The big picture: APTA is fighting a "nonsensical" and "arbitrary" plan to cut physical therapy reimbursement by 8% in 2021.
The US Centers for Medicare and Medicaid Services' (CMS) proposed physician fee schedule (PFS) rule for 2020 is, as always, a wide-ranging plan that affects multiple types of providers. But this year, physical therapists (PTs), physical therapist assistants (PTAs), and the patients they serve are facing a particularly pointed threat: a cut to the reimbursement codes most often used in physical therapy. Combined, these reductions would reduce reimbursement by an estimated 8% in 2021. APTA's comment letter to CMS lays out how the cut could dramatically reduce patient access to effective care, forcing many PTs and other rehabilitation providers to leave Medicare or shutter their doors entirely.

The comment letter also addressed numerous other provisions in the proposed rule, including changes to the Merit-based Incentive Payment System (MIPS), remote physiologic monitoring, digital evaluation, dry needling codes, and telehealth. Additionally, APTA reiterated many of its concerns regarding CMS’ proposal for determining when therapy services are delivered "in whole or in part" by a PTA or occupational therapy assistant. Those concerns were communicated to CMS in detail in August in a comment letter that described the plan as "fundamentally flawed." APTA and 2 of its members, along with 3 other associations, met in-person with the CMS Administrator earlier this month, echoing the same concerns.

The proposed cut, and why it's a bad idea
The cuts are associated with a CMS plan to adopt the American Medical Association-recommended increases in values for office/outpatient evaluation and management (E/M) codes, an increase that APTA sees as generally positive. The problem is in CMS' approach to paying for the increase.

In order to adopt those increases and maintain budget neutrality, CMS proposes cuts to other codes to make up the difference. We believe there are other, more valid ways to respond: seeking additional funding for the increase; applying negative adjustments uniformly across all services; not excluding any specialties, procedures, or service codes; increasing the conversion factor; and phasing in any proposed reductions would be "appropriate and necessary" actions to take, as stated in our letter. Instead, CMS attempts to keep the E/M increase budget neutral through a seemingly haphazard approach that lowers reimbursement for non-E/M codes, resulting in the most drastic cuts to reimbursement for providers who don't bill E/M. That list of providers isn't limited to PTs and occupational therapists—it also includes audiologists, clinical social workers, clinical psychologists, ophthalmologists, optometrists, chiropractors, and more.

In our comment letter to CMS, we point to 5 major areas of concern:

1. The plan is an arbitrary, across-the-board cut that doesn't account for reimbursement decreases in other areas.
We argue that PTs have been the target for cuts through other policies such as the multiple procedure payment reduction (MPPR), sequestration, Correct Coding Initiative edits, and by way of a 2018 revaluation of current procedural terminology (CPT) codes, particularly to the practice expense (PE) of certain codes. When those reductions are combined with the proposed 8% cut, on top of the pending 15% reduction in payment for services furnished by PTAs and OTAs in 2022, the reductions for many PTs could be closer to 23% in 2022. We call that an "unrealistic" plan that will lead to a "significant decline in beneficiary access" to physical therapy.

2. The cut runs counter to CMS' efforts to provide patient access to better care.
Both the US Congress and the Department of Health and Human Services emphasize the importance of a Medicare system that supports integrated team-based care, chronic disease management, and reducing hospital admission and readmission rates—concepts that are central to PT practice. Given this emphasis, we write, it's "nonsensical" to cut reimbursement to the very professionals who play key roles in achieving these aims by decreasing functional limitations and increasing strength and flexibility deficits.

3. In the midst of an opioid crisis and a national conversation on pain management, CMS should be promoting physical therapy, not decreasing patient access to it.
Research makes the case over and over again: physical therapy lowers overall costs of care, and is an effective pathway for management of many types of chronic pain. We ask CMS to explain how the proposed 8% cut supports those ideas, and argue that if Medicare beneficiaries are in need of access to effective nonpharmacological pain management treatments, "there must be adequate payment and coverage."

4. There was little transparency and a seeming lack of responsible analysis in the development of this proposal.
The Regulatory Flexibility Act requires CMS to conduct a regulatory analysis of changes, such as the 8% cut, including the ways it would affect small businesses and possible options for achieving its goals that reduce economic impact. If such an analysis was conducted, it doesn't seem to be reflected in the plan, which clearly puts PTs and many other providers at risk. We write that CMS' nontransparent approach and lack of dialogue with providers may have led to "many flawed assumptions regarding practice."

5. The cut includes unfair reductions to practice expense (PE).
PTs have seen reimbursement for PE—costs incurred in renting office space, purchasing supplies and equipment, hiring nonphysician and administrative staff, and more—decreasing since 2011, when CMS started introducing cuts through MPPR. APTA has always held that applying MPPR to PTs was inappropriate in the first place, and often results in underpayments. The proposed cut includes a PE reimbursement decrease of at least 3%. We write that it's a plan that puts "expediency ahead of quality." Instead, we argue for the removal of the proposed cuts to the PE values of codes used by physical therapists and that CMS recoup that money by looking to those codes used by providers "who do not have as demonstrable costs for equipment and supplies as physical therapy providers."

What's next?
The comments are one part of a multifaceted approach to advocacy against the proposed cuts. APTA members, patients, and other stakeholders have joined a grassroots effort opposing the plan, and the association has joined with the American Chiropractic Association, the American Psychological Association, the American Occupational Therapy Association, the American Speech-Language-Hearing Association, and 5 other professional associations in a letter opposing the cuts and requesting additional dialogue. APTA will continue to work with CMS to educate them on the negative consequences on patient health if this reduction is implemented. APTA and our members will also have a second formal opportunity to fight any proposed cut in the 2021 proposed fee schedule rule that will be released in July 2020.

After the deadline for comments closes at 11:59 pm on September 27, CMS will begin its review process. The final rule is expected to be released in early November.

Reading this before 11:59 pm on September 27? There's still time to add your voice to the effort. Visit APTA's "Regulatory Take Action" webpage to access a customizable template letters on both the proposed 8% cut and the PTA/OTA modifier proposal. It's easy—and crucial.