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TRICARE Changes and 2018 Medicare Payment Updates

By Rick Gawenda*

On December 12, 2017, President Trump signed HR 2810, the National Defense Authorization Act (NDAA) for fiscal year 2018, into law. One important piece of legislation included in the NDAA directs the Secretary of Defense (SOD) to add physical therapist assistants (PTAs) and occupational therapy assistants (OTAs) to the TRICARE program as an eligible provider of therapy services.1

Even though the NDAA is now law, the SOD must still make the change to add PTAs and OTAs as eligible providers of therapy services. The SOD must also establish, in regulations, requirements for the supervision of PTAs and OTAs. Until this is completed, PTAs and OTAs are still unable to treat TRICARE beneficiaries and bill for those services.

Watch for updates from the American Physical Therapy Association (APTA) and the Private Practice Section regarding TRICARE and the use of physical therapist assistants.

For those of you who provide outpatient therapy services to Medicare beneficiaries, many of you will see a decrease in your payments in 2018 compared to 2017 due to a reduction in payment of the most commonly billed current procedural terminology (CPT) codes to the Medicare program. However, several CPT codes that perhaps you should have been billing all these years will see an increase in their payment rate in 2018 compared to 2017.

This change in payment is due to changes in the work relative value unit (RVU) and practice expense (PE) RVU of the CPT codes. The work RVU component accounts for an average of 51 percent of the total relative value for each service and takes into account the relative level of time, skill, training, and intensity to provide the service as well as the required mental effort and judgment and stress due to the potential risk to the patient.2

The PE RVU component accounts for an average of 45 percent of the total relative value for each service.2 The PE RVU component takes into account the cost of running a practice such as mortgage or rent payment, office supplies, equipment, and nonphysician staff costs.3

I won’t bore you with the details of the actual work and PE relative value units (RVUs) of the most commonly billed CPT codes under a physical therapy plan of care for 2018 compared to 2017. What I will provide you with are the payment changes in the most commonly billed CPT codes under a physical therapy plan of care for 2018 compared to 2017.

Payment for each CPT code will vary depending on your payment locality due to the geographic price cost index (GPCI). The Medicare program to adjust payment rates to take into account regional and practice-specific factors uses the GPCI.

In calendar year 2018, there are 112 different payment localities. For the purpose of this article, I will use Los Angeles County to show the pay differences in 2018 compared to 2017 on the most commonly billed CPT code under a Medicare Part B physical therapy plan of care.

As you can see from chart 1, the two most common therapeutic procedure codes that are billed by the physical therapy profession (97110—therapeutic exercise and 97140—manual therapy) are taking a significant payment reduction in 2018 compared to 2017. For a provider in Los Angeles County that bills 2 units of 97110 and 2 units of 97140 during a treatment session in 2018, they will see an $8.70 reduction in their 2018 payment based on the allowed amount prior to the application of the multiple procedure payment reduction (MPPR) policy and 2 percent government sequestration reduction.

On the other hand, CPT codes 97112 (neuromuscular reeducation) and 97530 (therapeutic activities) are seeing an increase in their payment rate in 2018 compared to 2017. I have found in several instances that physical therapists and physical therapist assistants tend to “lump” all of their treatment interventions under CPT code 97110, when in actuality they are providing interventions that should have been billed using CPT code 97112 and/or 97530.

With that said, you never bill a CPT code(s) simply because it has a higher payment rate. You bill the CPT code that best describes what you provided and what is supported by the documentation in the patient’s medical record. I strongly encourage you to review the description for each CPT code directly from the 2018 CPT Code book.

To access the Medicare Physician Fee Schedule (MPFS) on the Centers for Medicare & Medicaid Services website, go to www.cms.gov/apps/physician-fee-schedule/search/search-criteria.aspx.
In addition, each Medicare Administrative Contractor will have the MPFS on their website for the states they serve.

Lastly, the APTA has an MPFS calculator on their website for APTA members that takes into account the 50 percent MPPR policy and the 2 percent sequestration cut on Medicare payments and allows members to compare their 2018 payment rate(s) to their 2017 payment rate(s) for any CPT code(s) they want to look up. The APTA MPFS calculator will also have the work and PE RVUs as well as the malpractice RVU for each CPT code. To access the APTA MPFS calculator, go to http://aptaapps.apta.org/feecalculator/default.aspx.

* The author has a vested interest in the subject of this article.

REFERENCES

1. HR 2810, National Defense Authorization Act for Fiscal Year 2018, Title 7 – Health Care Provisions, Subtitle B – Health Care Administration, Section 721, Authorization of physical therapist assistants and occupational therapy assistants to provide services under the TRICARE program. www.congress.gov/115/bills/hr2810/BILLS-115hr2810enr.pdf. Accessed online on January 2, 2018.

2. American Medical Association, RBRVS Overview. www.ama-assn.org/rbrvs-overview#Practice%20Expense%20Component. Accessed online on January 2, 2018.

3. MLN Fact Sheet, Medicare Physician Fee Schedule, February 2017. www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/downloads/MedcrephysFeeSchedfctsht.pdf. Accessed online on January 2, 2018.

Rick Gawenda is the president of Gawenda Seminars & Consulting and a member of the PPS Payment Policy Committee. He can be reached at info@gawendaseminars.com.