Blog Post

The Complete History of the New PT Payment System (PTCPS Special Report, Part 1)

Learn the history and philosophy behind the APTA's proposed coding system. Click here for part one of our series covering the complete history, here.

Brooke Andrus
5 min read
February 9, 2016
image representing the complete history of the new pt payment system (ptcps special report, part 1)
Share this post:


Get the latest news and tips directly in your inbox by subscribing to our monthly newsletter

If you’re a PT, then the numbers 97001, 97110, 97140, and 97530 probably are as deeply ingrained in your memory as the average person’s street address, phone number, or birthday. Well, what if I told you that in less than two years’ time, those numbers—and the CPT codes they represent—actually could become nothing more than a memory? If that sounds like crazy talk to you, then allow me to introduce you to the APTA’s proposed Physical Therapy Classification and Payment System (PTCPS).

If implemented, PTCPS—formerly known as APS (Alternative Payment System)—will completely change the way physical therapists code for the services they provide during patient visits.

The scary thing is that many PTs have no idea this proposal—which could become actual policy as early as January 2017—even exists.

And even those who are aware of this potential radical shift in payment methodology might not have delved into the details of the new system—or its possible implications. To make the whole situation even stickier, the proposal has spurred a heated debate among various industry leaders and groups—which has resulted in some anti-PTCPS movements that are gaining major traction.

So, in an effort to shed light on PTCPS and the controversy it has generated, WebPT will publish a three-part blog series on the topic—complete with insights from those closest to the issue. In this first installment, I’ll recount the history of PTCPS and summarize the details APTA has released regarding the new system.

In the Beginning

While the embroilment over PTCPS only hit the public radar in recent months, the system itself has been in the works for quite some time. According to APTA, the development of PTCPS dates all the way back to 1997, when Congress enacted the Balanced Budget Act (BBA). In addition to creating the Medicare therapy cap, this legislation “included a directive to create a new payment system for rehabilitation services,” APTA explains.

That directive drove the earliest payment reform exploration efforts. But in recent years, the push for reform has been motivated by the US healthcare system’s impending move to a value-based payment environment. Thus, “as APTA began to explore the ways physical therapy can be incorporated into the evolving value-based health care system, it became apparent that the current procedure-based coding system must be replaced with a more bundled, per-session system.”

Under Pressure

In the years following BBA enactment, government insurance programs—particularly Medicare—introduced a series of regulatory initiatives aimed at controlling and reducing the costs associated with rehab therapy services. These included such commonly known programs as multiple procedure payment reduction (MPPR) and correct coding initiative (CCI) edits. As a result, rehab therapists have suffered decreased payments and increased compliance burdens—both of which helped reignite APTA’s push for change.

In 2010—the same year President Obama signed the Affordable Care Act (ACA) into law, thus hastening the reform of healthcare cost and delivery models in America—APTA began work on its initial draft of the proposed new coding system, then known as APS (switched to PTCPS in 2012). As part of that effort, the association issued a survey to its membership “asking where they saw payment for PT services heading,” said Carmen Elliott, APTA’s senior director of payment policy, in a recent interview with WebPT. According to Elliott, many survey respondents said they anticipated “moving to a per-session, per-diem model.”    

From Services to Sessions

In line with that feedback and the changing regulatory landscape, APTA’s new coding model—unlike the incumbent CPT coding system—allows providers to code for entire sessions, rather than individual modalities.

So, instead of billing a CPT code for each service provided during a particular treatment session, the provider bills a single code for the entire session as a whole (though there are instances in which providers may need to submit more than one code).

And the value of those codes is based on the severity and intensity of the session (i.e., the complexity of the patient’s condition and the degree of expertise and effort required to evaluate and/or treat that patient). According to APTA, the benefits of this adjustment are two-fold:

  • Per-session codes better account for the work and depth of clinical practice involved in providing physical therapy services, as they reflect “the severity of the patient’s condition and the intensity of the services provided.”
  • Per-session codes could “alleviate challenges” associated with CCI edits and multiple-procedure payment reductions.

Furthermore, as current APTA president Sharon Dunn recently told WebPT, session-based codes more accurately reflect the value therapists offer—in terms of both results and cost savings—as medical experts rather than merely providers of medical services. “Our current coding system records only the procedures physical therapists utilize, which is reflective of a service rather than a profession,” she said. “There is a paradigm shift occurring in health care from volume-based care to value-based care. New models of payment and delivery should better describe physical therapist practice to payers and the public, ultimately bringing us closer to patient-centered care and value-based payment that more closely aligns with the benefits we are capable of bringing, system-wide. The end goal is that our patients will be better served.”

