On November 1, the Centers for Medicare and Medicaid Services (CMS) released the final 2013 Medicare physician fee schedule rule, which sets the therapy cap amount on outpatient therapy services for 2013 at $1,900; updates 2013 payment amounts for physicians, physical therapists, and other health care professionals; and revises other payment policies. The therapy cap exceptions process will expire on December 31 unless Congress acts to extend it. Additional policies that will impact physical therapists include implementation of new functional status codes for reporting therapy services and updates to the Physician Quality Reporting System (PQRS).

The final rule includes a 26.5% across-the-board reduction to Medicare payment rates for physicians, physical therapists, and other professionals due to the flawed sustainable growth rate (SGR) formula. Since 2003, Congress had enacted legislation preventing the reduction every year. CMS announces that it is "committed to fixing the SGR update methodology and ensuring these payment cuts do not take effect." Excluding the 26.5% projected SGR payment cut, the aggregate impact on payment of changes in the rule for outpatient physical therapy is a positive 4% in 2013. 

As required by the Middle Class Tax Relief Jobs Creation Act of 2012, CMS will begin to collect data on claim forms about patient functional status for patients receiving outpatient physical therapy, speech therapy, and occupational therapy beginning January 1, 2013. Therapists will be required to report new G codes accompanied by modifiers on the claim form that convey information about a patient's functional limitations and goals at initial evaluation, every 10 visits, and at discharge. This data is for informational purposes and not linked to reimbursement. Until July 1, 2013, claims will be processed regardless of the inclusion of functional limitation codes. Beginning July 1, 2013, all claims must include the functional limitation codes in order to be paid by Medicare. APTA's comments on the proposed fee schedule rule had a significant impact in this area of the final rule, which reflects many of the association's recommendations.

For 2013 the reporting period for PQRS will be based on a 12-month reporting time frame. The bonus payment amount will be .5%. Calendar year 2013 also will be used as the reporting period for the 2015 PQRS payment adjustment of -1.5%. Successful reporting requirements for the program will remain as they were in 2012, requiring that participants report a minimum of 3 individual measures or 1 group measure via claims-based reporting on 50% or more of all eligible Medicare patients, or report a minimum of 3 individual measures or 1 group measure via registry reporting on 80% or more of all eligible Medicare patients. 

The final rule with comment period will appear in the November 16 Federal Register. APTA will post a detailed summary of the final rule shortly. 

[Update as of 5:00 pm: APTA's summary of the rule is available at www.apta.org/Payment/Medicare/CodingBilling/FeeSchedule/.]