Yesterday, August 3, 2020, CMS issued its 2021 Medicare Physician Fee Schedule proposed rule. Below is a high-level overview of the estimated combined impact to PT (and OT and SLP) reimbursement in 2021:

Estimated impact to PT/OT reimbursement in 2021

In the 2021 PFS proposed rule, CMS advances the policy discussed in 2020 PFS rulemaking to increase the values of the Current Procedural Terminology (CPT®) office/outpatient evaluation and management codes and adopt the GPC1X add-on code beginning January 1, 2021.

Despite APTA’s persistent advocacy both with HHS/CMS and Congress, to accommodate these increases and maintain budget neutrality, providers with low utilization of E/M services and providers who do not bill office/outpatient E/M codes, CMS is proposing reimbursement reductions for physical therapy and dozens other provider specialties beginning January 1, 2021 under the Medicare Physician Fee Schedule.

Within the proposed rule, CMS is proposing to increase the work RVUs for physical therapy evaluations (97161-97163), from 1.2 to 1.54 and the physical therapy re-evaluation (97164) from 0.75 to 0.96 (Table 21). However, as illustrated in Table 90 in the proposed rule, the combined impact of the reduction slated for physical therapy, occupational therapy, and speech-language pathology services in 2021 is  -9%.The reduction is being implemented through application of the budget neutrality adjustment to the conversion factor to satisfy the budget neutrality requirements of 1848(c)(2)(B)(ii) of the Social Security Act.

In the proposed rule, CMS states that “the most widespread specialty impacts of the RVU changes are related to the changes to RVUs for specific services resulting from the misvalued code initiative, including RVUs for new and revised codes. The estimated impacts for some specialties, including endocrinology, rheumatology, family practice, and hematology/oncology reflect increases relative to other physician specialties. These increases can largely be attributed to previously finalized policies for increases in valuation for office/outpatient E/M visits which constitute nearly 20 percent of total spending under the PFS. These increases are also due to proposed increases in value for particular services following the recommendations from the American Medical Association (AMA)’s Relative Value Scale Update Committee (RUC) and CMS review, increased payments as a result of finalized updates to supply and equipment pricing, and the continuing implementation of the adjustment to indirect PE allocation for some office-based services.”

While we have no issue with CMS’ efforts to correctly value the office/outpatient E/M codes, we are not certain of the policy goal that CMS desires to achieve by reducing payment to physical therapists, who have been subject to multiple payment reductions since 2011, and dozens of other provider specialties – the majority of whom are not eligible to bill Medicare for CPT E/M codes.

Immediate Next Steps

Staff are continuing to review the rule and will publish a comprehensive summary of the proposed rule in the coming days. APTA will be meeting later today with the broader coalition comprised of 50+ associations representing both physician and nonphysician organizations, as well as institutional therapy providers, to discuss both regulatory and legislative strategy and messaging.

We will have template letters for members, non-members, and patients to use to submit comments to CMS in response to the proposed rule in the coming days.

APTA continues to pursue legislative options that would delay or mitigate the proposed fee schedule rule.  For the past several months, APTA has been working with a broad coalition of health care provider groups that includes the American Medical Association (AMA), the American College of Surgeons, and 53 other groups on legislation to address the fee schedule. We anticipate legislation will be introduced in the near future by Rep. Ami Bera (D-CA) and Rep. Larry Bucshon (R-IN) (both physicians) that will address the fee schedule proposed cuts. In addition, we are working with Rep. Bobby Rush on a proposal that would delay implementation of the cuts for two years for possible inclusion in the current COVID Phase 4 package that is being debated Congress. Finally, we will continue to support H.R. 7154, the Outpatient Therapy Modernization and Stabilization Act, that includes language (section 2) that would waive budget neutrality on the E/M code proposal, thus preventing the cuts from going into effect.


Thank you for your continued advocacy and support.  Please stayed tuned for additional details and action alerts.