Once again, our federal government has been hard at work adding complexity with no visible benefit to our broken fee for service payment process.  Before talking about the details, let’s see if we can relate these upcoming CPT code changes for physical and occupational therapy with a story about a mythical factory.

The Imaginary Widget Factory

Imagine you are employed by a factory as a skilled craftsman making widgets. There are three basic models of widgets made in the factory: the Econo Widget, Deluxe Widget and TurboDeluxe Widget. Of course, not all widgets are the same, there are all kinds of options for each widget model.

You are paid by the number of widgets assembled. The price you are paid for assembling any one of the three widgets is low, and the price paid per widget has not kept up with inflation for 20 years. Making enough widgets to earn a living wage is becoming a bigger challenge every year.

The creation of high quality widgets requires a great deal of education, skill and experience.  The more experienced craftsman can generally assemble a widget better and faster, regardless of complexity, than the less experienced craftsman.  A skilled craftsman is also more efficient, and can make a high quality Econo Widget in as little as 10 minutes and a TurboDeluxe model in less than 30 minutes. A less experienced and skilled craftsman may take as long as 30 minutes to assemble an Econo Widget, and an hour or more to assemble a TurboDeluxe.

The new 2017 CPT eval codes for PT, OT, and SLP are here. Don't miss this cheatsheet to help familiarize yourself with the new codes.

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But, the compensation per widget assembled is the same regardless of the complexity and quality. As a craftsman, you have some control over this, because you can go to the widget parts room and select the parts for the widgets you want to make.  This, of course, creates a problem, because if it wasn’t for the intrinsic joy of widget-making you would always have an incentive to make as many Econo Widgets as possible. And, since the price per widget has been going down, it is becoming harder to assemble the TurboDeluxe models just because those models are in high demand.

Today, prior to your shift, your supervisor calls a meeting and makes an announcement:

“We have had a continuing problem with our TurboDeluxe widget production. You may know, because we announced it to everyone, that the management team has been having a series of meetings on this problem for years now. We kept the details of these meetings confidential, because we don’t want to be burdened with your individual comments and input. But, we have worked with some of your most knowledgeable fellow widget-makers. We have summarily ignored most of their feedback, and come up with some policy changes. This will be great!”

 “From now on, you must begin classifying and reporting on all of the widgets made by complexity of assembly, parts availability, the stability of the assembly line, the skill involved in making the widget, and the approximate time spent making the widget.”

The craftsman asks: “Will we begin getting paid more for making the TurboDeluxe Widgets?”

Answer: “No, we think it is going to be really complicated for us to pay you differentially based on widget complexity, even though we are going to make you report to us on that basis. Besides that, we think some of you may be less than honest and start reporting you are making more complex widgets than you really are… so, uh, the answer is, uh, no.”

The craftsman then asks: “What if we don’t classify the widgets assembled correctly?”

Answer: “Oh, I forgot to tell you. There may be all kinds of unforeseen consequences. If we find out you aren’t classifying widget production complexity accurately, you could get fired.”

The craftsman then asks: “Can we at least get a small raise per widget? Doing all of this just adds work for us, and it only seems fair that we get paid a little more.”

Answer: “No.”

The Real-Life CPT Code Factory

Of course, the above story is absurd, but the process for changing the CPT evaluation codes, and the rationale for the final decision, make just as much sense.

The APTA has been advocating for reform of our “widget count” process for many years now. The combination of “timed” and “untimed” CPT codes for physical therapy and occupational therapy services are complex, arbitrary and a poor reflection of value. The APTA originally proposed a system comprised of 12 codes meant to replace the “one size fits all” evaluation and treatment codes to more accurately reimburse PTs based on the complexity of treatment and severity of the condition being treated.

The APTA and representatives of other professional organizations, like the AOTA and NARA, have been advising the AMA as part of a confidential process to reform these codes. But, rather than accept the pieces of the proposals that would create actual reform, the AMA has come up with a series of three complexity based evaluation codes to replace the existing single code for PT and three more complexity based codes to replace the single evaluation CPT code for occupational therapy, all without addressing the need to change the other treatment procedure codes.

Fail on All Counts

The relative value unit (RVU) system is designed to align the skill, work, and expense involved in providing care with the payment for providing that care. But in the strangest twist of all, CMS is proposing that the RVU for the new evaluation codes stay the same as they were for the old codes, regardless of complexity.  This, of course, makes no sense.

So, now, on top of:

  • the failed and incredibly poorly designed Functional Limitation Reporting program that requires us all to report on codes that that reflect useless garbage data,
  • the ridiculous and poorly understood timed procedure codes, and
  • PQRS codes that don’t reflect PT, OT, or Speech practice.

CMS is going to add to the complexity with these new evaluation codes.

CMS Rationale

The rationale for adding this complexity with no RVU adjustment is fascinating. Quotes from the Federal Register are shown on the left below, with my comments on the right:

Comments from the Federal Register


“the coding stratification in the PT and OT evaluation codes may result in up coding incentives”

Of course there is!  There are always financial incentives to up code.

“…especially while physical and occupational therapists gain familiarity and expertise in the differential coding of the new PT and OT evaluation codes that now include the typical face-to-face times and new required components that are not enumerated in the current codes”

This is much less complex than Functional Limitation Reporting and we already have to account for face to face time with patients with the current timed procedure codes.

We are smarter than you think.

“We are also concerned that stratified payment rates may provide, in some cases, a payment incentive to therapists to upcode to a higher complexity level than was actually furnished to receive a higher payment.”

Again, of course, a stratified payment system provides a financial incentive to upcode. Physicians have had stratified evaluation and management codes for years. Are physicians as a group less inclined to upcode than PTs and OTs?

This new rule fails on all counts: it does not decrease complexity, reform the unfair and arbitrary timed procedure code system, or align financial incentives with quality.

What is Next?

At Clinicient, we will continue to research and analyze the new rule, share what we learn with everyone, and adapt our systems and processes to help our clients comply with the new evaluation codes. We recently hosted a webinar with compliance expert, Nancy Beckley, where we outlined all of the changes coming your way. Watch the on-demand recording here.


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