On November 1, 2019, the Centers for Medicare & Medicaid Services (CMS) released the final 2020 Medicare physician fee schedule, which took effect January 1, 2020.1 In short, physical therapists are one of 26 healthcare specialties facing reimbursement reductions beginning in 2021.2 CMS specifically recommended cutting CPT (Current Procedural Terminology) codes that are billed for physical therapy services by 8%, but the exact per-code cuts have yet to be determined.2,3,4 Given that most private insurance companies set their reimbursement rates based on Medicare’s fee schedule, these cuts are particularly alarming.
The reimbursement cuts may feel like déjà vu, as CMS proposed a 26.5% cut in reimbursement rates in 2012, which Congress was able to prevent via the American Taxpayer Relief Act of 2012.5,6 Nevertheless, this eventually led to a 2% reduction in Medicare payments, which took effect on April 1, 2013.4 It also resulted in the Multiple Procedure Payment Reduction (MPPR), a policy that reduced reimbursement for multiple codes billed for rehab services by 20% in 2011.4,7 However, the American Taxpayer Relief Act of 2012 revised this reduction to 50% for all rehab settings starting April 1, 2013.8 In 2013, The APTA estimated that MPPR will reduce reimbursement rates by an additional 6-7% for outpatient physical therapists.3,5 However, the direct impact of the MPPR reduction is based on the individual and outpatient practice policies of billing for services.
While the implications of continued cuts to reimbursement may not appear to impact the consumer directly, some medical, surgical and physical therapy clinics have completely discontinued offering services to patients with Medicare or require them to pay an additional cash charge on top of what Medicare reimburses. This can be detrimental to smaller, lower-income communities where cost of and access to medical treatment is an issue.
According to CMS, physical therapists do not require a medical referral in order to evaluate and treat individuals in direct access settings; however, patients must still be under the care of a physician, and the physicians must certify the patient’s plan of care.9 Thus, while physical therapists are legally allowed to provide treatment to patients in “full” direct access states without a medical referral, most insurance companies still will not reimburse for these services unless a physician referral is present.10,11,12,13 As such, physical therapists are unable to effectively serve as first-line, healthcare providers for neuromusculoskeletal conditions (unless they are operating in cash-based practices that do not accept third party/insurance payments). Moreover, patients must ultimately pay to see multiple providers before being able to access physical therapy services.
2021: TIME TO OPEN CASH-PAY P.T. CLINICS?
PT practices can choose to treat Medicare patients and accept the 2020 fee schedule.14,15 However, physical therapists may choose to become a non-participating provider. While this still places PTs in a contract with Medicare, it allows therapists to bill “more freely” and charge what they think their services are worth. Though this option may seem more autonomous, physical therapists can only charge within the range that Medicare allows, and the financial burden of treatment falls to the patient. That is, patients would be required to pay more out of pocket and wait for reimbursement by Medicare.14,15
Alternatively, many physical therapists have decided to ditch Medicare and the health insurance model entirely by opening cash-only clinics. Given the $100,000 to $225,000 in student loans that most recent physical therapist graduates have invested in their 7+ years of education (i.e. 4-year bachelor’s degree, 3-year DPT degree, plus an additional 1-2 years of residency and/or fellowship completion by some), cash-only clinics seem to offer more control over fair and reasonable payment for services provided than the steady decline, and sometimes sharp cuts (e.g. 8% Medicare cut effective January 2021), that Medicare and 3rd party insurance companies have offered over the past 20 years.16
Furthermore, physical therapists in cash-only clinics are able to provide the most appropriate treatment (and the appropriate frequency and duration of treatment sessions) that the individual patient needs rather than offering a limited list of authorized interventions (and for an arbitrary duration) that the insurance company is only willing to reimburse for. Cash-only clinics do offer patients the option to choose their care, specifically on the preventative and maintenance side of healthcare, as CMS currently does not pay for such.17 Nevertheless, not all patients have access to and can afford cash-only services.
SHOULD I HAVE PATIENTS SIGN an ABN?
