Five Takeaways From the Medicare Physician Fee Schedule—MIPS, Therapy Modifiers and More

Outpatient therapy providers had to digest significant news this month when the Centers for Medicare & Medicaid Services (CMS) released its Proposed Medicare Physician Fee Schedule for Calendar Year 2019. The policy, payment and quality provisions in the proposed rule include a number of changes that reflect CMS’ efforts to move toward value-based care.

We’ve summarized the key takeaways and what therapy providers should be thinking about as they prepare for these possible changes.

1 – Therapists enter the age of value-based payments with MIPS

Established under the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) as part of the Quality Payment Program, the Medicare Merit-Based Incentive Payment System (MIPS) rewards clinicians based on the value of services they provide. Under MIPS, eligible physicians and other clinicians earn a positive, neutral or negative payment adjustment on their Medicare Part B reimbursements based on how they perform in four categories: quality, promoting interoperability (formerly called Advancing Care Information), improvement activities and cost.

Previously excluded from MIPS, the proposed rule has added physical therapists (PT) and occupational therapists (OT) to the list of eligible clinicians starting in 2019. Speech therapists (SLP) were not included due to the proposed elimination of several applicable quality measures. (CMS recommends a minimum of six quality measures per discipline to ensure adequate tracking.) This could potentially change, however, depending on what is finalized in the rule.

Who’s eligible? CMS clarifies this in the proposed rule. If clinicians do not meet at least one of the following criteria, they are not required to participate in MIPS. For year three of MIPS, the 2021 payment year (the first year impacting eligible PTs and OTs) proposed threshold is set at:

• Those who have allowed charges for covered professional services that are $90,000 or greater, or
• Those who provide covered professional services to a minimum of 200 Part B beneficiaries, or
• Those who provide a minimum of 200 covered professional services to Part B beneficiaries

The third criterion of  a minimum of 200 covered professional services is a new threshold that CMS added to the proposed rule to ensure that more therapists will be able to participate and benefit from MIPS-based incentives.

That said, it’s important to remember that MIPS is not just about incentives, it’s about ensuring the focus remains squarely on patient care. If providers can’t demonstrate performance improvements, they will be subject to a loss of reimbursement. It will be absolutely critical to not only determine your eligibility, but also what you need to do to ensure you’re able to track and measure performance ahead of reporting deadlines for the performance period.

2 -New therapy modifiers will push providers to carefully evaluate their therapy mix

The Bipartisan Budget Act of 2018 established a payment differential between therapy assistants and therapists. Under the Act, services provided by PT and OT assistants are to be paid at 85% of the rate paid for PT and OT services. The rate will be calculated based on the current rate PT/OT services will be reimbursed for starting in 2020, with the fee schedule taking effect in 2022. (It’s worth noting that the reduced payment for services provided by assistants is not applicable to outpatient therapy services provided in critical access hospitals.)

Although many in the industry have opposed the payment differential, any suggested alternatives to eliminate, reduce or delay the reduction have been rejected. CMS continues to move forward and has proposed the establishment of two new therapy modifiers that will identify when services are provided in whole or in part by a PTA or OTA. Required on claims starting in 2020, the new therapy modifiers as they are currently proposed will replace the existing GP and GO modifiers whenever the service is provided by a PTA or OTA.

Whatever your views on the subject, this will significantly change how outpatient therapy providers will need to evaluate their staffing ratios when scheduling care and managing costs. Ultimately, success will come down to ensuring that the appropriate therapist or assistant is providing the right level of care at the right time for each patient.

3 – Greater use of data analytics will be needed to ensure success

Lowering costs while demonstrating improved outcomes in the age of MIPS will require greater oversight at every stage—from the moment a patient is referred and evaluated to ensuring the right mix of therapists and treatments are applied throughout the course of care.

With the proper level of visibility, outpatient therapy providers will be hard-pressed to meet the demands of value-based care. They will need to leverage new business intelligence tools and dashboards that provide real-time insight into key performance metrics, such as therapist productivity and patient outcomes, so they can be more proactive about managing growth in each performance period.

Therapy software vendors will play a key role in this process, particularly around specific MIPS-related tracking and reporting. Talk to your software vendor to find out what their plans are for the transition.

4 – Less documentation means more time saved, greater focus on quality

CMS has proposed discontinuing functional limitation reporting (FLR) starting in January 2019. This is welcome news as FLR reporting has been widely viewed as burdensome and duplicative of information that was already provided in patient documentation. CMS notes in the proposed rule that the reporting was originally intended to help determine payment related to the therapy caps. But with the caps removed, there is less incentive to continue with it.

Excessive time spent on documentation is an ongoing issue for many outpatient therapy providers, even outside of FLR reporting. So, it goes without saying that any regulatory changes that ease the burden of unnecessary work and streamline documentation will reduce the potential for errors, minimize frustration and give therapists back much needed time to focus on providing quality patient care.

5 – Outpatient therapy providers will have greater leeway to treat medically complex patients

 CMS will continue the use of the KX modifier for therapy services that exceed the threshold of $2,010 for PT/SLP services combined and $2,010 for OT. By applying the KX modifier to a claim, the therapist or therapy provider is confirming that the services are medically necessary. Once the claim goes above $3,000, it will be subject to a target medical review (MR). CMS notes in the proposed rule that “not all claims exceeding the MR threshold amount are subject to review as they once were.”

What this means in practical terms, according to APTA, is that “only a percentage of providers who meet certain criteria will be targeted, such as those who have had a high claims denial percentage or have aberrant billing patterns compared with their peers.”

The takeaway from this proposed rule is that while CMS is intent on preventing excessive therapy services–the repeal of the therapy cap along with the targeted medical review process should give outpatient therapy providers more leeway to provide therapy services as needed, within reason and without excessive scrutiny.

This is good news when you consider the data. An analysis commissioned by the American Occupational Therapy Association found that nearly 6 million Medicare beneficiaries used outpatient therapy services in 2015, and of these, nearly 1 million surpassed the PT/SLP cap threshold while nearly one-quarter million surpassed the OT cap threshold.

Outpatient therapy providers will be empowered to support an aging population with more clinically complex needs. That said, it doesn’t make therapists or outpatient therapy providers exempt from following the guidelines. Ultimately, it’s about making sure you’re providing the appropriate level of care to the people who need it—and balancing it with the cost of providing that care to ensure optimal financial and functional outcomes.

 Looking ahead

 With MIPS and other therapy changes on the horizon, including the proposed Patient-Driven Payment Model (PDPM), CMS has made it abundantly clear that providers in the post-acute care continuum are going to be held to a higher standard—one that ties payment and/or rewards based on the needs of the patient, not volume. While more therapy services may be appropriate in certain cases, overall, the changes underway will force therapy providers to start taking a more outcomes-based, data-driven approach to how they manage and deliver care.

CMS is accepting comments on the proposed Medicare Physician Fee Schedule until September 10, 2018. We’ll also continue to keep you updated on the changes as they become available.