Payor Contracting

Understanding the CY 2024 Medicare Physician Fee Schedule: The Impact on Physical Therapy

Browse All Blogs

Blog Contents

The Centers for Medicare & Medicaid Services (CMS) has recently rolled out its 2024 Medicare physician fee schedule (PFS) proposal. While showing some positive direction, the proposed fee schedule also has areas of concern. APTA, or the American Physical Therapy Association, has taken the initiative to highlight and comment on the significant aspects of this proposed fee schedule, emphasizing its implications for physical therapists (PTs), physical therapist assistants (PTAs), and their patients under Medicare Part B. Here’s a quick summary of these changes for physical therapy in the upcoming calendar year and how PayrHealth can help.

Benefits of the new Centers for Medicare & Medicaid Services (CMS) physician fee schedule

The proposed 2024 Medicare physician fee schedule has some promising aspects for PTs, PTAs, and their patients. However, as always, there’s room for improvement. APTA’s feedback aims to guide the proposal towards better outcomes for the profession and those under their care. Here are a few ways providers can benefit from these fee schedule changes in the upcoming calendar year.

Greater Independence for PTAs

The CMS has suggested removing the stringent supervision requirements for PTAs in private practice settings. These are the only settings where PTAs require 100% direct supervision. APTA has supported the proposed rule, suggesting that general supervision allows PTAs to utilize their training while fully ensuring patient safety during appointments such as a management visit.

Extension of Telehealth Services

Several telehealth-related provisions for PTs and PTAs are proposed to be extended until December 31, 2024, aligning with the Consolidated Appropriations Act of 2023. This proposed rule also corrects a prior oversight by including institutional settings in the list of places allowed to offer PT Medicare telehealth services. APTA has given this move a thumbs up while pushing for more clarity around telehealth service coding.

Training Codes for Caregivers

CMS has introduced billing codes to compensate physical therapists, occupational therapists, and other types of non-physician practitioners for training caregivers, especially when patients can’t be present for an in-person visit. APTA has supported this but emphasized the need for minimal administrative overhead and the possibility of using these codes through telehealth services as well as office visits.

First-Time MIPS Cost Measure for PTs

PTs may be able to participate in all merit-based incentive payment system (MIPS) categories in 2024, leveling the playing field with other providers. This would also mean PTs could engage in the MIPS Value Pathways program. While APTA supports the idea, they’ve expressed concerns about some measures that are only sometimes used.

The downside of the new Centers for Medicare & Medicaid Services (CMS) physician fee schedule

The proposed 2024 physician fee schedule continues the trend of payment reductions for physical therapists (PTs) and other healthcare providers under Medicare Part B – in fact, the CY 2024 proposed changes are the fourth year in a row where PTs will face payment cuts – most notably a 3.3% reduction in the conversion factor. This pattern highlights a pressing need for a complete overhaul of the existing payment policies system. APTA’s stance on this matter is crystal clear. The association pointedly remarks, “Despite the ongoing challenges like the pandemic and the opioid crisis, CMS hasn’t taken any significant steps to lessen the payment cuts.”

Drawing from the past decade’s payment data, APTA underscores the consistent financial pressure placed on PTs. Their findings, derived from two APTA surveys focusing on wages and hiring obstacles, show these continuous cuts’ adverse impact on the PT workforce, leading to decreased patient access to crucial care.

The association stresses the real-world implications, noting, “Many private practices are struggling. They can’t raise salaries because they’re always uncertain about future reimbursements.” This situation is pushing APTA to consider legislative measures, allowing PTs to opt out of Medicare and thus giving them the option to negotiate with patients directly.

Moreover, APTA emphasizes the bigger picture: the existing fee schedule system is fundamentally flawed. They’ve listed pivotal reforms they champion alongside organizations like the American Occupational Therapy Association and APTA Private Practice. However, APTA strongly objects to including physical therapists in the MIPS Promoting Interoperability category, arguing that it widens the divide between those with access to certified electronic health record technology and those without access (such as rural health clinics).

Gaps and ambiguities in the proposed rule changes

Like many proposed fee schedule rules, this one also has areas that could be more specific or more informed. APTA has highlighted several segments of the proposal that need more clarity. These include issues linked to remote therapeutic monitoring, the use of different telehealth point-of-service codes, and the potential exemptions from the Promoting Interoperability category of MIPS.C

Understanding the payment challenges for physical therapists

Payments for physical therapists, as with any healthcare provider, are a big deal. However, the current system makes it difficult for them to help patients. APTA’s ongoing goal is that, with some changes, therapists can get the reimbursement they deserve and patients can get the care they need.

