5 Ways To Deal With The 2011 CMS Payment Cuts

The APTA released a highlights document for the 2011 Medicare Physician Fee schedule released Friday, June 25 and I studied the 17 page document to bring you this summary.

In addition to the projected reductions due to the SGR, CMS also proposes a multiple procedure payment reduction policy (MPPR) that would result in significant reductions in payment for outpatient therapy services. Specifically, CMS proposes to make full payment for the therapy service or unit with the highest practice expense value and payment of 50% of the practice expense component for the second and subsequent procedures or units of the service furnished during the same day for the same patient.

What is their rationale?

CMS’s rationale for this policy is their claim that therapy services are misvalued for physician fee schedule payment when multiple services are furnished to a patient in a single session because duplicate clinical labor and suppliers are included in the PE of the services furnished. They also express concerns about increased utilization of outpatient therapy services.

It is estimated that if the multiple procedure payment reduction policy were implemented, payment for outpatient therapy services to settings inside the PFS (i.e. physical therapist private practices and physician offices) would be reduced by approximately 12% in 2011 in addition to the projected SGR payment cut for CY 2011.

Because providers in settings outside the PFS (i.e. outpatient hospitals, skilled nursing facilities (Part B), CORFs, rehabilitation agencies) are also paid using the PFS payment rates and policies for physical therapy services, CMS estimates that this proposal would reduce (not redistribute) payments in those settings for therapy services by approximately 13 percent in CY 2011.

The APTA’s Position

“APTA is gravely concerned with the magnitude of these proposed reductions in payment, and believes that CMS’s proposal to apply the multiple procedure payment reduction to outpatient therapy services is based on flawed presumptions and has no justification. APTA will aggressively work to stop implementation of the proposed MPPR policy and the SGR payment reductions.”

The Writing is on the Wall

Even if this initiative gets delayed, the bigger picture is evident. These reimbursement cuts are simply the precursor of a major shift that is inevitable.

We are trained to be viable practitioners, and now is the time to learn the skills to become viable practice owners. The time has come for us to learn the intrinsic skills necessary to market a practice and build business systems that can weather the economy and the cuts imposed on us by CMS or private insurers.

One way or another, reimbursements are going to decline. What we need is

  1. Business systems to empower our clinical skills
  2. Retention systems to increase the number of patient visits
  3. Incentives for staff to perform better
  4. Strategies to appeal to referral sources and build multiple sources of referrals
  5. Access to some of the TOP physical therapists in the country, who can teach us HOW to stand out and thrive, not just survive.

I Have a Plan

I am speaking with 6 of the MOST entrepreneurial physical therapists and we are working on a top secret project (will fill you in on this later)

In the meantime, ask yourself:

“What can I offer to the community that allows me to stand out as a service provider immediately, allowing me to differentiate myself from other providers?”

An honest answer will reveal your strengths and weaknesses, preferences and desires as a practitioner. The answer will also allow you to create a plan of action that will allow you to survive any of the storms that are heading our way.




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