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2019 Medicare Physician Fee Schedule Final Rule

On Thursday, November 1st, the Centers for Medicare and Medicaid Services (CMS) released the 2019 Medicare Physician Fee Schedule Final Rule. The Rule finalized several items relevant to therapy services, including payment updates for services paid via the Fee Schedule, the 2019 therapy threshold amount, changes to the functional limitation reporting requirement, new modifiers for services provided by physical and occupational therapist assistants, and the Merit-based Incentive Payment System (MIPS).

Payment Update

For 2019, CMS finalized an overall Fee Schedule increase of approximately 0.14% (the 0.25% increase required by the Bipartisan Budget Act of 2018 combined with the required budget neutrality adjustment). The conversion factor for 2019 is 36.0391 for 2019, compared to 35.9996 for 2018. The impact of this payment update for the Fee Schedule affects all providers differently, based on the type and amount of services provided. For 2019, CMS estimates the impact on total allowed charge for physical and occupational therapy to be negative 1%.

Application of KX Modifier

Therapy providers must continue to append the KX modifier for services provided over the therapy “threshold” (no longer called a cap), indicating the services continue to be medically necessary. The Final Rule set this threshold amount at $2040 for PT/SLP combined and $2040 for OT in CY 2019. In addition, targeted manual medical review (MMR) will continue for services provided over $3000 for PT/ST combined, and $3000 for OT.

Therapist Assistant Modifiers

The Bipartisan Budget Act of 2018 directed the Secretary of Health and Human Services (HHS) to create modifiers signifying services were provided by a physical therapist assistant (PTA) or an occupational therapist assistant (OTA), and indicated that services provided “in whole or in part” by a therapist assistant would be reimbursed at 85% of the Fee Schedule rate beginning in 2022.

To comply with the requirements of the Bipartisan Budget Act, CMS has established two new modifiers to identify services provided by a PTA or OTA as clarified in the Final Rule. These modifiers will be required beginning 1/1/2020.

  • CQ: services provided in whole or in part by a PTA
  • CO: services provided in whole or in part by an OTA

These modifiers are described as “payment modifiers” and are to be appended in addition to the GP and GO modifiers, which signify services are being provided under a PT or OT plan of care, respectively – e.g., 97110GOCQ; 97535GOCO.

CMS also finalized a de minimis standard for defining services provided “in whole or in part” by an assistant (meaning a minimal standard or the minimum amount of service that constitutes “in part”). Under this standard, a service is considered furnished by a PTA or OTA when more than 10% of the service is rendered by the assistant. This means 1.5 minutes of a 15-minute unit of therapeutic exercise (CPT 97110) can be provided by a PTA without needing the CQ modifier (and hence, without the service being subject to the 15% reduction in 2022). If the PTA provides more than 1.5 minutes, the modifier must be added. CMS states they anticipate addressing the application of the modifiers and the 10% standard more specifically in CY 2020 rulemaking.

Functional Limitation Reporting

In the Final Rule, CMS affirmed that Functional Limitation Reporting will be going away for traditional Medicare Part B effective 1/1/2019. CMS will remove claim edits, remove regulatory language from the internet-only manuals (Benefit Policy Manual, Claims Processing Manual, etc.), and remove FLR as a condition of payment. CMS stated they will keep the HCPCS codes (i.e., the G codes) as “active” for CY 2019 to allow other payers who require FLR to make their own decision re: continuing/not continuing to collect this data and to avoid unnecessary claim rejections. (NOTE: Other payers may continue to require FLR in 2019. This ruling only applies to traditional Medicare Part B.)

Merit-based Incentive Payment System (MIPS)

The Merit-based Incentive Payment System, or MIPS, is a quality payment incentive program CMS developed for clinicians billing Medicare Part B via professional claims (i.e., CMS 1500/837p). Performance under MIPS is measured through data reported to CMS by eligible clinicians, either individually or as a group, in four categories:

  • 1. Quality
  • 2. Improvement Activities
  • 3. Promoting Interoperability
  • 4. Cost

Each category is scored separately, weighted, and combined to produce a total/final score. Based on this score, clinicians receive a payment adjustment (either positive or negative) based on their performance.

Under MIPS, clinicians are included if they are an eligible clinician type and meet the Low Volume Threshold. Clinicians are identified for MIPS by a unique TIN (Tax Identification Number) and NPI (National Provider Identifier) combination, if reporting as an individual clinician, or by the TIN, if reporting as a group.

As confirmed in the CY 2019 Final Rule, PTs, OTs, SLPs, clinical psychologists, dietitians, and audiologists have been added as eligible clinicians for the 2019 performance year (i.e., the 2021 payment year). PTs, OTs, and SLPs in private practice are considered eligible providers for participation in MIPS in 2019. Therapists providing outpatient/Medicare Part B services in a hospital, SNF, or other institutional setting are not eligible to participate.

For more information on MIPS, click here.

Click here for more information on the 2019 Medicare Physician Fee Schedule Final Rule.

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