The first Medicare EOB’s for services performed in April 2013 are just now being sent and what they show is a major reduction in pay for physical medicine codes. Physical therapists and occupational therapists will see a reduction of 8% to 14% in the allowed amount for their services to Medicare patients. The sequestration is only a small portion of this reduction; it is a reduction of 2% of the amount that Medicare pays the provider after assessing the patient’s deductible or co-insurance.

The American Taxpayer Relief Act of 2012 changed the MPPR from a 20% reduction in the practice expense (PE) portion of the payment, in effect since January 1, 2011, to a 50% reduction effective for dates of service beginning April 1, 2013. The MPPR is applied when more than 1 unit of therapy services are performed on a Medicare patient on the same day. Medicare will allow the full payment for the service with the highest PE then will reduce the rest of the charges PE portion by 50%.

In comparing Medicare EOB’s for services in March 2013 to Medicare EOB’s for services in April 2013 we are seeing a reduction of 7% to 13% in the amount a therapist will receive for the same services provided to the same patient. The more services that are performed on a specific date on the same patient, the higher the reduction will be. If you only perform 2 units on a patient each day you will see a reduction of about 8%, but if you are performing 4 or more services you could see a reduction up to 14% or more.

Medicare, Sequestration and MPPR News

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Therapists are taking consistent hits in the amount they are paid for their services. We at Superior Medical Billing Solutions specialize in helping therapists to maximize their reimbursement by advising on how to code correctly, analyzing payer contracts and reimbursement trends and claim follow up to insure timely payment for services rendered.

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