Physical therapists once in such high-demand are facing massive layoffs across the industry.

Changes to reimbursement for skilled nursing facilities and physicians have a major impact on the future of physical therapists and occupational therapists.

Skilled Nursing Facilities

The news first hit the skilled nursing facilities (SNFs) as they prepared for the transition into a new payment model called Patient-Driven Payment Model (PDPM) that kicked-off October 1. Prior to PDPM, skilled nursing facilities were paid on a resource-utilization group (RUG) model, which reimbursed SNFs according to the number of therapy hours.

The former reimbursement model encouraged potentially unnecessary therapy services, CMS said. A “budget neutral” change includes a provision that group and concurrent therapy minutes can account for no more than 25% of the total services provided to the patient. The model’s 25% limit on group and concurrent therapy is meant to ensure SNF patients receive quality therapy services and that one-on-one sessions remain the “significant majority.”

Under PDPM, payment is determined by patients’ needs in five clinical components: nursing; physical therapy; occupational therapy; speech language pathology; and nontherapy ancillary, such as having cystic fibrosis or needing a feeding tube. A sixth component is the adjusted daily rate over the course of the patient’s stay.

SNFs are reporting layoffs and pay cuts.

Physician Fee Schedule Final Rule

On the heels of the PDPM announcement comes the final rule for the 2020 Physician Fee Schedule Quality Payment Program.

The final rule cuts payments to physical therapists by 8% starting in 2021. The rule also cuts payments for psychologists and social workers by 7% in 2021.

The final rule states:

Outpatient Physical Therapy and Occupational Therapy Services Furnished by Therapy Assistants

The Bipartisan Budget Act of 2018 requires payment for services furnished in whole or in part by a therapy assistant at 85 percent of the applicable Part B payment amount for the service effective January 1, 2022. In order to implement this payment reduction, the law requires us to establish a new modifier by January 1, 2019 and CMS details our plans to accomplish this in the final rule.

CMS is finalizing our proposal to establish two new modifiers – one for Physical Therapy Assistants (PTA) and another for Occupational Therapy Assistants (OTA) – when services are furnished in whole, or in part by a PTA or OTA. However, CMS is finalizing the new modifiers as “payment” rather than as “therapy” modifiers, based on comments from stakeholders.

These will be used alongside of the current PT and OT modifiers, instead of replacing them, which retains the use of the three existing therapy modifiers to report all PT, OT, and Speech Language Pathology services, that have been used since 1998 to track outpatient therapy services that were subject to the therapy caps. CMS is also finalizing a de minimis standard under which a service is furnished in whole or in part by a PTA or OTA when more than 10 percent of the service is furnished by the PTA or OTA, instead of the proposed definition that applied when a PTA or OTA furnished any minute of a therapeutic service. The new therapy modifiers for services furnished by PTAs and OTAs are not required on claims until January 1, 2020.

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