As explained here, the original conceptual model “was built around 12 core codes, based on member feedback.” That model featured “a 3-level evaluation system, and a 3x3 matrix of intervention codes based on patient severity and intensity of services provided,” APTA notes in this payment reform timeline. In the years since it released the original proposal, APTA has made some adjustments in response to testing results and feedback from its own task force as well as the Physical Medicine and Rehabilitation (PM&R) work group, which was formed during the 2012 AMA CPT Editorial Panel meeting and includes representatives from AOTA, NATA, ASHA, ACA, and AAOS, among others. But, as Elliott confirmed, the system is still split into two coding components—one for evaluation and one for intervention (a.k.a. treatment). Furthermore, the evaluation component includes code options for three different levels of evaluation (low, moderate, and high) along with a single option for re-evaluation.

Details on the evaluation component will be released in July of this year as part of the 2017 Medicare Physician Fee Schedule Proposed Rule. At that point, there will be a 60-day period during which CMS will accept comments on the proposal. However, Elliott foresees the new evaluation codes being included in the 2017 Final Rule—which means they likely will go into effect on January 1, 2017. So, if all goes according to plan, PTs will say “sayonara” to 97001 and 97002 in less than a year.

The intervention (i.e., treatment) component has undergone more extensive revisions, evolving from a “9-code matrix” into “a linear set of ranked codes” that “maintains a patient management model and integrates patient severity and clinician intensity of work and expertise,” Dunn wrote in this October 2015 letter. She went on to explain that the modifications are based on “negotiations with the AMA work group.”

Because the intervention component of the coding system is much more varied and complex than the evaluation component, it’s taken more time for the work group to fine-tune the system. The version of the coding system used in the first round of pilot testing (which I’ll cover in greater detail in the next section of this post) featured five levels of interventions. However, according to Elliott, “Right now, we’re looking at possibly having less levels.”

The question on most therapists’ minds, of course, is how providers will determine the appropriate level of severity and intensity for each code they select. According to Elliott, in addition to providing specific criteria within each code description, the coding guidelines include language instructing therapists to incorporate factors such as patient history, clinical presentation, depth of examination, and clinical decision-making into their coding decisions.

The guidelines also advise therapists to use a standardized patient assessment tool, but, as Elliott confirmed, the system "does not currently incorporate outcomes scores" into the actual value of the codes (more on that in a bit).

One important note: while the APTA website provides many resources on the history of, and philosophy behind, the new coding system, details on how providers actually will use those codes—including the coding guidelines as well as a list of the codes themselves—are noticeably absent from the APTA’s PTCPS web page, which provides this explanation: “Following the work by the task force, APTA submitted the PTCPS model to the American Medical Association (AMA). Upon submission to the AMA, PTCPS became AMA property and subject to strict confidentiality rules.” In a nutshell, that means the codes are “no longer an APTA product,” meaning the APTA is legally forbidden to “give away code descriptions,” Elliott said. That means that, as with the evaluation codes, the general PT community likely won’t have the opportunity to comment on the intervention codes until they are released as part of a formal proposal—and at this point, that is projected to be the 2018 Medicare Physician Fee Schedule Proposed Rule (meaning the new intervention codes could go into effect as early as January 1, 2018). However, as a side note, APTA recently confirmed that a PM&R work group meeting scheduled for this month has been cancelled. Some speculate that cancellation could, in turn, delay the implementation of the intervention portion of PTCPS. However, according to APTA senior media relations specialist Erin Wendel-Ritter, “We don’t yet know how this will affect payment reform as it relates to the intervention codes, but we’re working on determining next steps.”

Testing, Testing—One, Two; One, Two

In mid-2014, APTA began a two-phase pilot testing exercise. During the first phase, PTs and OTs used the new payment system to code for hypothetical patients. During the second phase, PTs used the new system to recode cases for patients they had already seen (OTs did not participate in the second round).

As explained in this APTA document, the first phase of testing included 108 physical therapists spread among four sites: Charlotte, Chicago, Los Angeles, and Philadelphia. Participants “were required to be practicing physical therapists with at least 1 year of experience, be familiar with CPT coding, and complete training for the proposed new PM&R codes.” The second phase included 33 physical therapists—all of whom met the same participation criteria as those therapists involved in the first phase of testing—and took place at two sites: Intermountain Health Care in Salt Lake City and University of Pittsburgh Medical Center (UPMC).

While APTA has received criticism on its testing methods—with many industry leaders saying the sample size was not large or geographically varied enough to be reliable—Elliott emphasized that the initial testing exercise was intended to be exploratory in nature. “The purpose [of the pilot test] was to inform us of where the gaps are,” she said. “It wasn’t meant to be a formal research test. It was really just to see if PTs could reliably code the same for particular clinical scenarios.”

