On January 1, 2022, the reimbursement for Part B therapy paid under the Physician Fee Schedule (PFS) fell off the proverbial cliff. There were many grassroot industry attempts to address Part B reductions, and although some were successful, others were implemented and are highlighted below.
Skilled nursing facilities (SNF) have been preparing for the first decrease since 2020 via coding modifiers for services performed in whole or in part by either a physical therapy assistant (PTA) (the CQ modifier) or a certified occupational therapy assistant (COTA) (the CO modifier). This reduction, which is effective January 1, 2022, before mathematical adjustment is 15 percent for PTAs and COTAs.
The second decrease relates to an overall reduction in the PFS for all services. This decrease is 3.75 percent effective January 1, 2022. Fortunately, this is an area where Congress responded to industry advocates and passed the Protecting Medicare and American Farmers from Sequester Cuts Act (S. 610), providing a one-year increase (through December 31, 2022) of 3 percent, resulting in the overall conversion factor being cut to 0.75 percent for the current year (versus the 3.75 percent that would have otherwise occurred).
The third change in reimbursement relates to the sunsetting of the moratorium of the 2 percent sequestration, which had been phased out because of the pandemic and stakeholder advocacy. This payment reduction impacts all Medicare payments (not just Part B payments) and will be phased back in this year. There will be no sequestration reduction through March 31, 2022; however, from April 1 to June 30, 2022, the sequestration reduction will be 1 percent. Beginning July 1, 2022, the sequestration reduction goes back to its pre-pandemic level of 2 percent.
While all these changes are new, there is a historic decrease to Medicare Part B therapy reimbursement, which went into effect January 1, 2011, known as the multiple procedure payment reduction (MPPR). This resulted in a 50 percent reduction to the practice expense (PE) portion of the payment when a second procedure or unit is provided to a patient in the same visit for the same type of therapy.
The issue for SNFs that provide these very necessary services, which keep their residents at their highest level of possible function, is whether their costs are in alignment with the reduced reimbursement.
Understanding the methodology and all the calculations as they pertain to contract therapy is complicated. If you would like to discuss this issue, contact an advisor or submit the Contact Us form below.