PTPN Insights

Changes in Medicare for rehabilitation therapists in 2013.

January 7th, 2013 |

Changes in Medicare for rehabilitation therapists in 2013.A new year brings new legislation that affects therapists, in particular how they will be reimbursed for Medicare patients. Here are a few things that private practice therapists need to be aware of as they open their clinic doors in 2013.

Note: To learn more about how to incorporate the changes described below into your practice, attend our two-part webinar, “What You Need to Know About Medicare: 2013 Edition,” on January 15 and 17. To request more information or to register, contact Ruben Marroquin at

Reimbursement update: The American Taxpayer Relief Act of 2012

While Americans were focusing on relief from the fiscal cliff over the last few weeks, the bill that President Obama signed on January 2 also incorporated important elements that affect rehabilitation therapists.

  • The good news: The legislation holds Medicare rates at 2012 levels, averting the planned 27% cut that would have happened without Congressional action, and it extends the therapy cap exception process through December 31, 2013.

  • The bad news: The bill increased the MPPR (Multiple Procedure Payment Reduction) from 20% to 50%. According to PTPN Vice President Nancy Rothenberg, “this will lead to about a 6% to 8% decrease in Medicare reimbursement for private practice, all other things being equal.”

The MPPR increase does not take effect until April 1, 2013. PTPN will continue to oppose its implementation, but the more legislators hear from constituents, the better, so we encourage you to add your voice to the effort. To learn more about these changes, or to learn how to contact your representatives, visit the PTPN Political Action Center.

Value-based purchasing

Continuing its push toward the triple aim of better health, better care and lower costs (as it did with the creation of ACOs), the Centers for Medicare and Medicaid Services (CMS) is further implementing value-based purchasing (VBP) in 2013. Jerry Connolly, PTPN’s lobbyist in Washington, D.C., says that the program “rewards providers who deliver better outcomes in health and healthcare for the beneficiaries and communities they serve at lower cost.” However, he notes that unlike the voluntary status of ACOs, value-based purchasing currently applies — or will in the not-too-distant future — to nearly all providers.

CMS has created a variety of programs to measure improvement in these areas, but two in particular affect therapists: the Physician Quality Reporting System (PQRS) and Claims-Based Data Collection for Therapy Services on Functional Limitation.

Physician Quality Reporting System (PQRS)

While PQRS has been around as a voluntary program since 2007, it will be required for all Medicare participants by 2015. Nancy points out that in 2013, Medicare will pay a bonus for participation of 0.5% of total allowed charges for covered Medicare services. However, she notes, “beginning in 2015, there will be a 1.5% penalty on all Medicare billings if you don’t participate in PQRS in 2013. So if you don’t participate this year, you will be penalized in 2015.”

There are two ways to report for PQRS:

  • Claims-based reporting. To earn the bonus payment, therapists must report on measures for 50% of their eligible patients. No sign-up is required for claims-based reporting on individual measures; you can simply start billing and documenting as appropriate. However, only practices which bill with the CMS 1500 format are eligible for the program (Medicare Part B).

  • Registry-based reporting. To earn the bonus payment, therapists must report on measures for 80% of their eligible patients. There are seven registry-based individual measures for PT and OT that can be done through FOTO by participating in the PTPN Outcomes Program and signing up with FOTO to use them as a registry.

In either case, most practices need to report on at least three measures, from January 1, 2013 through December 31, 2013, to successfully participate in PQRS. There are several that are applicable to PT, in particular measuring pain assessment, analyzing fall risk, creating a fall risk plan of care, and completing outcomes assessments such as those in the PTPN Outcomes Program.

Mitch Kaye, Director of Quality Assurance for PTPN, says, “In practice, if you have 100 patients for whom one or more measures are applicable during the year, then you must use the measures on 50 of those patients for claims-based reporting, or 80 for registry-based reporting. So if you decide to participate in the program, I recommend using it with all Medicare patients to make sure you hit your target.”

In order to document and report properly on your claims, get familiar with the CMS PQRS information, available on the CMS website. In addition, PTPN and PTPN Nexus members can download PQRS information from our Practice Management page, available by logging in to the members-only section of our website at

Functional Limitation Reporting

CMS is requiring that new G codes and modifiers on functional limitation for outpatient physical, occupational and speech therapy be submitted on Medicare claims as of July 1, 2013, with a testing period for providers that began on January 1. In other words, Nancy says, “therapists can start submitting any time between January 1 and June 30 this year, but they must be submitting these codes on claims as of July 1, 2013, or they will be denied.”

Mitch notes that the G codes in question will be used to identify what type of functional limitation is reported on the current status, projected goal status or discharge status. Modifiers will indicate the severity or complexity of the functional limitation being tracked. He adds, “The difference between the reported functional status at the start of therapy and projected goal status represents any progress the therapist anticipates the patient will make.” You can download a full list of the new G codes from the CMS website.

Therapists may use any valid and reliable measurement/assessment tool to quantify functional limitations; in fact, CMS specifically mentions FOTO, the software that powers the PTPN Outcomes Program, as one such tool. While CMS will offer resources to therapists to help them navigate these new requirements, they also say it will be incumbent upon individual therapists to learn how to translate scores from such tools.

Mitch points out that documentation of the information used for reporting under this system must be included in the patient’s medical records. He adds, “In medical records, the therapist will need to track the G codes and corresponding severity/complexity modifiers, as well as what method was used to arrive at the severity modifiers.”

These changes reflect a shift to a culture of shared accountability for patient and community outcomes and costs, according to Jerry. He says, “VBP programs are a step in the transition from a fee-for-service health system to one that is fully accountable for these outcomes, one based more on value than volume.”

The constant changes in Medicare billing and incentives can get confusing. To learn more about how to incorporate these programs into your own practice, attend our two-part webinar, “What You Need to Know About Medicare: 2013 Edition,” on January 15 and 17. To request more information, or if you missed it, contact Ruben Marroquin at You can also download our registration packet here.

PTPN and PTPN Nexus members may also access a summary of Medicare’s 2013 changes from our Practice Management page, available by logging in to the members-only section of our website at

Printable version.

For further reading:

Centers for Medicare and Medicaid Services.


VanLare, Jordan M. and Patrick H. Conway. Value-based purchasing — National programs to move from volume to value. New England Journal of Medicine, July 26, 2012.