In an age of increased regulations and reduced fee schedules, turning a profit in the outpatient rehab therapy industry is tougher than ever. And for the past five years—going on six—it’s been particularly tough for those therapists who treat a lot of Medicare patients.
That’s because, under a policy called multiple procedure payment reduction (MPPR), CMS won't pay claims in full when a PT, OT, or SLP performs more than one related procedure on a patient during the same visit. Talk about a wake-up call to diversify your payer mix. So, while you can expect to continue seeing smaller checks from Medicare under MPPR, how can your clinic contend with this policy—and, more importantly, make the decrease in payment more manageable?
In 2011, CMS began rolling out MPPR—and, in the process, complicated the lives of PTs, OTs, and SLPs even more. Under the current form of this rule, rehab therapists who perform more than one “always therapy service” on a patient during the same visit see a 50% cut to the practice expense (PE) that he or she bills to Medicare. (According to CMS, a qualified therapist can only bill “always therapy” codes when the service is provided under the patient’s plan of care.) During the pioneer days of MPPR—January 1, 2011, to March 31, 2013—CMS implemented a 20% reduction on the PE for outpatient therapy providers; the agency then increased the cut to 50% on April 1, 2013. And no, that wasn’t an April Fool’s Day prank.
In addition to affecting reimbursement for multiple services provided by the same practitioner, MPPR extends across disciplines when two or more rehab therapists treat the same patient during the same date of service. To better put things into perspective, if a patient received OT on the same day as PT, CMS would pay the highest procedure value in full and would then reduce payment for all subsequent procedures performed that day by 50% of the PE component. Now, according to PT Chuck Felder, that’s no insignificant cut, because the PE typically accounts for about half of the total payment for each code. Plus, there’s this little tidbit: the APTA estimates that MPPR, on average, reduces provider reimbursement between 6% and 7% for outpatient therapy services (based on an average of 3.7 billed units per visit). Talk about a policy that’s difficult to stomach.
Cutting Unnecessary Costs
Part of the reason why CMS implemented its MPPR policy is because the agency grew tired of continuing to pay for pre- and post-service activities that fall under the practice expense. (While each therapy service includes three components—work expense, practice expense, and malpractice expense—the MPPR applies only to the PE payment). In particular, because the PE is attached to each therapy procedure, CMS believes it’s “overpaying for that prep time when more than one procedure is performed in a day for that patient.” More to the point: CMS designed its MPPR policy to avoid this type of duplicate payment. But, that doesn’t mean advocates within the rehab therapy industry are sitting quietly, doing nothing.
Contending with the Reductions
The APTA continues to assert that MPPR is a flawed policy, because the PE values that providers submit to Medicare have, over time, been reduced. Furthermore, the APTA contends that the time rehab therapists spend on pre- and post-service activities continue to be evenly distributed across three units of service (or 45 minutes of treatment time). Therefore, the APTA believes CMS’s decision to make continued cuts to the practice expense of therapy service codes is not only arbitrary, but also “likely to restrict patient access to vital physical therapy services.” And because several third-party insurance carriers have also adopted this CMS policy, the APTA suggests providers not put all their eggs in one basket. In other words, clinic owners should look to diversify their payer mixes and not rely on Medicare as a sole source of income.
Looking Forward to the Future
For the time being, rehab therapists will continue to lose 50% in PE payments for any additional “always therapy” services he or she provides to a Medicare patient during the same treatment session. Confused about how to calculate MPPR? The APTA has rolled out an updated version of its Medicare reimbursement calculator to help therapists determine what they should expect to be reimbursed for each procedure.
Over the years, Medicare hasn’t shied away from making the billing process confusing and difficult to navigate—hence, the introduction of programs like MPPR. So, what should PTs, OTs, and SLPs do to manage decreased Medicare payments? Every clinic has different needs, but therapists should certainly revisit their payer contracts to make sure they are not unnecessarily—or unknowingly—agreeing to these types of reductions. Alternatively, practices can add cash-based services to their offerings—thus allowing patients to receive treatment on a pay-as-you-go basis—to help fill in the revenue gaps created by payment reduction programs. How are you contending with MPPR in your practice? What strategies have you adopted or considered, and which ideas have worked or fallen short? Share your experience in the comment section below.