Rehab Therapists’ Long-Awaited Sequel: The 2023 Final Rule Breakdown

This summer we offered up the 2023 proposed rule as our summer read of the year—and right on schedule, CMS has released its next installment in the series: the 2023 final rule. While CMS largely delivered on what was initially proposed, there are a few significant changes to the plot—both for better and worse. Let’s dive in!  

The cut to the conversion factor was deeper than expected. 

As foreshadowed in the proposed rule, the conversion factor for CY 2023 has been reduced; unfortunately, that decrease is slightly larger than expected. The final rule sets the rate at $33.06—a $1.55 decrease from $34.61 in CY 2022, and more than the $1.53 cut suggested in the proposed rule. Worse yet, changes to the work, practice expense, and malpractice expense relative value units (RVUs) should make for an additional 1% decrease to PT and OT reimbursement, according to CMS.  

Why the larger-than-expected hit to the conversion factor? The expiration of the 3% supplemental increase in the physician fee schedule (PFS) passed for CY 2022 due to the public health emergency, paired with the mandated budget neutrality adjustments, means that the figure had to be cut further. And without advocacy and legislative action, additional cuts are on the table for the foreseeable future. 

There is rising action with the therapy threshold.

On the positive side, the annual therapy threshold is increasing in 2023 to $2,230 for both physical and speech therapy as well as occupational therapy—a slight bump from $2,150 in 2022. The targeted medical review threshold remains at $3,000 through 2028, per the Balanced Budget Act of 2018.   

Geographic Practice Cost Indices (GPCIs) will see some changes. 

Depending upon where you live, you may already be familiar with GPCIs: the indices used by Medicare Part B to adjust provider payments based upon that provider’s payment locality. In short, Medicare will pay providers who live in areas with higher health care costs more than they do providers than those living in areas with lower costs based upon the GPCI for that locality.   

CMS is finalizing adjustments to GPCIs beginning in CY 2023, at least in part; due to arcane regulatory requirements, CMS is mandated to introduce half of the GPCI adjustment in CY 2023, with the other half coming in CY 2024. CMS also finalized a redistribution of GPCI funds which, due to those pesky budget neutrality requirements, means that money will be reallocated across the 112 payment localities rather than increased. So, some providers may see decreases in their GPCI, based upon their clinic location.     

Telehealth’s long-term fate remains a cliffhanger. 

Sadly, there was no deus ex machina for therapists when it comes to telehealth, as the final rule formalized that CMS will not add it as a permanent service for PTs and OTs for CY 2023. Instead, CMS continued telehealth’s inclusion as a Category 3 service available to rehab therapists only through the public health emergency (PHE) and a 151-day period after its expiration.

As of now, the PHE will end on January 11, 2023, at 11:59 PM—unless terminated sooner or extended further. In accordance with the expiration timeline mentioned above, CMS will then reimburse for outpatient therapy services delivered via telehealth until June 11, 2023, at 11:59 PM. To put an even finer point to this, PTs, OTs, and SLPs can continue to use telehealth CPT codes (listed below) until CY 2023; however, they will not be reimbursed by Medicare for them on the 152nd day after the PHE is declared over.

The following CPT codes remain available to use for telehealth services through CY 2023: 

An important note: CMS does point to this period during which telehealth will remain a temporary reimbursable service (from now until June 11, 2023) as a chance for interested parties (like rehab therapists) to collect more data to support future permanent inclusion on the Medicare Telehealth Services List. Furthermore, there is some promising legislation in the works (the Expanded Telehealth Access Act of 2021) that would make Medicare telehealth privileges permanent for PTs and OTs, so long as the rehab therapy community bands together to show their support for it. (Hint, hint, nudge, nudge.)

Remote therapeutic monitoring has a major reversal. 

In the proposed rule, CMS suggested making CPT codes 98980 and 98981 non-payable by Medicare and introducing four new RTM G codes, two of which were designed to increase patient access to remote therapeutic monitoring services and the other two aimed at reducing physician and NPP supervisory burden. This move was in response to the widespread concern and conversation between CMS and industry voices regarding the clinical labor involved in both “incident to” services possibly related to these codes and in the direct practice expense (PE) for the treatment management codes.     

