What does a 9% CPT code revenue reduction mean?

Tomorrow, the 18th of December, 2020, we will find out if rehab gets a 9% rate reduction for CPT codes (essentially Part B therapy) OR do we “kick the can down the road” for 2 years. This brings up a number of good questions we could spend hours pontificating over a bottle of good wine (or two):

What does this mean for Therapy?

Rate cuts most likely, but who will be first to cut?

  • Those have Private Equity or Venture Capitalist involvement

  • Those that are publicly traded

  • Those that are already have margins that are low

  • Those that have Medicare Part B as a large percentage of their revenue stream. Outpatient clinics are 100% Med B, so they may also see rate cuts quickly.

What does this mean for patients?

I don’t see any scenario where a rate cut helps any nursing home resident. Minutes could be reduced and the pay of therapy staff will almost certainly be reduced which won’t exactly help with morale. Given we are still in the middle of a global pandemic, it’s just seems cruel, but here we are.

Other than rate cuts for therapists, what else may occur?

Therapy companies/employers may cut costs other ways:

  • They could decrease benefits like PTO, Healthcare contributions, 401K contributions, etc.

  • They could (believe it or not) cut Medicare Part A minutes again….  Many therapy companies make little margin on Part A services so cutting labor minutes and still getting the revenue is something you may see.  Personally, I still think this approach is deplorable!

I’m not saying Broad River Rehab will do any of these things, but rate cuts present us with harsh realities. It’s essentially the government saying “We don’t value what you do as much.” Tough decisions have to be made when that happens.

AND REMEMBER: we also have a 15% CPT rate cut for assistants doing part B looming in 2022.

Don’t misunderstand, I am still optimistic about the future of therapy and I strongly believe in the mission of helping people recover from injuries and surgery AND slow the functional declines that come with aging. It would just be nice if we operated in a business environment that was stable and consistently valued our mission.