Every year, The Centers for Medicare and Medicaid Services (CMS) adjusts the Medicare Physical Fee Schedule as part of a broader strategy to facilitate an equitable healthcare system for quality, affordable, innovative, and accessible service delivery.

However, over the years, there has been a downward trend in payment rates for healthcare professionals, and unfortunately, the proposed rule for the calendar year 2023 Medicare physician fee schedule again includes significant reimbursement cuts to several providers, including physical therapists (PTs).

On the other hand, CMS’s proposed rule also offers some relief, such as the possibility of making direct supervision of physical therapy assistants (PTAs) through virtual presence permanent, a welcome change after Covid-19!

To ensure that providers are up to date with everything that impacts their services, let’s further explore the impact of these proposed changes by CMS. 

Cuts to Therapy and Medicare Telehealth Services

In the past, we briefly touched on how CMS’s proposed budget cuts could affect your therapy and rehab practice and how you can help. Now that comments and suggestions on the proposed ruling are closed, we sit and wait for the finalized rule to be announced – so let’s use this time to review the potential changes in further depth.

One of the most significant proposed changes is we’ll see yet another budget cut in Medicare payments through the decrease in the conversion factor. The conversion factor is an element used to calculate the final payment that providers receive for various codes. 

Starting in January 2023, the conversion factor will be $33.0775, a 4.42% or $1.5287 decrease from the $34.6062 conversion factor initially adopted in 2022. 

The cumulative percentage decrease is partly due to the expiration of a one-year 3% increase in payments that Congress approved in 2022. The remaining 1.42% drop results from updates to E/M code families, such as nursing facilities and inpatient hospital visits. Additionally, the proposed changes do not account for inflation, resulting in payment rates below the rising costs of living. 

Moreover, the policies aim to extend certain telehealth flexibilities, such as allowing telehealth services to be furnished in any geographic area. This will allow certain services to be provided through audio only, enabling occupational and physical therapists, speech-language pathologists, as well as audiologists to deliver telehealth services to patients who are unable to participate in video calls.

In the proposed policy, CMS maintains that telehealth services provided by PTs and PTAs will go on for the duration of the Covid-19 public health emergency (PHE) plus the additional 151 days tacked on by Congress. Beyond this period, the current physical therapy codes in telehealth will not be authorized. 

So does this mean therapy and rehab providers and their assistants won’t be paid for their telehealth services? Not necessarily! To cater to telehealth services delivered by physical therapists, the CMS has added several codes to the Category III list of codes that will allow them to be paid through 2023. 

What Does CY 2023 Look Like For Therapy and Rehab Practices?

If finalized as proposed, the budget cuts could have devastating impacts, especially when practices are still recovering from the effects of the Covid-19 pandemic. 

Some of the potential downsides associated with the proposed cuts by CMS include:

  • Closure of some practices. The cuts will significantly reduce revenue for practices operating in rural or medically underserved areas — as many patients in these areas use Medicare. For this reason, it will be difficult for such services to remain profitable, so many may likely face closure. 
  • Overworked and overbooked practices. If practices close, patients will flock to the remaining facilities. Due to the increased number of visits, these practices will likely be overbooked and overwhelmed. The resulting staff burnout can cause lower quality of care and even resignations among staff who cannot cope.
  • Negative patient experiences. As the chain reaction continues, the practices that stay open will try to offer faster appointments to Medicare patients in order to serve more non-Medicare patients and boost their revenue. This will potentially lower the quality of services rendered to Medicare patients.
  • Turning away patients in need. With the proposal seeking to cut into the physician payments with a decade-low conversion factor, some practices that don’t see closure as an option may choose to accept non-Medicare patients only. This effort to avoid loss of revenue will see many Medicare beneficiaries in need of therapy get turned away. 

The Silver Lining

Even with proposed budget cuts, it is not all doom and gloom – especially with the provision to allow physical therapy assistants to be virtually supervised! This will go a long way in increasing access to treatment. 

For their continued commitment to deliver care despite the reduction in conversion factor, physicians can take relief from:

  • Relative value unit (RVU) weighting. CMS seeks to revise the Medicare Economic Index, which could shape final payment amounts for the better! Physical therapists may see as much as a 2% increase in payment by 2024.
  • Remote therapeutic monitoring. In the 2022 Physician Fee Schedule, CMS added five CPT codes for remote therapeutic monitoring (RTM). These new codes will allow physical therapists to bill for setting patients up with monitoring devices to capture non-physiological data. 
  • New code for chronic pain management and treatment. The new policy change also proposes new HCPCS codes that would facilitate payment for services determined medically necessary for chronic pain management. 

How Can Your Practice Prepare for These Revenue-Impacting Changes?

It’s clear that maintaining an accurate billing ledger is now more important than ever. With an RCM technology partner, your practice can take advantage of accurately billed ICD-10 codes, maintain up-to-date reimbursement rates, as well as automate time-consuming operational tasks.

For example, having accurate details for all your patients’ insurance is important, but the tedious process of obtaining detailed and verified insurance information is a big contributor to revenue leakage. By having a solid RCM technology partner on your side that can ensure an easy and automated verification process, you can keep your staff from chasing those dollars and focus your resources on other areas of opportunity.

Plus, with the help of automated tools to quickly appeal denials, your practice can avoid the all-too-common challenges of incorrect claim denials and dreaded filing deadlines that can cripple profitability and reimbursements.

Advocacy in Action

Regardless of what is actually finalized for the Medicare Physician Fee Schedule, Raintree urges all therapy and rehab practices to remain diligent and take proactive measures against potential budget cuts. By implementing digital solutions to protect your organization and patients, it’s possible to future-proof your business and continue to deliver quality care to Medicare beneficiaries.

As part of Raintree’s commitment to advocacy efforts, we have partnered with the Alliance for Physical Therapy Quality and Innovation (APTQI) to ensure the well-being of the therapy and rehab profession does not go unnoticed in Washington, DC. For more information on how you can help raise awareness, check out The SMART Act or take action here.