Given that there are expected to be 79 million individuals on Medicare in 2030,18 many physical therapists are fearful of losing this patient population secondary to cost and access. Therefore, some physical therapists are continuing as Medicare providers, but they are having patients sign an Advance Beneficiary Notice of Noncoverage (ABN) Form CMS-R-131. This is a form created by CMS that informs patients of reimbursements that will likely be denied by Medicare.19 If services are denied, the cost is incurred by the patient. In the event that patients do not sign the ABN form, physical therapists must then choose to provide free service, limited services (e.g. no dry needling since Medicare deems dry needling as “non-covered” since January 1, 2020), or deny the patient the treatment altogether, thus placing the physical therapist in an ethical and moral dilemma.
BILLING FOR DRY NEEDLING
In late 2019, CMS introduced two new billing codes (CPT codes) for dry needling, 20560 and 20561.20 Billing code 20560 describes a needle insertion without injection into one or two muscles, while 20561 describes multiple needle insertions without injectate into three or more muscles.20 However, CMS presently considers dry needling a non-covered service, a decision also adopted by many private insurance companies (e.g. BCBS in North Carolina and a few other states). Moreover, CMS considers dry needling neither “sometimes therapy” nor “always therapy” at this time.20,21 Instead, CMS states that “Dry needling services are non-covered unless otherwise specified through a national coverage determination (NCD)”.21,22 Therefore, as of January 1, 2020, and in patients with Medicare (and some private insurance companies such as BCBS), PTs are now required to provide dry needling services for free or require patients to sign an ABN and pay an additional out-of-pocket charge for the service. Currently, those additional out of pocket charges seem to range between $40 and $65 for each dry needling treatment, which respectively, many patients cannot afford.23,24,25,26
MERIT-BASED INCENTIVE PAYMENT SYSTEM (MIPS)
A Merit-based Incentive Payment System (MIPS) was implemented by CMS in 2018 to incentivize providers to achieve optimal patient outcomes in return for an 8% increase in reimbursement rates. 21,27 However, outcomes related to dry needling are presently not considered part of MIPS.21,27 Moreover, starting in 2022, the MIPS performance threshold will be based on the median performance of all participating clinicians. As a result, nearly half of clinicians enrolled in MIPS will not earn the 8% bonus, and clinics that repeatedly under perform risk being penalized.27 Given the added time requirement to record and submit MIPS data, which could be spent seeing additional patient, many clinics are choosing not to participate.
In order to continue providing services to patients with Medicare, many outpatient PT clinics have incorporated several strategies. First, clinics are paying physical therapists less. While other health care professionals are also facing cuts, they have traditionally been paid significantly more than physical therapists. According to the U.S. Bureau of Labor Statistics, the median salary for a physical therapist in 2018 was $87,930 a year.28 Other professions scheduled to receive an ~8% reimbursement cut include cardiac surgeons, ophthalmologists, pathologists, radiologists, and nurse anesthetists.1 In 2018, the median annual salary pay for physicians and nurse anesthetists was $208,000 and $174,790, respectively.29,30 In addition, physical therapists that graduate from DPT (Doctor of Physical Therapy) programs incur on average of $96,000 of debt.31,32
Students that have already completed their entry-level DPT degree are now attempting to compensate for their limited income potential by seeking advanced level training in order to become specialists in the profession. This is reflected by the significant increase in the number of residency and fellowship programs accredited by APTA and AAOMPT over the last 10 years.33 While continuing education helps to strengthen the PT profession and improve patient outcomes,34 the cost of a 1-year residency or 1-year fellowship program is typically between $12,000 and $16,000 (or similar amounts deducted directly from the salary), and the added training does not seem to correlate with increased pay in most employment settings.
Physical therapy clinics are also attempting to compensate for cuts in reimbursement by seeing more patients. As a result, physical therapists are working longer hours, booking multiple patients per hour, and heavily using support staff (i.e. physical therapist assistants, physical therapy techs, and athletic trainers) to increase productivity.35 Notably, physical therapist assistants, the only support staff covered by Medicare, are also scheduled to receive a 15% reimbursement cut per the 2022 Medicare physician fee schedule on top of the already scheduled 8% cut.3,4,15, 36
Most physical therapists want to provide an exceptional service to all patients looking to overcome the pain and disability associated with their neuromusculoskeletal condition. The 8% reimbursement reduction in Medicare payments coming in to effect at the beginning of 2021 will inevitably force physical therapists to further trim business expenses and push them to focus more on administering the most cost-efficient yet state-of-the-art interventions to achieve optimal outcomes that please the client (the patient!) first rather than the insurance company. Due to the Medicare and insurance cuts coming down the pipe in 2021, cash-only physical therapy clinics will likely become more widespread and quite possibly the more sustainable model.
