I’m mad as hell—and I know I’m not alone. Based on commentary I’ve heard across the industry, many of you are not only angry, but also deeply discouraged about CMS’s sweeping 8% cut to outpatient Medicare payments for physical therapy services. I get it. Payers—especially Medicare—have dealt us a lot of blows over the years. And this 8% reduction—on top of the 15% cut to reimbursement rates for PTA and OTA services beginning in 2022—is an awful lot to contend with. Quite frankly, some clinics, namely those that don’t make necessary changes to evolve, won’t make it through this. But those that are willing to adapt have an opportunity to shift the trajectory of our entire industry in a direction that is good for all of us and our patients. I don’t believe this cut will be our profession’s death knell. But if this isn’t our wake-up call to rise, unite, step up our game, and proactively advocate—for ourselves, our patients, and our profession—then I don’t know what will be. Tell me: what else is it going to take?
A Brief (but Painful) History
If you’ve been following me for any length of time, then you’ve probably heard me say that I don’t believe in dwelling on the past—and that’s still true. But I do believe in using the past to improve our future. With that in mind, here’s a brief overview of the regulatory burden PTs have faced over the years. Spoiler alert: This is not the first time CMS has siphoned funds away from rehab therapy to balance its budget, or that it’s implemented punitive reporting programs to combat fraud—and it likely won’t be the last. That’s why we have to change; CMS isn’t going to.
1997: The Therapy Cap
The cap we’re all familiar with originated in 1997 as a temporary fix. In 2018—yes, 21 years after it first appeared—the Senate repealed the cap, replacing it with a soft threshold. While this appeared to be a win for PTs and their patients, not much actually changed for us (same use of modifiers, same concern over potential audits for going above the threshold). Additionally, this opened the door for CMS to make other cuts in order to balance an increase in therapy expenditures.
In an attempt to improve care quality, CMS launched PQRS in 2006—and then shut it down in 2016. For a long time, I was a big supporter of the program; I genuinely believed that we could use this system to demonstrate our value to CMS and other stakeholders. But PQRS wasn’t capable of enabling that—especially because most of its reportable PT measures said nothing about our value or skill as providers. Basically, it was a lot of work for pretty much no reward.
Unlike the first two initiatives, the multiple procedure payment reduction (MPPR) program is still in effect today. Under MPPR, CMS reduces payments by an estimated 6% to 7% when rehab therapists bill more than one “always therapy service” during the same visit.
In 2013, CMS established yet another now-defunct quality-based reporting program called functional limitation reporting (FLR). Under FLR, therapists were required to complete a lofty amount of burdensome code and modifier reporting—or receive outright claim denials.
2021: The 8% Payment Cut
This is the biggest and most concerning cut to physical therapy reimbursements I’ve seen yet. And it’s partly the result of another organization lobbying CMS for improved reimbursement rates on evaluation and management codes. Remember: Managing a budget is a balancing act. Every budget increase requires an equal and opposite budget decrease. Unfortunately, we seem to be easy targets for decreases—and some of that is on us. Last year, the Office of Inspector General (OIG) reviewed 300 randomly selected Medicare claims for outpatient physical therapy services and found that 61% did not meet Medicare’s standards for medical necessity, coding, or documentation, which means Medicare overpaid $367 million. You can bet they’re looking for ways to recoup that.
2022: PTA and OTA Reimbursement Reductions
You know how I mentioned above that repealing the therapy cap opened the door for CMS to make other payment cuts? Well, this is how they chose to capitalize on that. While CMS originally proposed these cuts at the same time that they repealed the cap, it didn’t get much attention until the 2020 proposed rule was released. Then, everyone took notice. Fortunately, thanks to industry-wide advocacy efforts—from the APTA, PT-PAC, and thousands of rehab therapists who submitted comments to CMS—the agency decided to amend its original proposal and thus, reduce the impact of the payment differential. It’s not ideal—the cuts will still take effect when a PTA independently provides up to 10% of a service—but it’s better than it could have been.