The results? “We learned that there was strong reliability for levels one and five [of the intervention codes], and that there was some ambiguity between levels two and three and levels three and four,” Elliott explained, noting that, as a result, the work group is looking into enhancing the code descriptions and/or further collapsing the number of code levels. Here are some additional pilot testing takeaways, as summarized in this APTA report:

  • Musculoskeletal cases tended to be coded using the lower-level evaluation and intervention codes, whereas neuromuscular cases tended to be coded using the higher-level codes.
  • There was a lack of consistency between code levels and the “clinical components of physical effort and direct contact.”
  • While participants generally believed that, compared to the current coding system, the new system better reflected the scope of rehab therapy practice, they also saw many opportunities for improvement.
  • Participants identified a need for clearer definitions of the terms that guide code selection in the new system (e.g., “personal factors” and “clinical decision-making”). They also recognized a need for language that better distinguishes the different levels of intervention and the role direct contact plays in that progression.
  • Participants emphasized the need for pre-implementation training, saying documentation standards will need to change to ensure providers record “more detailed information regarding clinical decision making, the level of patient complexity, and changes in a patient’s status.”

Testing concluded in September 2014, and the results were collected and analyzed through the end of the year. APTA and AOTA presented preliminary findings to the AMA CPT Editorial Panel in February 2015; based on those results, both associations recommended continuing forward with the evaluation and re-evaluation codes and revising the portion of the system dedicated to intervention codes (as mentioned in the section above). In April 2015, the Relative Value Scale Update Committee received the evaluation and reevaluation codes. Also at that time, both the APTA and AOTA got the go-ahead to survey the proposed PT and OT codes to “determine the appropriate work value of proposed codes in terms of time, mental effort and judgment, technical skill, physical effort, and psychological stress.” The survey process began shortly thereafter, with the APTA surveying members in a variety of practice settings, including private practice, skilled nursing, and outpatient hospitals.

One point of contention among members of the APTA and the therapy community at large: it took several months for the association to release the full pilot testing results to the general public. And while that report is now available, the full results of the work value survey still have not been released—leaving many members of the PT community in the dark about how the new codes will be valued. According to APTA, the the work value survey results “are property of the AMA and cannot be released.”

Into the Great Unknown

Delays in information dissemination—like those cited above—have bred some discontent among those in the PT industry. Furthermore, many PTs were—and in some cases, still are—unaware that this massive CPT code overhaul was even happening. But according to Elliott, that wasn’t for lack of trying on APTA’s part: “We’ve posted as much information as we can on our website, we’ve done presentations at numerous conferences...and we’ve met with stakeholders, including our members and various groups and leaders [within the PT community],” she said. “We feel we’ve really done our due diligence to make sure our membership is aware of what’s going on.”  

Despite those efforts, there seems to be a wave of panic rippling through the rehab therapy space—and understandably so, considering that the current timeline projects that the evaluation portion of the new system will go into effect just about a year from now.

After all, how can providers prepare themselves and their practices to adopt a completely new set of CPT codes if they don’t even know what those codes will be?

Others feel the structure of the new system—specifically, the fact that it incentivizes the treatment of patients with more complex, severe conditions—will discourage early therapy intervention. And that, in turn, could actually lead to worse patient outcomes, which could potentially decrease the perceived value of physical therapy as a care option. Furthermore, as Elliott mentioned, APTA has not articulated a clear plan for incorporating outcomes into the new payment system—and that has raised concerns about the system’s viability in the emerging pay-for-performance landscape.  

Those concerns have many in the rehab therapy industry outwardly questioning APTA and actively working to delay implementation of the new system in its current form. The call for greater transparency is growing louder, with many industry leaders and organizations voicing their opposition in a very loud—and very public—way. The members of the Alliance for Physical Therapy Quality and Innovation (APTQI)—a group of 15,000 therapists at 4,000 clinics united “to advocate for true payment reform”—have even gone so far as to discontinue their financial support of APTA “while they were actively working on a plan that we believed (and still believe) will be detrimental and damaging to our member companies, as well as to the entire industry.”

In the next installment of this PTCPS special report, I’ll dive deeper into that opposition, the controversy it has sparked, and the effect this broiling conflict is having within the PT space. Stay tuned!


Download your evaluation complexity quick guide.

Enter your email address below, and we’ll send you a super-simple chart to help you decide which level of complexity—and thus, which CPT code—is appropriate for any given patient evaluation.


KLAS award logo for 2024 Best-in-KLAS Outpatient Therapy/Rehab
Best in KLAS  2024
G2 rating official logo
Momentum Leader Winter 2024
Capterra logo
Most Loved Workplace 2023
TrustRadius logo
Top Rated 2023
Join the PXM revolution!

Learn how WebPT’s PXM platform can catapult your practice to new heights.

Get Started
two patients holding a physical therapist on their shoulders