As patient advocates, physical therapists must stand united as a profession and fight to demonstrate value within the U.S. healthcare system. This will require stronger participation in professional organizations such as APTA and AAOMPT, a laser-focused vision on improving clinical skills, and subsequently, achieving exceptional clinical outcomes, and a greater commitment to publishing high-quality clinical trials that show the efficacy of physical therapist administered interventions for a wide range of neuromusculoskeletal conditions.
Brūs Layson, DPT, Cert. DN, Cert. SMT, Dip. Osteopractic
Director of Clinical Operations, Peak Physical Therapy and Sports Rehab
Fellow-in-Training, AMMT Fellowship in Orthopaedic Manual Physical Therapy
Benjamin England, DPT, Cert. DN, Cert. SMT, Dip. Osteopractic
Physical Therapist, Mallers & Swoverland Orthopaedic Physical Therapy
Fellow-in-Training, AMMT Fellowship in Orthopaedic Manual Physical Therapy
Fort Wayne, IN
Raymond Butts, DPT, PhD, MSc, Dip. Osteopractic
Senior Instructor, American Academy of Manipulative Therapy
Coordinator, AAMT Fellowship in Orthopaedic Manual Physical Therapy
James Dunning, DPT, PhD, MSc, FAAOMPT, Dip. Osteopractic
Director, AAMT Fellowship in Orthopaedic Manual Physical Therapy
Owner, Montgomery Osteopractic Physiotherapy & Acupuncture Clinic
- CY 2020 Physician Fee Schedule Final Rule. (2019, December 26). Retrieved from: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index
- Final 2020 Fee Schedule: CMS Relents on PTA Differential System for 2020; Presses on With Planned 8% Cut to Physical Therapy in 2021. (2019, November 4). Retrieved from: http://www.apta.org/PTinMotion/News/2019/11/04/PFSFinalRule/
- Jannenga, H. (2019, November 6). Founder Letter: Is the 8% Payment Cut the Wake-Up Call Rehab Therapists Need: Retrieved from: https://www.webpt.com/blog/post/founder-letter-is-the-8-payment-cut-the-wake-up-call-rehab-therapists-need/
- 26 Deep Medicare Cuts. (2019). Retrieved: https://www.aptqi.com/policy-agenda/
- FAQ: 2013 Medicare Physician Fee Schedule and MPPR. (2013, March 25). Retrieved from: https://www.apta.org/Payment/Medicare/CodingBilling/FeeSchedule/2013/FAQ/
- 2013 Medicare Changes. (2013, July 5). Retrieved from: http://www.apta.org/Payment/Medicare/2013/Changes/
- Dunne, C. (2010, December 29). What is MPPR and how does it work? Retrieved from: ohca.org/uploads/old/MPPR_2011.pdf
- Verhovshek, J. (2018, April 5). Just the Facts: Multiple Procedure Payment Reductions (MPPR). Retrieved from: https://www.aapc.com/blog/41773-mppr-facts/
- Physical, Occupational, and Speech Therapy Services. (2012, September 5) Retrieved from: http://www.cms.gov/…/TherapyCapSlidesv10_09052012.pdf
- Do I Need a Referral for Physical Therapy Under Medicare. Retrieved from: https://marketplacea.com/do-i-need-a-referral-for-physical-therapy-under-medicare/
- Healthwise Staff. (2017, November 9). Physical Therapy. Retrieved from: https://www.cigna.com/individuals-families/health-wellness/hw/medical-topics/physical-therapy-zt1045
- Physical Therapy. (2019, June 6). Retrieved from: https://tricare.mil/CoveredServices/IsItCovered/PhysicalTherapy
- Referral and Prior Authorizations. Retrieved from: https://healthselect.bcbstx.com/content/medical-benefits/referrals-and-prior-authorizations
- Lower Costs with Assignment. Retrieved from: https://www.medicare.gov/your-medicare-costs/part-a-costs/lower-costs-with-assignment
- McDermott, E. (2019, December 26) Everything PTs Need to Know About Accepting Medicare Assignment. Retrieved from: https://www.webpt.com/blog/post/everything-pts-need-to-know-about-accepting-medicare-assignment/
