There are several issues affecting physical therapist payment for services in 2013.
Use the resources on this page to stay informed about issues like sequestration, therapy cap, MPPR, manual medical review, functional limitation reporting, and PQRS, and find out how you can support APTA's advocacy efforts.
Podcast: Heard on the Hill: Updates on Sequestration, MPPR, and Therapy Cap - 2/28/13 
Sequestation
Sequestration cuts are scheduled to go into effect on March 1, 2013. These cuts will affect programs important to all Americans, including physical therapy. The impact to physical therapy is expected to be seen in the areas of rehabilitation research, education and Medicare payment. APTA expects the sequester to result in a 5-7 percent cut for NIH funding, 5-8 percent cut for the Department of Education, and a 2 percent payment cut for all Medicare providers. Federal agencies have some discretionary power regarding how to apply these cuts; therefore, the full impact of sequestration will not be known until after March 1. However, health care trade press have been reporting that Medicare cuts will go into effect for services provided on or after April 1; APTA will provide more information as it becomes available. Without Congressional action, the combination of the sequester and MPPR cuts could result in a 8-9% total cut for therapy providers on April 1. Continue checking APTA's website for updates on the full impact of the sequester and any efforts by Congress to retroactively address these cuts.
Therapy Cap, Fee Schedule, and MPPR
January 1, Congress passed the American Taxpayer Relief Act of 2012 (HR 8), which includes several important provisions for physical therapists.
The legislation freezes the Medicare conversion factor for 2013 at the 2012 level, averting a 26.5% cut to physical therapists and other providers under the physician fee schedule, and continues the 1.0 GPCI work value floor through 2013. The legislation also extends the current 2-tier therapy cap exceptions process ($1,900 automatic KX modifier process, $3,700 manual medical review, and application of the therapy cap to hospital outpatient department) for 1 year.
Additionally, in a provision that APTA has called "unjustified, capricious, and poor public policy," the bill applies the multiple procedure payment reduction (MPPR) to therapy services at 50%, up from 20% for office settings and 25% for facility settings, beginning April 1. APTA estimates the application of a 50% MPPR policy will reduce payments by approximately 6-7%. This reduction will be partially offset by a 4% increase that resulted from the Centers for Medicare and Medicaid Services' (CMS) use of new survey data of practice expenses conducted by APTA.
The impact of the MPPR reduction on individual practices and facilities will vary depending on the CPT codes billed and the typical duration of the therapy sessions. To determine the impact on your practice, refer to APTA's MPPR calculator, which can be used to determine payment rates for 2012 and 2013. APTA is advocating to stop the implementation of the MPPR provision (see info below).
In addition, several other policies of importance to physical therapists went into effect January 1, including functional limitation reporting and PQRS. Learn more.
Congressional Summary of Medicare Provisions and Offsets (.pdf) - 1/2/13
Statement by APTA President on Taxpayer Relief Act of 2012 - 1/1/13
FAQ: 2013 Medicare Therapy Cap - 1/2/13
FAQ: 2013 Physician Fee Schedule and MPPR - 1/2/13
2013 Fee Schedule and MPPR Calculator
Take Action on MPPR!
As the April 1 MPPR deadline approaches, APTA is asking all members to contact their legislators and request that they delay implementation of MPPR until January 1, 2015. APTA members can contact their legislators using the Legislative Action Center. Nonmembers can use APTA's Patient Legislative Action Center to e-mail their legislators.
Message:
- Ask your members of Congress to delay implementation of MPPR until January 1, 2015, by amending the continuing resolution.
- Tell your legislators that APTA is developing an alternative payment system, which is scheduled to begin on January 1, 2015, and will move payment away from the current multiple procedures system.
- Allowing MPPR to take effect will result in a 6-7% payment cut for outpatient therapy providers, in addition to the 6-7% cut applied in 2011. The combination of sequestration and MPPR could result in at least a 9% cut for therapy providers under Medicare in 2013.
- These payment cuts will be difficult for providers to absorb. Outpatient therapy settings may stop treating Medicare patients or be forced to close their doors.
For more information on APTA's advocacy efforts and to stay up-to-date on the latest MPPR news, join PTeam, APTA's grassroots network.
Interim Guidance for Manual Medical Review Process
February 21, the Centers for Medicare and Medicaid Services (CMS) issued interim guidance on how the manual medical review (MMR) process will be implemented in 2013 for outpatient therapy claims that exceed $3,700. CMS has replaced the 2012 prior-approval process with prepayment review. Under prepayment review, when the patient reaches $3,700 in outpatient therapy services, the MAC will send the provider an additional development request (ADR) asking him or her to submit documentation so that the MAC can determine whether the services are medically necessary. Typically under Medicare, MACs have 60 days to make a determination. However, CMS has stated that with regard to the therapy cap MMR process, MACs must decide within 10 days of receipt of the documentation whether the services exceeding $3,700 will be paid.
Please note that this is interim guidance only. APTA continues to work with CMS to implement a more streamlined and efficient process. In the meantime, physical therapists should consult their MACs' websites for specific information about submitting documentation in response to an ADR.
Functional Limitation Reporting
As of January 1, 2013, practice settings that provide outpatient therapy services must include on claim forms information regarding the beneficiary's function and condition, therapy services furnished, and outcomes achieved. The functional limitation reporting must be completed on evaluation, every 10th visit, and at discharge. All practice settings that provide outpatient therapy services must include this information on the claim form. Specifically, the policy will apply to physical therapy, occupational therapy, and speech-language-pathology services furnished in hospitals, critical access hospitals, skilled nursing facilities, comprehensive outpatient rehabilitation facilities (CORFs), rehabilitation agencies, home health agencies (when the beneficiary is not under a home health plan of care), and in private offices of therapists, physicians, and nonphysician practitioners. For further information on these new reporting requirements, see our Functional Limitation Reporting Under Medicare webpage.
PQRS
In 2013, the PQRS program changes from an incentive-based program to a penalty program, informing both the 2013 bonus and the 2015 penalty. For further information, see our PRQS webpage.