Blog Post

Stranger than Fiction: Facts from the CMS 2018 Final Rule for PTs, OTs, and SLPs

We've broken down CMS's 2018 final rule pertaining to rehab therapy—from the positives to the negatives and the downright strange.

Kylie McKee
5 min read
November 16, 2017
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They say that rules are made to be broken—that is, unless they’re handed down by the federal government. To make matters even more complicated, rules often change, and sifting through those changes can turn your world upside-down—especially when they’re served in the form of 1,000-plus pages of dry legalese. (If only CMS documents had more compelling narratives, am I right?) Well, until Stephen King offers up his storytelling services to CMS’s legal writing department, we’ll keep digging through the muck for you—and trust us, there’s a whole lot of muck in this year’s final rule. We’re talking new details on the telerehabilitation movement in physical therapy and occupational therapy, 2018 CPT code changes, and adjustments to the therapy cap. So, let’s get to it. Here’s what you need to know:

Therapy Cap

First things first: Let’s cut right to the cap—the therapy cap, that is. Per the final rule document, we’re in for another slight increase to both Medicare therapy caps in 2018—that is, the cap for physical and speech therapy as well as the cap for occupational therapy. Right now, both caps sit at $1,980, with CMS electing to raise them to $2,010 for the 2018 benefits term. But, that’s not the only cap-related development rehab therapists need to be aware of. The terms of the exceptions process—which governs the use of the KX modifier—are set to expire December 31, 2017. Additionally, the manual medical review process for claims that exceed the $3,700 threshold will expire on the same date.

As the rule itself states on page 514, “Without a therapy caps exceptions process, the statutory limitation requires that beneficiaries become financially liable for 100% of expenses they incur for services that exceed the therapy caps.” It goes on to say that “the therapy caps will be applicable without any further medical review, and any use of the KX modifier on claims for these services by providers of outpatient therapy services will have no effect.” In other words, this means that, barring renewal of the established exceptions process:

  • CMS will deny payment of any claims that exceed the $2,010 therapy cap,
  • Medicare beneficiaries will be responsible for any claims that go over the cap, and
  • The KX modifier will be useless come January 1, 2018.

Therapy Cap Exceptions

Okay, that sounds pretty scary—like, apocalyptic scary. But, don’t head for the nearest fallout shelter just yet. After all, Congress has voted to extend the exceptions process—thus preventing the enforcement of a true cap—every year since the therapy cap was first put in place. And this year, there’s even more of a silver lining to the perennial therapy cap saga: APTA has been working with Congress to create a permanent therapy cap fix that would eliminate the threat of a hard cap on therapy services and instead require all claims exceeding a primary threshold (which, per the 2018 final rule, is $2,010) to include a modifier denoting medical necessity (provided that the billed services are, in fact, medically necessary). Additionally, under this policy, any claims exceeding a secondary threshold of $3,000 would trigger a potential targeted medical review. According to our sources at APTA, the proposal will be included in an omnibus Medicare bill that Congress will vote on in December.

Therapy Cap Repeal

Keep in mind that the potential bill to implement a permanent exceptions process is not the same bill that is currently driving the APTA effort to repeal the cap all together. This bill—known as the Medicare Access to Rehabilitation Services Act—would effectively end the therapy cap and replace it with an all-encompassing targeted review process (much like the one that is currently used for claims exceeding $3,700). The bill has been sitting before Congress since February, but with its strong bipartisan support and backing by APTA, ASHA, and AOTA, there’s a lot of optimism surrounding its passage.

Physician Fee Schedule

So, things are looking better on the overall therapy coverage front—but what about at the individual service level? Well, per recommendations from the American Medical Association (AMA), work relative value units (RVUs)—which account for the amount of time, technical skill, and professional judgment used when providing a service—for CPT codes will continue to be maintained under the PFS. In fact, some work RVU values will actually increase. However, some practice expense RVUs—which account for the nonphysician labor within a practice, as well as overhead and equipment expenses—will likely decrease. The good news is that these changes likely won’t impact rehab therapy reimbursements in any noticeable way. That said, APTA is currently reviewing the changes to RVU values for PT services and will soon release a detailed summary.

In other CPT code news, after putting it off for many years, CMS finally conducted a full review of the value levels for the following “potentially misvalued” CPT codes and one HCPCS code:

  • 97032
  • 97035
  • 97110
  • 97112
  • 97113
  • 97116
  • 97140
  • 97530
  • 97535
  • G0283

The APTA and AOTA identified nine additional codes for review:

  • 97012
  • 97016
  • 97018
  • 97022
  • 97033
  • 97034
  • 97533
  • 97537
  • 97542

CMS points out in the rule that “many of these code values had not been reviewed since they were established in 1994, 1995, or 1998.” During the CPT HCPAC meeting this past January, HCPAC suggested altered work times and relative value units (RVUs) for the aforementioned codes based on the group’s research, which included a survey examining the codes. Initially, CMS questioned the credibility of that research—as well as the fairness of the additional MPPR impact on these codes—and thus, proposed to maintain “the existing direct PE inputs.”

