The Centers for Medicare and Medicaid Services (CMS) spent its spring and summer issuing proposed and final rules, some of which contain major shifts in the payment and reporting systems for physical therapists (PTs) in private practice, as well as those working in skilled nursing facilities (SNFs) and home health settings.

Here's a quick guide to the status of some of these rules and resources available from APTA—including an August 23 webinar, cohosted by APTA and CMS, focused on the proposed transition of physical therapists to the Quality Payment Program (QPP) beginning in 2019 (12:00 pm–1:00 pm, ET).

Medicare Physician Fee Schedule (MPFS)
Status: Proposed; comments due September 10
Resources: CMS fact sheet, PT in Motion News series (part 1, part 2, part 3), APTA fact sheets (part 1, part 2, part 3); recorded webinar (from August 7); August 23 webinar

It's hard to overstate the magnitude of the changes that will be faced by PTs in private practice who furnish services under Medicare if the proposed fee schedule is adopted as written. Basically, these PTs would be subject to an entirely new payment system, known as the Quality Payment Program—a significant shift toward value-based care models. At the same time, the unpopular Functional Limitation Reporting system would go away—thanks in part to APTA’s continued advocacy against it.

Under QPP, qualifying PTs would have a choice of participating in the Merit-based Incentive Payment System (MIPS) or—if available to them—an advanced alternative payment model (AAPM). MIPS requires reporting in 4 performance categories (PTs in 2019 will be required to report under only 2 categories: quality and improvement activities), with providers earning points in each category. An annual MIPS score would determine whether the providers earn a payment incentive, remain neutral in payment, or are subject to a penalty. Several of the data points must be reported electronically through certified electronic health record (her) vendors or registries such as APTA’s Physical Therapy Outcomes Registry. The inclusion of PTs comes as MIPS enters its third year of the program.

The AAPM-based QPP option allows participants to be exempted from MIPS and opens up the possibility of a 5% annual payment bonus (beginning in 2021 for the 2019 performance year) in addition to payment adjustments up or down; however, certain patient or payment thresholds must be met. The proposed rule also includes an option for QPP participation through Medicare Advantage.

But that's only 1 element of the fee schedule. The proposal also contains provisions around coding for services furnished by physical therapist assistants (PTAs), and a slight boost in payment. And yes, CMS intends to continue use of the KX modifier for claims that exceed an annual dollar threshold (currently $2,010 for physical therapy and speech-language pathology services combined).

Home Health Prospective Payment System (HH PPS)
Status: Proposed; comments due August 31
Resources: CMS fact sheet; PT in Motion News coverage

Another big change in the works: CMS wants to adopt an entirely new payment methodology for home health, known as the Patient Driven Groupings Model (PDGM). The new system, mandated by the Bipartisan Budget Act of 2018, lays out a new payment landscape through changes that include shifting care from 60-day to 30-day episodes, removing therapy service-use thresholds from case-mix parameters, and establishing a 5-parameter system that plays into payment determinations.

Under the proposed rule, payment for 30-day episodes would be tied to 1 of 216 payment groupings that reflect the patient's status related to 5 major factors: timing, admission source, clinical group, function level, and comorbidities. The proposed rule also includes changes to certifying and recertifying patient eligibility for continued home health care; an allowance for home health agencies to report the cost of remote patient monitoring; and a transition toward payment for home infusion therapy. The changes proposed by CMS would result in an estimated 2.1% increase in payments in 2019, or about $400 million.

Skilled Nursing Facility Prospective Payment System (SNF PPS)
Status: Final, effective October 1, 2018
Resources: CMS fact sheet; PT in Motion News coverage; APTA fact sheet

SNFs were not exempt from a major payment revamp, either: effective FY 2020—which begins October 1, 2019—CMS will do away with the Resource Utilization Groups Version IV (RUG-IV) process and implement an entirely new system called the Patient-Driven Payment Model (PDPM). The model bases payments on a resident's classification among 5 components including physical therapy and uses case-mix groupings as multipliers to establish a per-diem rate. The rule also includes a 2.4% payment increase for FY 2019.

Inpatient Rehabilitation Facility Prospective Payment System (IRF PPS)
Status: Final, effective October 1, 2018
Resources: CMS fact sheet; PT in Motion News coverage; APTA fact sheet

For PTs, the biggest news here is that CMS is dropping the Functional Independence Measure instrument from the IRF-PAI, effective FY 2020—which begins October 1, 2019—and eliminating reporting requirements around methicillin resistant staph aureus (MRSA) infection and the percent of patients assessed and given the seasonal flu vaccine. CMS also will allow physicians to lead team meetings remotely and will evaluate that change with an eye toward expanding the flexibility to other team members.

Inpatient Prospective Payment System (IPPS)
Status: Final, effective October 1, 2018
Resources: CMS fact sheet; PT in Motion News coverage

CMS is upping payment to acute care hospitals (ACHs) to the tune of some $4 billion and reducing reporting requirements. The final rule drops 40 quality-reporting measures for hospitals involved in Medicare and Medicaid EHR incentive programs, but it backs away from a proposal to eliminate 4 measures of patient safety and retools (and renames) the EHR Program, now called the "Promoting Interoperability Program." Long-term care hospitals (LTCHs) will see an estimated 0.1% drop in payment and an end to a CMS policy that pays LTCHs at a rate comparable to an ACH if an LTCH admits more than 25% of its patients from a single ACH. That program was suspended in 2018—the rule makes the change permanent.

Outpatient Prospective Payment System (OPPS)
Status: Proposed, comments due by September 24
Resources: CMS fact sheet; PT in Motion News coverage 

Should Medicare reimburse outpatient facilities owned by hospitals at higher rates than it does independent providers' facilities? CMS doesn't think so. The proposed rule would eliminate the payment differential that favors "off campus" hospital-owned facilities, resulting in an estimated $760 million in savings. Those savings would help to offset an overall payment increase of $4.9 billion—a 1.25% increase. The proposed rule also ups payment for ambulatory surgical center (ASC) payment by 2% and establishes separate payment for nonopioid pain management drugs that function as a supply when used in an ASC surgical procedure.

Short-Term, Limited-Duration Health Plans
Status: Final, effective October 2, 2018
Resources: CMS Fact Sheet; PT in Motion News coverage

Not really a CMS rule, but something worthy of attention. The US Department of Health and Human Services has expanded the use of short-term, limited duration health plans that were originally intended to provide consumers with temporary gap coverage after changing jobs. Now, consumers can enroll in short term plans for just under a year, with an option to renew for up to 3 years. Short-term plans differ from typical Affordable Care Act (ACA) marketplace health plans in that they do not have to cover essential health benefits or ensure certain consumer protections required by the ACA, including those related to preexisting conditions and continued coverage.