However, in a surprising development, CMS has scrapped the RTM G codes and instead changed the existing billing guidelines to allow for any RTM service to be provided under the general supervision requirements. In the final rule, CMS notes that the proposed G codes created confusion, with commenters believing that the valuation of GTRM-3 and GTRM-4 would result in a reduction in reimbursement for non-physician practitioners providing RTM services and a potential “chilling effect” on the availability of RTM services—which CMS is hoping to avoid. 

In a response to this change, the APTA has reached out to CMS for clarification as “incident-to” services do not apply to private practice physical therapy. To stay compliant until further notice, the APTA has recommended private practice physical therapists take a conservative approach and use direct supervision in association with RTM codes. As far as future changes to RTM codes, CMS has stated that they will continue to monitor and be open to comment on the utility and landscape of RTM devices and services for future rules and coding.

PTAs and OTAs are still relegated to secondary character status.  

Physical therapy assistants (PTAs) and occupational therapy assistants (OTAs) unfortunately remain undervalued characters in our unfolding drama. CMS has held firm with the 15% payment reduction to physical therapy or occupational therapy services provided by PTAs or OTAs as signified with the CQ or CO modifiers. In reality, this is only a 12% reduction after calculating the reduction based upon the 80%—covered by Medicare—of the lesser of the actual charge, and the remaining 20% comprising the beneficiary copay. For the math enthusiasts, this is how the reduction is calculated:  

(0.20 + (0.80* 0.85)=0.88

The Merit-based Incentive Payment System (MIPS) mostly remains static.

Our story wouldn’t be complete without the Merit-based Incentive Payment System (MIPS). On a positive note, 86% of MIPS-eligible clinicians received a positive payment adjustment for the 2023 MIPS payment year based on CY 2021 performance period data. Unfortunately, CY 2023 is also the year that the positive payment adjustment for exceptional performance is going away. 

2023 MIPS Scoring

How can you expect your payments to be adjusted based upon the 2023 guidelines? Here’s a quick breakdown: 

• If your Final Score Points fall between 0.0 and 18.75, you can expect a -9% adjustment.
• If your Final Score points are between 18.76 and 74.99, you’ll receive an adjustment between -9% and 0%, based upon a linear sliding scale. 
• If your Final Score Points lands at 75 points precisely, your payments won’t be adjusted.
• For Final Score Points between 75 and 100, you’ll receive a payment adjustment between 0% and 9%, based upon a linear sliding scale.     

It should be noted that the sliding scale is multiplied by a scaling factor greater than zero but not exceeding three, in order to preserve budget neutrality. 

The data completeness requirements for 2023 will hold steady at 70% while the 2024 and 2025 performance periods will push up to 75%.

Additional MIPS Quality Measures

CMS is adding some quality measures and altering or removing an additional 22 bringing the final total of MIPS quality measures to 198—luckily many of these are not rehab related. But, new additions that reflect a specialty set for PT/OT include:

• Quality Measure 048, Urinary Incontinence: Assessment of Presence or Absence of Urinary Incontinence in Women Aged 65 Years and Older: Percentage of female patients aged 65 years and older who were assessed for the presence or absence of urinary incontinence within 12 months.
• Quality Measure 178, Rheumatoid Arthritis (RA) Functional Status Assessment: Percentage of patients aged 18 years and older with a diagnosis of rheumatoid arthritis (RA) for whom a functional status assessment was performed at least once within 12 months.
• Quality Measure 487, Screening for Social Drivers of Health: Percent of beneficiaries 18 years and older screened for food insecurity, housing instability, transportation needs, utility difficulties, and interpersonal safety.

Some changes may be coming to how the performance threshold is determined, however. By regulation, the performance threshold is required to be either the mean or median of the final scores of all MIPS eligible providers, with the HHS Secretary choosing between the two. In the CY 2022 final rule, the mean was set as the measure for the performance threshold for the CY 2024, 2025, and 2026 payment years; in this final rule, CMS indicates that it intends to “reassess and establish the methodology” for the CY 2027, 2028, and 2029 payment years in future rules.   

MIPS Value Pathways (MVPs) see some minor revisions. 

CMS has received a fair amount of feedback regarding the confusing and burdensome nature of having well over a hundred MIPS and QCDR measures to choose from by participating providers. In response, MVPs have become a focus to connect the four performance categories for MIPS reporting and simplify the process overall for improved clinician participation and patient experience. CMS does state that they intend for MVPs to become the only method for MIPS reporting in future years, but they have no timeline for when this would occur.