In the final rule, though, based on (1) reassurance from HCPCS that MPPR reduction was taken into consideration for the proposed PE input changes and (2) public support for the group’s survey findings, CMS decided against maintaining the existing direct PE inputs for therapy codes. CMS states that “instead, we will accept the HCPAC recommendations for the direct PE inputs for the 19 PM&R codes in this section and the three codes discussed in a subsequent section for services related to orthotics and prosthetics management and/or training.” Furthermore, CMS notes that after “consideration of comments received, we are finalizing the HCPAC-recommended work RVUs, including the times, for all 19 PM&R codes as proposed.”

According to this APTA summary of the 2018 final rule, those recommended RVUs don’t include any cuts; in fact, there are even a few increases. Furthermore, “Initial analysis indicates that overall, the increases and cuts likely balance out.”

CPT Changes

We’ll also see a few changes to a handful of therapy-related CPT codes in 2018. Here’s a brief rundown of those adjustments:

29582 (Multi-Layer Compression System, Entire Leg) and 29583 (Multi-Layer Compression System, Upper Arm & Forearm)

  • Both CPT codes have been deleted for redundancy.

97760 (Orthotic Management and Training) and 97761 (Prosthetic Training)

  • Both code descriptors have been revised to include the term “initial encounter.”
  • Per CMS, both codes were “previously used to report both the initial and subsequent encounters, that, when furnished under the Medicare outpatient therapy services benefit, included services occurring during the same PT or OT episode of care.”
  • The rule also states that for 2018, “CPT codes 97760 and 97761 are intended to be reported only for the initial encounter.”

97762 (Orthotic Management and Prosthetic Management)

  • This CPT code has been deleted and replaced with 97763 (orthotic and prosthetic subsequent encounters) for the 2018 benefits year.
  • According to this CMS document released on November 21, “CPT code 97763 is designated as ‘always therapy’ and must always be reported with the appropriate therapy modifier, GN, GO or GP, to indicate whether it’s under a Speech-language pathology (SLP), Occupational Therapy (OT) or Physical Therapy (PT) plan of care, respectively.”

97532 (Cognitive Skills Development)


Continuing with the CPT code theme, CMS also addressed reimbursement for certain rehab therapy telehealth services in the 2018 final rule. The following codes were submitted for CMS to consider adding to its list of billable telehealth services:

  • 97001 (PT evaluation, now deleted and reported with CPT codes 97161, 97162, or 97163)
  • 97002 (PT re-evaluation, now deleted and reported as CPT code 97164)
  • 97003 (OT evaluation, now deleted and reported with CPT codes 97165, 97166, or 97167)
  • 97004 (OT re-evaluation, now deleted and reported as CPT code 97168)
  • 97110 (Therapeutic exercises)
  • 97112 (Neuromuscular reeducation)
  • 97116 (Gait training)
  • 97535 (Self-care/home management training)
  • 97750 (Physical performance test or measurement)
  • 97755 (Assistive technology assessment)
  • 97760 (Orthotic(s) management and training)
  • 97761 (Prosthetic training)
  • 97762 (Checkout for orthotic/prosthetic use)

Unfortunately, the proposal to add these therapy-related codes to the list of codes eligible for telehealth reimbursement has again been rejected, which means that Medicare beneficiaries will have to keep waiting for telerehab service coverage. The reasoning behind this rejection hearkens back to CMS’s 2017 final rule:

  • First off, CMS “noted that several of these services, such as CPT code 97761, require directly physically manipulating the beneficiary, which is not possible to do through telecommunications technology.“  
  • Second, CMS noted that the providers who perform these procedures the most—PTs, OTs, and SLPs—are not currently listed as eligible telehealth providers. According to CMS, “because these services are predominantly furnished by physical therapists, occupational therapists, and speech-language pathologists, we do not believe it would be appropriate to add them to the list of telehealth services at this time.”
  • As a follow-up to that, the submitter asked CMS to consider adding these codes to the list of billable telehealth services so they could be furnished by eligible distant site practitioners. According to CMS, the agency considered this angle, but decided that “since the majority of the codes are furnished by therapy professionals over 90 percent of the time... adding therapy services to the telehealth list that explicitly describe the services of the kinds of professionals not included on the statutory list of distant site practitioners could result in confusion about who is authorized to furnish and bill for these services.”

The Medicare Telehealth Parity Act

Okay, that makes sense, but it doesn’t make it any less disheartening. However, here’s something worth celebrating: The Medicare Telehealth Parity Act—which seeks to expand Medicare’s list of eligible providers to include rehab therapists—is still alive, kicking, and waiting for a Congressional vote. Considering that, for the past two years, CMS has cited the exclusion of PTs, OTs, and SLPs on the list of eligible providers as one of the agency’s main reasons for not adding therapy-related telehealth codes to the fee schedule, passage of this act would be a much-needed step in the right direction.

Some folks say the truth can be stranger than fiction, and that certainly seems to be the case when it comes to CMS policy. Fortunately, once you cut through the excess, the facts aren’t as scary as they might’ve seemed before—especially if you’ve got some good friends who are willing to help you figure it all out. Plus, thanks to continued progress on the telerehab and therapy cap repeal fronts, I’m optimistic about the changes we’ll see in the year to come. After all, I’ve seen stranger things.


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