10% Medicare Pay Reduction for 2021

Why it Happened & What Comes Next

The 2021 CMS Final Rule is out. Medicare’s 10% fee schedule cuts are the law of the land beginning January 1st.

It’s time for a frank discussion about what this means for Outpatient Rehabilitation.

Each of us were hopeful that advocacy would reverse the 8% Medicare cuts announced in November 2019. Yet after months of coordinated lobbying, the cuts were increased to 9% and the actual math works out to a 10% reduction for Outpatient Rehab. (The 9% fee reduction was an “estimated impact” from CMS.)

Legislation that could delay these payment cuts remains on the table. But sadly, House Resolution 8702 has not been touched since it was introduced in October.

Why is this happening? Where does this leave us?

The 10% cut is not a slam against Outpatient Rehabilitation. 31 other medical sectors are being cut as well. This is not a surprise. The Affordable Care Act became law ten years ago. Everyone knew these cuts were coming.

While we can never stop lobbying for a fair solution, it is obvious that we also need to consider other alternatives. Advocacy is the right solution to the cuts. But it is not the only solution.

We cannot risk the scenario that your practice faces the double digit pay cuts

With no solution at all

Systems 4PT understands our role. Our role is to deliver technologies that enable your practice to continue to succeed even amidst the tightening world of healthcare reform.

The perspective we encourage you to adopt:

The payment cuts are only devastating

If you do nothing to counter them

You are not in this alone. You need business partners who can deliver a clear path to higher profitability in 2021. You’ve not heard that before. But it is important that we discuss it. And it is vital that our industry accepts it.


  1. You should participate in MIPS. The Medicare Incentive-based Payment System will offset (earn back) about 20% of the Medicare’s 2021 pay cuts for nearly all Systems 4PT practices. You can earn back $2.00 of every $10.00 that Medicare has cut. Why wouldn’t you do that? Systems 4PT’s 10-second MIPS workflow and QCDR submission is provided at no extra charge.
  2. It is a well-known fact right now, today, the technology exists that will increase your collections per claim by 10%. While most outpatient rehab practices are using non-integrated EMR & billing, there is universal agreement that non-integrated billing meaningfully stunts collections.
    • Medicare is 20% of your revenue. But you have the ability to increase collections by 10% with all payers, 100% of your revenue.

When you modernize your billing software you will be paid more in 2021, not less

  1. Finally, the technology described above costs 30% less than what you are spending today on EMR and billing.

The only reason why the looming reimbursement cuts would damage your practice is if you don’t take any action to offset them.

Why isn’t our industry discussing these simple solutions?

Surprisingly, many of the loudest voices in our industry have failed to plan ahead. It is well known that some of the largest EMRs in Outpatient Rehab are not integrated with billing! You cannot afford to use non-integrated billing, (where EMR and therapy billing are different programs, with different names, in different databases). That type of antiquated approach is exactly what healthcare reform is designed to eliminate.

It’s an EMR’s responsibility to keep you ahead of the curve. But looking at things form the 10,000-foot perspective you’ll agree, most EMRs in Outpatient Rehab have failed to do that.

By properly responding to healthcare reform (by embracing technology) your practice will earn more profit in 2021 than prior to the 10% cuts.

Evan as payments dramatically tighten

Your practice can earn higher profit than ever

But only if you partner with companies who saw this coming and planned ahead

As a business partner who wants you to succeed, Systems4PT urges you to prepare for our obvious future. You should expect that other payers will follow suite and lower their fee schedules with Medicare. There is nothing stopping them. And we all know that In 12 months, therapist assistants will be reimbursed 23.2% less than they are today.

Are we saying your practice can thrive, even prosper, if other payers adopt the 10% cost?


Our industry has changed. Your practice cannot succeed unless you change as well. Systems 4PT did the obvious, we read the Affordable Care Act. We saw this coming. We have been urgently preparing because we understand, “Our Role is to Support Your Practice”.

Systems 4PT is calmly confident that we will deliver:

  • 10% higher collections per claim vs. today
  • Higher documentation compliance, written in half the time. While minimizing or eliminating documentation homework and the therapist burnout that comes with it
  • For 30% loser cost vs. what you spend today for EMR and billing.

We’d like to show you the solution.

You deserve to be optimistic as well.

Sign Up for a Free Demo

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