New MVP development and implementation will have draft versions posted to the QPP website to solicit feedback for a 30-day period. Beginning in January, CMS will begin accepting recommendations for revisions of established MVPs throughout the year, and will host an annual webinar after collecting these recommendations to offer the public a chance to provide feedback.   

The MVPs previously slated to start in 2023—with some revisions—are:

• Anesthesia;
• Chronic Disease Management;
• Emergency Medicine;
• Heart Disease;
• Lower Extremity Joint Repair;
• Rheumatology; and
• Stroke Care and Prevention.

This year’s final rule also added five new MVPs for 2023—all of which are not available to rehab therapists: 

• Advancing Cancer Care; 
• Optimal Care for Kidney Health; 
• Optimal Care for Neurological Conditions; 
• Supportive Care for Cognitive-Based Neurological Conditions; and 
• Promoting Wellness. 

To achieve more comprehensive and detailed reporting of MIPS data, subgroup reporting has been developed. For multispecialty groups, subgroup reporting will in fact remain optional for CY 2023, 2024, and 2025 to ease the transition into the new requirements beginning in CY 2026. 

Social Determinants of Health (SDOH) enter the scene.  

In the proposed rule, CMS identified five key measures that represented major obstacles for patients to seek and receive health care, broadly labeled as Social Determinants of Health (SDOH): 

• Food insecurity 
• Housing instability 
• Transportation problems 
• Utility help needs 
• Interpersonal safety 

CMS has finalized an improvement activity for SDOH screening, titled “Practice Improvements that Engage Community Resources to Address Drivers of Health.” Per the activity description, clinicians are encouraged to use an health IT-enabled tool that includes standards-based, coded questions or fields for the capture of data. Providers are also required to: 

• Develop formal relationships with community-based organizations to improve the referral process; 
• Create a community resource guide for patients found to be at risk in one or more drivers of health; and
• Record their findings during a screening and implement measures to address those needs.   

CMS is making Accountable Care Organizations (ACOs) more palatable.

CMS has noted negative trends with the Medicare Shared Savings Program. These trends include plateaued beneficiary registration, underrepresentation of higher-spending patient populations, and inequitable minority representation in ACOs. Their final rule for 2023 looks to incentivize providers to participate in ACO programs that will serve rural or underserved communities.

Providers who participate in ACOs that serve these populations will be incentivized through upfront investments from Medicare and participation in an “upside-only risk-sharing model” for a longer period of time before assuming any downside risk.

Virtual direct supervision is sticking around—for now. 

No drastic changes occurred for the direct supervision guidelines between chapters—which means that direct supervision through virtual presence will continue through the calendar year in which the PHE ends. For a quick refresh, the definition of direct supervision was appended at the start of the PHE to not require a physical presence, but instead through a virtual presence using real time audio/video technology. But providers should not forget that supervision requirements vary state to state so check with local state practice acts to follow best practices.

Given that HHS Secretary Xavier Becerra has renewed the PHE though at least January 11, 2023, that means the new direct supervision guidance will remain in place through CY 2023. As for this character’s future, CMS offered little beyond stating that the additional time to collect information would help them assess the potential future of virtual direct supervision, and that they would “consider the comments received from the proposed rule for potential future PFS rulemaking.” 

Chronic pain management joins the action—just not for rehab therapists. 

Fans of a plot twist need look no further than chronic pain management (CPM). CMS finalized two CPM HCPCS codes (G3002 and G3003) as well as the valuation for CPM services for CY 2023. Unfortunately, the sticklers at CMS held firm and did not include PT/OT as listed providers who can bill these codes. 

These new codes remain to be used solely by providers defined as only those with the authority to prescribe medication, but it opens a door—and expressly recognizes the need—for coordination with PT/OT services to treat and manage chronic pain in beneficiaries. CMS also has indicated that they are open to further public comment to add additional pain management codes for other provider types.

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While this follow-up did feature all the key players, there weren’t quite enough exciting developments to keep readers turning the page—all 3,304 of them. Hopefully, next year’s proposed rule has enough of a happy ending for PTs, OTs, and SLPs to make it a true, feel-good read.