A Quick Level Set
To be clear, the 8% cut is onerous, but it is not yet set in stone. For starters, we don’t know yet which codes will be affected—and the impact of this cut will vary heavily based on each practice’s makeup. Furthermore, all practices—even those with a large percentage of Medicare patients—can offset the impact of both sets of cuts (the 8% overall cut and the 15% cut to PTA reimbursements) by taking steps to optimize their operations, payer mix, and assistant use.
Down with the status quo.
As I alluded to above, this is not the time to remain stubbornly attached to the status quo. It’s no longer serving you, which means it’s time to embrace change—starting with how you think about patient care. As I wrote in the above-cited article, “Logistically speaking, we should be leveraging assistants to improve efficiency and increase patient volume.” That means having PTs and OTs administer services that specifically require their specialized skill set—and sharing more patient care with PTAs and OTAs. Rehab therapists must get out of the mindset that PTs and OTs need to stay with every patient throughout the entirety of the appointment, because that frankly is not always the case. And despite what you may think, sharing a patient with an assistant won’t necessarily take away from the patient’s experience or satisfaction with his or her care”—as long as you create a culture that prioritizes excellent patient care and a team approach. Furthermore, regardless of who is providing treatment, you should be actually putting your hands on the patient during every interaction—and you should be embracing innovation and technology to stay relevant as a modern healthcare provider.
Let’s take a look at a hypothetical example: for simplicity’s sake, say your PT practice has one PT and one PTA. If your PT sees 10 patients a day at $85 a visit, then he or she generates $850 a day for the practice. The PTA sees another 10 patients a day at 85% of the PT’s rate ($72.25). This generates an additional $723 per day, bringing the total gross earning potential for your clinic to $1,573. The average PTA salary is $57,750 annually or $27.77 per hour; the average PT salary is $87,930 annually or $42.27 per hour.
Assuming an eight-hour work day, payroll expenses amount to $560.32 ($222.16 for your PTA and $338.16 for your PT). Add in payroll taxes and benefits, and the average payroll cost to this practice is still 40% of revenue. With another 40–45% attributed to clinic expenses, you’ll still have at least a 15–20% margin. Using the income numbers above, in a year of workdays (261 days), your practice will accrue $82,110.60 in profit above and beyond staff salaries. And that’s with a relatively conservative estimate about patients seen per day.
Additionally, all practices should be looking for ways to streamline their operations, remove waste, and automate processes using the technology available to them. That (and collecting meaningful outcomes data to underscore our value) is the best way to enhance patient care, increase new patient volume, and improve retention—all things that are guaranteed to improve your bottom line and help mitigate the impact of reimbursement cuts. One of our biggest issues at the moment is a lack of consistency in terms of treatment plans and practice; the lack of standardization based on evidence is hurting our profession, so a focus on consistent in-practice processes is key. We also need to be more discerning about our payers and diversify our revenue streams with cash-based service offerings; that way, we aren’t completely at the mercy of CMS and insurance companies.
The 8% reduction is subject to change.
Beyond that, though, there’s still hope that we might be able to eek out some relief for ourselves—if we act now. According to CMS, the details of the cut may be “subject to change,” which means we still have an opportunity to work together—to channel all of our collective emotions—into a plan to reduce its immediate impact. After all, we were able to get CMS to relent on some of the rules for the PTA/OTA modifiers.
But the real issue is bigger than just this cut.
The Big Picture
Let’s take a hard look at the reality of the situation. CMS’s reimbursement reductions and burdensome, ineffective reporting programs endanger our patients and our profession. These decisions contradict compelling evidence about the cost-effectiveness of physical therapy. Case in point: This retrospective cohort study demonstrated that patients with new-onset low back pain used fewer healthcare benefits and accrued fewer healthcare costs in states with unrestricted direct access to physical therapists. According to the authors of that study, “Individuals who saw a physical therapist first in states with provisional access had significantly higher measures of health care utilization within 30 days, including plain imaging and frequency of physician visits, than individuals who saw a physical therapist first in states with unrestricted access.” Beyond that, patients who saw a physical therapist first in full direct access states had 13% lower costs at 30 days and 32% lower costs at 90 days compared to individuals who saw a primary care physicians first—in either direct access or non-direct access states.
