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FAQ: 2013 Medicare Physician Fee Schedule and MPPR

Physician Fee Schedule and MPPR

This FAQ resource was developed on January 2, 2013.

Did Congress take action to stop the 26.5% payment cuts under the physician fee schedule that were scheduled to go into effect on January 1, 2013?
Yes. Congress passed the American Taxpayer Relief Act of 2012 (HR 8) on January 1, 2013, that freezes the Medicare conversion factor for 2013 at the 2012 level, averting a 26.5% cut to physical therapists and other providers under the physician fee schedule and continues the 1.0 GPCI work value floor through 2013.

Where can I go to find out information on payment rates for 2013 under the physician fee schedule?
APTA has a fee schedule calculator and MPPR calculator on its website.

Did Congress include new provisions in the legislation that increased the Multiple Procedure Payment Reduction?
Yes. Congress included a provision in the American Taxpayer Relief Act of 2012 (HR 8) that applies a 50% multiple procedure payment reduction to outpatient therapy services effective April 1, 2013. This is an increase from the 20% MPPR reduction that applied for office settings and 25% MPPR reduction that applied for facilities in 2012. Despite APTA’s efforts, this provision was included in the final legislation in order to find $1.8 billion in savings to help pay for the larger package including a one year extension of the Medicare therapy cap exceptions process as well as a preventative measure to prevent the 26.5% reductions in provider payments under the Medicare Physician Fee Schedule.

What is the impact of the 50% MPPR reduction on my payment rates for 2013?
APTA estimates the application of a 50% MPPR policy will reduce current payments by approximately 6-7% in aggregate for outpatient therapy services. This reduction will be partially offset by a 4% increase in practice expense that resulted from CMS’s use of new survey data of practice expenses conducted by APTA. The impact of the MPPR reduction on individual practices and facilities will vary depending on the CPT codes billed and the typical duration of the therapy sessions. To determine the impact on your practice, refer to APTA’s MPPR calculator, which can be used to determine payment rates for 2012 and 2013.

What is the Multiple Procedure Payment Reduction?
From January 1, 2013-March 30, 2013, the multiple procedure payment reduction (MPPR) policy applies a 20% or 25% payment reduction to the practice expense value of approximately 44 CPT codes deemed “always therapy services.” The 20% reduction is applicable to physicians and physical therapists in private practice and 25% reduction is applicable to other settings that bill for Part B services including CORFs, SNFs (Part B), home health (Part B), outpatient hospitals, and rehabilitation agencies.

Effective April 1, 2013, the multiple procedure payment reduction that applies to the practice expense will increase from the 20 or 25% to become 50% for all outpatient therapy settings. For the second and each subsequent code, the practice expense value will be reduced.

This means that the code with the highest practice expense value that day will be reimbursed at 100% and the practice expense values for the second and subsequent codes will be reduced when multiple therapy services are billed on the same date by the same practitioner or facility under the same NPI, regardless of whether those therapy services are furnished in separate sessions. The reduction applies across disciplines (occupational therapy and speech language pathology). The work and malpractice components of the therapy service payment would not be reduced. Because clinicians who deliver therapy services typically deliver a variety of services as represented by the CPT codes, there are numerous potential code combinations that, when executed, determine the total reimbursement for services in a given day.

What rates should I charge?
It is important to establish fee schedule charges that are representative of your costs and would be applicable to all your patients regardless of payer. It is appropriate to establish charges that are above the Medicare fee schedule amount. Be aware that Medicare pays the lower of submitted charges and the Medicare fee schedule amount.

What is APTA doing to prevent the MPPR 50% reduction from becoming effective on April 1, 2013?
We are deeply disappointed to see the last minute inclusion of a 50% Multiple Procedure Payment Reduction (MPPR) in the end of year package passed on January 1. Over the last several months APTA staff has met with committee staff, leadership and almost all members of the key committees of jurisdiction on multiple occasions. At each of those meetings, our strong opposition to MPPR was discussed based on the flaws in the policy and the impact this would have on providers as well as the patients they serve. APTA government affairs staff is already strategizing options to advocate aggressively to prevent implementation of these cuts by April 1.

Source: APTA

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