The 9% Cut in the Medicare Fee Schedule is Law – But it’s Worse Than That.

The CMS 2020 final rule proposed an 8% cut in the Medicare fee scheduled for PT, OT and SLP, effective 1/1/21. Mid 2020, the reduction in the 2021 Medicare fee schedule increased to what was described as “a 9% reduction”.

This “9% reduction” in the Medicare fee schedule remains in the 2021 final rule. It is the law of the land.

But it’s worse than that.

The “9% reduction” is “an estimated combined impact”. What exactly does that mean? Parsing through the detail, Systems4PT has uncovered the assumptions behind the estimated 9% payment cuts. So far, the implications of these details are being missed by the APTA and our industry’s high-profile consultants.

Quoting CMS:

“With the budget neutrality adjustment, as required by law, to account for changes in RVUs including significant increases for E/M visit codes, the final CY 2021 PFS conversion factor is $32.41, a decrease of $3.68 from the CY 2020 PFS conversion factor of $36.09.”

Let’s review the math: $32.41 is a 10.19% reduction. That’s the law. It takes effect 1/1/21.

CMS has increased the RVU for Initial Evaluations from 1.2 to 1.54 and has increased the RVU for re-evals from .75 to .96. Therefore, eval and re-eval reimbursements will actually increase. However, all other outpatient rehab CPT codes will decline 10.19%.

In other words, 98% of the COT codes you bill to Medicare will be reimbursed 10.19% less than today. Based on the distribution of CPT codes submitted by Systems4PT practices, the average reduction in the 2021 Medicare fee schedule for 2021 will be – 9.7958%, not – 9%.

If we are reporting integers,

– 9.7958% would be reported as a – 10% change in the 2021 Medicare fee schedule.

The 2021 final rule discusses the request to increase RVUs for 97140, and other CPT codes. CMS states that these requests have been denied.

Billing Medicare for Telehealth (Eval codes, 97110, 97112, 97116, 97535, 97750)

Here, we find the analysis from other industry sources to be “easy to misinterpret” and Systems4PT would like to clarify the status of outpatient rehab therapists charging Medicare for Telehealth. Analyzing the CMS 2021 final rule the other analyses you may have seen state that the above codes can only be provided via telehealth by a category 1 basis (our paraphrase of the other analyses). In fact, yes, the CMS final rule absolutely states that the CPT codes listed above can only be provided on a Category 1 basis. (Outpatient rehab therapists are not Category 1 providers).

However, remember that on 3/31/20, CMS allowed Category 2 providers (which includes outpatient rehab), to bill Medicare for the CPT codes listed above via telehealth. This exception remains in place through the COVID public health emergency (PHE).

Taken from the CMS 2021 final rule:

In the “Medicare and Medicaid Programs; Policy and Regulatory Revisions in Response to the COVID-19 Public HealthEmergency” interim final rule with comment period (IFC), (which was issued on March 31, 2020 and appeared in the April 6, 2020 Federal Register (85 FR 19230, 19234 through 19241) (hereinafter referred to as the “March 31st COVID-19 IFC”), on an interim final basis for the duration of the PHE for COVID-19, we also finalized the addition of a number of services to the Medicare telehealth services list on a Category 2 basis.

Translation: Outpatient rehab therapists may bill Medicare for telehealth (just as they have since April 1st, 2020), until the COVID PHE ends.