Physical Therapy Classification and Payment System (PTCPS) Overview

Policymakers are seeking ways to reform payment systems to achieve greater reporting accuracy, promote quality care, and reduce fraud and abuse. In the Balanced Budget Act of 1997, Congress charged the Centers for Medicare and Medicaid Services (CMS) to develop an alternative to the Medicare therapy cap—an arbitrary limit that restricts patient access to clinically appropriate services.

APTA's goal is to reform payment for outpatient physical therapy services to improve quality of care, recognize and promote the clinical judgment of the physical therapist, and provide policymakers and payers with an accurate payment system that ensures the integrity of medically necessary services.

APTA proposes to reform payment for outpatient physical therapy services by transitioning from the current fee-for-service, procedural-based payment system to a per-session payment system. APTA believes that a system that categorizes patients based on the severity of their condition and intensity of the interventions required better reflects the professional clinical reasoning/judgment and decision making by the physical therapist, improves provider compliance, reduces administrative burdens surrounding current payment models, and is consistent with and enhances payer recognition of the value of physical therapist-directed care. To achieve this reformed payment system for outpatient physical therapist services, changes to the existing Current Procedural Terminology (CPT) coding system, which describes services based on 15-minute time-based units and direct 1-on-1 contact, would be necessary. Following these coding changes, the new codes will be valued through the AMA Relative Value Update (RUC) process and implemented in federal, commercial, and state-based payment systems.

Establishing new codes that physical therapists report for their services would be a significant change that would require therapists to learn the new codes and update billing systems. However, with elimination of many of the existing codes that therapists report and the many associated edits, administrative burden would be reduced. This bundled approach to the codes could result in more appropriate valuation of therapy services that better reflects the patient's condition and the clinical judgment of the therapist.

The Physical Therapy Classification and Payment System (PTCPS) (formerly the alternative payment system, or APS) would consist of 3 evaluation codes, 1 reevaluation code, and 5 examination and intervention codes for a total of 9 codes. A physical therapist could conduct an evaluation and an examination and intervention service in the same day; otherwise, a single examination and intervention code would be reported for the services that were delivered. Evaluation codes would be differentiated based on the level of complexity of the evaluation to the physical therapist—limited complexity, moderate complexity, and high complexity. Intervention codes would be differentiated into levels based on the severity of the patient's condition at the time of the visit and the intensity of services provided for the patient during that visit.

Related APTA Policy

Reforming Payment for Outpatient Physical Therapy Services BOD P03-11-04-09
The APTA Board of Directors endorses the development of an alternative payment system for outpatient physical therapist services that transitions from a timed procedure-based system to one that recognizes the quality and value of physical therapist directed health care.

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