We’re still a commodity.
Given this—and countless other examples—if CMS is looking to reduce costs and better serve its beneficiaries, wouldn’t it make sense to encourage greater PT service utilization? Instead, the agency is penalizing patients and providers for selecting safe, non-invasive, non-addiction-forming care—that also costs less. With as much attention the opioid crisis has been getting, you’d think we would all be on the same page when it comes to ensuring our patients have better access to conservative first-line interventions that don’t cause widespread problems and suffering. But we’re not. According to APTA President Sharon Dunn, PT, PHD, “The 8% cuts to PTs in the face of mounting evidence for our roles in healthy aging, fall prevention, and stark reduction in opioid exposure and overall costs is inexplicable and irresponsible. Our US citizens & publicly supported health system deserves better.”
If CMS really believed in the unique value that rehab therapists provide, it wouldn’t pay us less—and it wouldn’t keep us relegated to the sidelines as unofficial providers. We’re still technically considered a service in CMS’s eyes—a commodity, a cost to be managed. (Did you know that’s why we can’t opt out of Medicare like physicians can?) As far as I’m concerned, this goes beyond faulty logic. We’re operating in two completely different systems of reality, with motives that just aren’t lining up. So, beyond being vigilant about CMS’s future moves (because this certainly will not be the last cut directed at us) and reactively advocating for ourselves—there were more than 10,000 commentsprotesting the cuts to no avail (yet)—we’ve got to change our tack.
A Plan for the Future
For starters, we absolutely must clean up our act. There really is no excuse for 61% of any given sample of claims not adhering to standards of medical necessity, let alone standards of documentation and coding. That’s something that’s in our power to improve upon—and we have the resources and the knowledge to do so. Our profession absolutely must make the standardization of care and quality (based on outcomes data) a priority. Let’s not give CMS—or any other payer, for that matter—another reason to put a target on our back. Then, we need to take this fight to the consumer—our patients: Medicare beneficiaries who can hold CMS accountable for its actions. More on that below.
And finally, we need to come together and unite behind a proactive advocacy strategy that supports our profession not just through the next calendar year, but through the next decade. I don’t know about you, but I find this propensity for reactivity exhausting—and futile. We’ll never be able to effect the change we want unless we get ahead of it. We must look at the big picture and—right now—focus our energy on this industry-wide cut. After all, this impacts more than Medicare providers and patients. This sets a precedent and sends a dangerous message to the rest of the healthcare industry.
What’s done is done with the assistant differential. But going forward, we absolutely must be more strategic—more proactive—than we’ve ever been before. Here’s how:
An Opportunity to Effect Change
Change can be daunting. Stepping up can be daunting. Advocating for yourself and others can be daunting. But if we want our profession and our patients to succeed, then there is no other option. The good news is that you’re not doing any of this alone. Here are three ways to get involved (because none of us can afford to stand on the sidelines any longer):
One of the lowest-lift methods for getting involved is supporting an already-established advocacy organization with your money or time. The APTA has made solid gains with programs like the PPS Key Contact program, in which PTs are paired with local congressional representatives to provide insight on how upcoming healthcare legislation will affect our industry. You can also join me at the Federal Advocacy Forum in Washington, DC from March 29–31, 2020. It’s a great place to learn about the latest issues we’re facing as well as how to advocate for the profession.
None of our wins could have happened without the tireless work of the PT-PAC—an organization that lobbies congressional representatives for the benefit of all PTs and PT patients. With that in mind, I strongly encourage each and every one of you to contribute what you can to support this group. Just think: If every PT contributed $20 to the PT-PAC, it would be the largest advocacy body in health care. There’s power there—power that we, for whatever reason, have simply chosen not to tap. Well, if there ever was a time to pull out our wallets, it’s now. And if you aren’t already, you should also become an APTA member. I see this as a baseline responsibility for all of us.