- Physical Therapist (PT) Education Overview. (2019, September 12). Retrieved from: https://healthselect.bcbstx.com/content/medical-benefits/referrals-and-prior-authorizations
- Medicare Physical Therapy Cuts Impact Access To Care. Retrieved from: https://www.medicarefaq.com/blog/upcoming-medicare-physical-therapy-cuts-may-impact-patients-access-to-care/
- Umans, B. (2009, January). The Medicare Beneficiary Population. Retrieved from: https://www.aarp.org/health/medicare-insurance/info-01-2009/fs149_medicare.html
- FFS ABD. (2019, September 19). Retrieved from: http://cms.gov/Medicare/Medicare-GeneralInformation/BNI/ABN
- APTA Regulatory Review: Final Physician Fee Schedule for 2020. (2019, November 19). Retrieved from: http://www.apta.org/Payment/Medicare/CodingBilling/FeeSchedule/Review/2019/11/
- McDermott, Erica. (2016, August 8). Billing for Dry Needling. Retrieved from: https://www.webpt.com/blog/post/billing-for-dry-needling/
- Medicare National Coverage Determinations Manual Chapter 1, Part 1 (Sections 10-80.12) Coverage Determinations. Retrieved from: cms.gov/…/Manuals/Downloads/ncd103c1_Part1.pdf
- Frequently Asked Questions on Dry Needling. Retrieved from: https://www.resultspt.com/dry-needling-frequently-asked-questions
- How Much Does Physical Therapy Cost? (2019, January 7). Retrieved from: https://www.ptprogress.com/how-much-does-physical-therapy-cost/
- PRICING AND PAYMENTS ACCEPTED. Retrieved from: https://restorativept-dryneedling.com/pricing/
- Selman, R. (2018, December 5). Dry Needling FAQs- Southern Rehab & Sports Medicine. Retrieved from: https://www.southernrehab.com/dry-needling-faqs/
- Stearns, M. (2020, February 1). Part I: MIPS Updated Requirement for Eligible Providers in 2020. Retrieved from: https://journal.ahima.org/quality-payment-program-2020-changes-and-requirements-part-i/
- Occupation Outlook Handbook. Physical Therapists. (2019, September 4). Retrieved from: https://www.bls.gov/ooh/healthcare/physical-therapists.htm
- Occupation Employment and Wages. Nurse Anesthetists. (2018, May) Retrieved from: https://www.bls.gov/oes/current/oes291151.htm
- Occupation Outlook Handbook. Physicians and Surgeons. (2019, September 10). Retrieved from: https://www.bls.gov/ooh/healthcare/physicians-and-surgeons.htm
- Jette, D. U. (2016). Physical therapist student loan debt. Physical therapy, 96(11), 1685-1688.
- Legislation to increase access to physical therapy services for patients in underserved communities [news release]. Alexandria, VA: American Physical Therapy Association; April 8, 2011.Retreived from: http://www.apta.org/Media/Releases/Legislative/2011/4/8/.
- Physical Therapy Residency: Your Questions Answered. (2019, January 23). https://www.ptprogress.com/physical-therapy-residency/
- Rodeghero, J., Wang, Y. C., Flynn, T., Cleland, J. A., Wainner, R. S., & Whitman, J. M. (2015). The impact of physical therapy residency or fellowship education on clinical outcomes for patients with musculoskeletal conditions. journal of orthopaedic & sports physical therapy, 45(2), 86-96.
- McKee, K. (2018, April 19). Balancing Act: How Many Patients Should a PT See in a Day? Retrieved from: https://www.webpt.com/blog/post/balancing-act-how-many-patients-should-a-pt-see-in-a-day
- APTA to CMS: Proposed 8% Cut is ‘Arbitrary’ and Puts Patients at Risk. (2019, September 27). Retrieved from: https://www.apta.org/PTinMotion/News/2019/09/27/8PercentCutCommentsToCMS/
- Hughes, M. (2018, November 5). CMS’s Final Bow: The 2019 Final Rule. Retrieved from: https://www.webpt.com/blog/post/cms-s-final-bow-the-2019-final-rule/