The downside of current payments

One of the biggest struggles of PTs and their practices is the current payment system. CMS continues to cut payments to PT practices, putting strain on staff and reducing the quality of patient care. Despite APTA’s ongoing outspokenness against this challenge, PTs still struggle to get adequate payment for valuable services and see a decline in their conversion factor. For patients, this means changes to medical decision-making, a reduction in PT availability, and much more.

The impact on patients

For ten years, physical therapists have been getting less pay for their work. APTA continues to support this claim with data – which appears to continue trending into CY 2024. With many practices struggling to find resources to hire more PTs, patients are left waiting for essential care. This is a notably unsustainable approach toward such a specialized field.

APTA’s solution

APTA’s ideal solution to this system is a proposed rule where PTs and their practices can opt out of Medicare and instead determine prices directly with patients. These payment policies would significantly increase the revenue PTs have available and a substantive portion could go toward higher wages for PTs and PTAs, in turn providing more immediate availability for patients. Removing the requirement of appropriate use criteria may give PTs greater flexibility in the care they provide. APTA is also working with other groups to create a more favorable fee schedule and provide additional payment to PT practices.

The tech problem

CMS has also pushed for implementing special computer systems for their records. However, not all PT practices have access to these systems (partly because they can be a considerable practice expense), especially in areas that don’t have adequate access to internet or cellular data. In these cases, a substantial infrastructure investment is needed first. APTA maintains that this can put undue strain on clinics that serve a valuable purpose in these areas but don’t have the appropriate resources to align with CMS regulations. This only hurts patients in those areas relying on essential care.

Healthcare consulting for physical therapists with PayrHealth

Medicare’s plans are changing the ability to provide necessary patient care for physical therapy practices, as well as those providing mental health and behavioral health services, primary care, and much more. At PayrHealth, we have combined decades of healthcare industry experience and can help your practice achieve better success by negotiating more favorable contracts, optimizing your revenue cycle, and developing a long-term plan that fits your unique pain points. To learn more about how PayrHealth can help your practice grow and thrive, contact us through our online form today.

Frequently asked questions

What are the changes to the Appropriate Use Criteria (AUC) in diagnostic imaging?

The CMS physician fee schedule will delay implementation of the AUC for advanced diagnostic imaging, attempting to find a more sustainable solution for preventing inappropriate denials of necessary imaging under current AUC program regulations.

How does the 2024 Medicare physician fee schedule impact mental health services?

Like physical therapists, the 2024 Medicare physician fee schedule will both negatively and positively impact the field of mental health. Although it includes benefits like maintaining a focus on mental health telehealth services, caregiver training services, crisis services, and mental health visits, the APASI will call on CMS to expand psychological and neuropsychological testing, support for community-based organizations, and more. Most notably, 2024 will now allow marriage and family therapists as well as mental health counselors to be paid 75% of the PFS rate. Finally, addiction counselors such as those involved in opioid treatment programs will also be able to enroll.

How does the 2024 Medicare physician fee schedule impact split or shared billing?

The 2024 physician fee schedule will create difficulties for physician assistants and nurse practitioners who share billing with physicians. According to a previous ruling by the CMS, the billing practitioner includes whoever spends a “substantive portion” of the visit with the patient, requiring time tracking that can put an extra burden on already strained providers. AAPA has requested a better definition of “substantive portion” as well as including the name of all providers in billing, not just the practicing physician.

What is the conversion factor for CY 2024?

The Medicare physician fee schedule will see a conversion factor of $32.74, meaning a decrease of $1.15 (3.4%) over CY 2023.

What are the changes to the clinical laboratory fee schedule?

The 2024 physician fee schedule will update the data reporting period for clinical diagnostic laboratory tests (CDLTs). Specifically, for the data reporting period of January 1 through March 31, 2024, the data collection period is January 1 through June 30, 2019.

What are the changes to telehealth services included in the PFS?

The Medicare physician fee schedule will continue to add items to the Medicare telehealth services list including taking steps to allow direct supervision through video interactive telecommunications and audio-only telecommunications. Implemented during COVID-19, these changes significantly increased patient quality care in rural and underserved areas. It will also maintain continued coverage and payment of telehealth services until December 31, 2024.

It will also expand the scope of telehealth originating sites for services furnished using telehealth in virtually any location. Finally, it will also allow teaching physicians to utilize telehealth services to be present for key portions of residency training locations.

Payor Contracting

What is a Provider Contract?

View Blog Post
Payor Contracting

Different Types of Healthcare Provider Contracts

View Blog Post
Payor Contracting

A Guide to Payor Contracting for Providers

View Blog Post