One of the best things you can do to support this profession is to collect objective outcomes data and use your voice to share it with other payers and providers. Even better: Step up as a healthcare thought leader to speak at healthcare conferences and contribute articles to physician-, patient-, or consumer-focused publications. The more we share our passion for this profession and its impact, the more awareness and support we’ll generate from other stakeholders and patients alike.
Without question, the best advocates that we can possibly get are our patients. They are the ones intimately impacted when Medicare reduces access to care that could improve—or preserve—their quality of life. Not only are they acutely aware of what they’re missing out on, but they’re also perfectly positioned to establish a grassroots-style advocacy program that has the power to spur real change. (And, as Joshua Cohen pointed out in the comment section of this post, there are other patient-centered organizations, like AARP, that may be willing to throw their collective weight into supporting this effort, too.) Let me remind you that as of 2012, there are 76.4 million baby boomers—most of whom would greatly benefit from our care.
And we need all the help we can get from people who are willing to bend the ear of every legislator who will listen. According to Dunn, “We are going to need Congressional help on this one. CMS cuts the very care that keeps seniors mobile and functional at home!”
Now, I know that getting Medicare patients on board with advocating for themselves—and us—may not be the easiest feat, which is why we’re using our resources to help. We wrote a complete letter from the perspective of a patient—which you can download here—that patients can sign and mail to CMS and/or their state representatives in protest of rehab therapy-related cuts. So, the next time you have to ask a patient to pay out-of-pocket for services that CMS should cover—or you come across any other barrier that stands between a patient and life-saving or life-improving care—share with them the truth about CMS and the games that this agency is playing with their wellbeing. Then, hand them this letter and ask that they sign it and send it in to the administrator of CMS, Seema Verma, as well as their local government officials.
Have really fired-up patients who want to take their advocacy involvement to the next level? Encourage them to participate in a nonprofit advocacy group like the Center for Medicare Advocacy or The Medicare Rights Center. Additionally, they can always submit complaints about coverage—or lack thereof—directly to Medicare via this form.
Without question, we deserve to be compensated as the musculoskeletal experts we are—for the measurable value we provide to our patients. We cannot—must not—take yet another Medicare payment cut lying down. Now is the time to unite as a profession—as a community. It is literally now or never. I’m mad as hell—and I’m not going to take it anymore. Are you?
About the Author
Heidi Jannenga, PT, DPT, ATC/L, is the president and co-founder of WebPT, the leading practice management solution for physical, occupational, and speech therapists. Heidi leads WebPT’s product vision, company culture, and branding efforts, while advocating for the physical therapy profession on a national scale. She co-founded WebPT after recognizing the need for a more sophisticated industry-specific EMR platform and has since guided the company through exponential growth, while garnering national recognition. Heidi brings with her more than 15 years of experience as a physical therapist and multi-clinic site director as well as a passion for healthcare innovation, entrepreneurship, and leadership.
An active member of the sports and private practice sections of the APTA, Heidi advocates for independent rehab therapy businesses, speaks as a subject-matter expert at industry conferences and events, and participates in local and national technology, entrepreneurship, and women-in-leadership seminars. In 2014, Heidi was appointed to the PT-PAC Board of Trustees. She also serves as a mentor to physical therapy students and local entrepreneurs and leverages her platform to promote the importance of diversity, company culture, and overall business acumen for private practice rehab therapy professionals.
Heidi was a collegiate basketball player at the University of California, Davis, and remains a lifelong fan of the Aggies. She graduated with a bachelor’s degree in biological sciences and exercise physiology, went on to earn her master’s degree in physical therapy at the Institute of Physical Therapy in St. Augustine, Florida, and obtained her DPT through Evidence in Motion. When she’s not enjoying time with her daughter Ava, Heidi is perfecting her Spanish, practicing yoga, or hiking one of her favorite Phoenix trails.