How outpatient rehab therapy practices can reduce the impact of this Medicare billing rule.

Running a profitable clinic can be challenging when you have a significant population of Medicare patients. The myriad of rules and regulations can complicate the claims process, and reimbursement rules like the multiple procedure payment reduction (MPPR) can further reduce reimbursement rates for clinical rehab providers. No wonder it’s so important to have a diverse payer mix with your patients!

In our guide, we’ll discuss the purpose and financial impact MPPR can have on rehabilitative therapy clinics, as well as our tips to reduce the impact MPPR can have on therapy services.

What is MPPR?

Multiple procedure payment reduction (MPPR) impacts the value of Medicare reimbursements. For Medicare, reimbursements are calculated based on the CPT code used and the relative value units (RVUs) of each code. Practice expense, relative work, and malpractice expense are all components of the total RVU of a code. MPPR reduces the reimbursement for any subsequent unit of service performed after the first unit for a given code and decreases the practice expense component of the code by 50%. Not all services will receive an MPPR, but some labeled “always therapy” services will.

The Centers for Medicare and Medicaid Services (CMS) maintains a list of “always” and “sometimes” codes that apply in the SLP, PT, and OT settings. In general, an “always therapy” is any service that you can bill only when you include it in the patient’s plan of care. MPPR took effect in 2013 and applies to practices, clinics, and institutional health care facilities.

How does MPPR impact payments?

According to the American Physical Therapy Association (APTA), MPPR typically results in a Medicare payment reduction of up to 7% for the typical therapy practice. Below, we’ve included an example of how this works when a Medicare patient receives three units of therapeutic exercise on the same day.

CPT CodeServices ProvidedMalpractice InsurancePractice ExpensesTotal
97110 Therapeutic exercise - 15 mins (1st unit)$50$5$20$75 (no reduction)
97110 (2nd unit)$50$5$10
($20 - 50%)
$65
97110 (3rd unit)$50$5$10
($20 - 50%)
$65

This rehab therapy practice would receive a total reimbursement of $205 for these three services, compared to $225 without the MPPR rule. In this example, each service has the same practice expense for ease of illustration. However, when each service has a different practice expense, you will receive full reimbursement for the highest amount and a 50% reduction on the lesser amounts.

How can clinics minimize the impact of MPPR?

While the typical therapy practice may only see a 7% reduction in their Medicare reimbursements, those reductions can add up fast if you have a large percentage of Medicare patients.

Luckily, you can track the impact of MPPR using reporting tools. With the right integration, your clinic can have better visibility into the impact MPPR has on reimbursements. You can monitor which services or CPT codes are being replicated during visits, resulting in reduced payments. And with better visibility, providers can adjust their care plans to minimize future claim issues while still providing exceptional care.

But there’s more that clinics can do to stay financially healthy, despite impacted Medicare reimbursements. Here are three of our top suggestions:

  1. Apply the KX modifier appropriately: Besides MPPR, Medicare reimbursements can also be impacted by the therapy threshold. In 2022, any services that exceed $2,150 (for combined PT and SLP, or OT services) for a beneficiary must include the KX modifier to denote the services as “medically necessary” for the patient. Proper modifier use means faster reimbursements and less chance for denied or delayed payments.
  2. Always document defensibly: Defensible documentation reduces the risk that your claim will be denied and supports the medical necessity of the patient services you provide. As a refresher, defensible documentation should:
    • Provide details about the person’s diagnosis, along with resulting functional limitations and deficits.
    • Be legible, clear, and easy to understand.
    • Include a comprehensive care plan.
    • State measurable objectives for the patient care plan.
    • Discuss the provided treatments and the amount of time spent performing each one.
    • Document the patient’s progress or lack of progress as appropriate.
    • Include comments on the care plan, treatment, and progress from both the patient and provider.
  1. Be aware of the targeted medical review threshold: Besides the therapy threshold, clinics should also be mindful of when a medical review can be triggered. Until 2028, when CMS plans to update the threshold, the limit is $3,000 for PT and SLP services combined or $3,000 for OT services. If services exceed that limit, they may be subject to review from a third-party Medicare contractor, especially if the clinic in question has a history of lack of compliance, unusual billing practices, and a substantial number of denied claims. The best way to stay on top of a potential medical review is—surprise, surprise—through defensible documentation.

The value of a single-system EMR for Medicare compliance

Tips are one thing, but what can really help clinics mitigate the impacts of MPPR is a single system for documentation, financial information, and reporting.

Clinicient’s Insight Platform relies on proven best practices, workflow automation, and coding and reporting tools to stay on top of MPPR and other Medicare regulations. With the Insight Platform, your clinic can:

  • Simplify compliance. A single system means end-to-end processes can all happen in one place, without having to worry about visibility or interoperability issues, or multiple log-in screens. You can control, visualize, and manage Medicare requirements with fewer clicks, and the system will help your clinic maximize reimbursements.
  • Operate intelligently. With smart alerts and billing tool automation, you know exactly when to apply KX modifiers when a patient is near the therapy threshold or apply other modifiers when necessary. Plus, you’ll be able to visualize potential discrepancies between what you expected from a reimbursement versus what you were paid, so you can rework processes to improve your reimbursements and get paid the full amount you’re owed.
  • Avoid complex math and guesswork. The platform automatically calculates MPPR based on a built-in RVU table. And those reductions are calculated into other areas, too, so you can track both the therapy and medical review thresholds without having to pull out your calculator.
  • Understand the impact of MPPR. With Insight’s reporting dashboard, your clinic can harness revenue reporting tools to forecast the impact of MPPR on cash flow and revenue.

Frequently asked questions about MPPR

If you have questions about MPPR, you’re not alone. Here are some of the most common questions from rehab therapy providers on this Medicare rule.

Besides Medicare, do other insurance providers use MPPR?

While every insurance provider has its own policies, some non-Medicare payers do use MPPR. Check with each payer’s billing policies before submitting claims for reimbursement.

What services does MPPR apply to in rehabilitative therapy?

MPPR applies to services that Medicare has labeled “always therapy,” as explained earlier in the guide. MPPR does not affect audiology services.

MPPR must be used across practice settings as well as across disciplines, including PT, OT, and SLP services performed in the same facility or setting, on the same day, for a single patient.

Does the therapy threshold still apply when a payment is reduced?

Yes, the therapy threshold still applies. The threshold limit is the amount Medicare Part B will pay toward approved PT and SLP services combined, or OT services unless the services that exceed the threshold are deemed medically necessary (and include the proper modifiers).

Is MPPR likely to go away someday?

Although organizations such as ASHA, AOTA, and APTA advocate with Congressional legislators to increase Medicare funding for therapy services, change comes slowly in this arena. While federal lawmakers may eventually reverse these policies, rehab therapists and billing professionals should understand how MPPR works, as it will likely be in use for the foreseeable future.

Where can I find more information on MPPR?

If you’re curious to learn more about this policy, visit CMS’s Therapy Services page for more resources and billing guidelines. Additionally, you can find other resources from the following advocacy organizations:

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