Breaking News: Congress Reduces 9% Cut to Rehab Therapy Payments

Following two weeks of intense negotiations, Congress passed a 5,593-page tax and spending bill at 11:42 PM on Monday, December 21. Among other things, this legislation reduces the total impact of the Medicare specialty payment cuts in 2021 from 9% to 3.6% for outpatient PTs, OTs, and SLPs. 

According to the Alliance for Physical Therapy Quality and Innovation (APTQI), the $900 billion funding portion of the bill “includes provisions to delay reimbursement cuts and injects additional funding into the CY2021 Medicare Physician Fee Schedule (PFS), which would reduce cuts to physical therapy from 9% to a projected 3.6%. Further, the bill extends sequester relief for an additional three months.”

Earlier this month, CMS released its 2021 final rule, which solidified payment cuts for more than 30 healthcare specialties—including the 9% cut impacting rehab therapists. 

The bill also includes tax break extensions and other tax provisions amounting to roughly $150 billion, as well as $325 billion in business relief—including “$275 billion for another round of Paycheck Protection Program funding.”

Sources close to WebPT report that the net impact to rehab therapy payments is due to language in two separate sections of the bill:

• Division M provides for “a one-time, one-year increase in the Medicare physician fee schedule of 3.75 percent, in order to support physicians and other professionals in adjusting to changes in the Medicare physician fee schedule during 2021, and to provide relief during the COVID-19 public health emergency.” This section of the bill also finalizes “a three-month delay of the Medicare sequester payment reductions through March 31, 2021.” Finally, it creates “a second loan from the Paycheck Protection Program, called a ‘PPP second draw’ loan for smaller and harder-hit businesses, with a maximum amount of $2 million.”
• Division O places a moratorium “on payment under the Medicare physician fee schedule of the add-on code for inherently complex evaluation and management visits.” Specifically, this provision “prohibits the Secretary of the Department of Health and Human Services (HHS) from making payments under the Physician Fee Schedule for services described by Healthcare Common Procedure Coding System (HCPCS) code G2211 (or any successor or substantially similar code) prior to January 1, 2024.” This, in turn, frees up reimbursement dollars for other services—including those provided by rehab therapists.

You can read the full text of the bill. The bill has been sent to President Trump for signature.

UPDATE: As of January 5, this source reports that "CMS revised the 2021 conversion factor that determines Part B fees to $34.89 -- a nearly 8% increase from the $32.41 rate that the agency had previously approved in the final 2021 Medicare physician fee schedule in December." This revision means the net reduction to rehab therapy payments in 2021 would be closer to 3%.