing more than a memory come January 2019.

Here’s a quick rundown of other proposed rule items of interest to PTs, OTs, and SLPs:

New Modifiers for Services Provided by PTAs and OTAs

These new modifiers would allow CMS to identify “services furnished in whole or in part by a physical therapist assistant (PTA) or an occupational therapist assistant (OTA).” This proposal stems from a previous rule (the Bipartisan Budget Act of 2018) enacting a payment reduction for assistant-provided services beginning in 2022. If accepted, this change would require therapy providers to begin using the new modifiers in 2020. It would also change the current definitions of the GO, GP, and GN modifiers to ensure they no longer applied to services delivered by assistants. To learn more about the payment reduction, check out this blog post.

PT, OT, and SLP Inclusion in MIPS

The rule includes a proposal to add “physical therapists, occupational therapists,” and “qualified speech-language pathologists” to the list of MIPS-eligible providers beginning in the 2021 payment year (i.e., the 2019 reporting year). The addition of these providers is contingent upon the final measure list, as there would need to be a sufficient number of measures available to each specialty. Additionally, to help ease the burden of transitioning into the MIPS program, the rule indicates that these additional clinicians would have a “ramp-up” period similar to that afforded to previously eligible participants.

Continued Use of KX Modifier

The proposed rule does not include any changes to the current process for submitting claims exceeding the $2,010 threshold for OT services and PT and SLP services combined. Additionally, the rule reiterates that for claims exceeding the secondary $3,000 targeted medical review (MR) thresholds, “not all...are subject to review as they once were.” In other words, as we explain here, “CMS will not subject claims over the $3,000 threshold to the targeted medical review process unless the provider falls into a small percentage of therapists who meet certain criteria (e.g., the provider has a high claims denial rate or demonstrates aberrant billing practices compared to peers).”


Bear in mind that none of these changes are final. In fact, CMS is collecting commentary on this proposed rule until September 10, 2018, at which point it will begin drafting the final rule, which is set to be released in late 2018. To learn more, check out this CMS page. We’ll continue to provide updates as this process progresses.

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