Starting next October with the implementation of the Medicare FY 2010 Final Rule and RUG IV system, the Center of Medicare Services (CMS) will most likely redefine how concurrent therapy is billed and regulated under Medicare Part A and Part B.  Will these new regulations in billing practices bring some rehab providers to the brink of financial ruin (much like the Perspective Payment System or PPS did in 1998) or will the policy only have lenient effects in the way we do business and treat patients?  I will try to answer both of these questions in the paragraphs below and analyze the impacts that this policy may have within our industry[1].

In trying to answer the above questions, we must first understand the current policy as it stands now under both Medicare Part A and Part B coverage.  Medicare Part A allows for concurrent therapy in where therapists treat more than one patient during the same specific time period (also referred in the industry as dovetailing).  Under Medicare Part A, the number of patients that can be seen concurrently has no limits (although group therapy may be preferable when treating more than 3 patients concurrently) as long as the therapist is providing care that is consistent with good clinical standards.  Thus, the decision as to how many patients can be seen at the same time has been totally left to the clinician’s discretion as read in the most recent Medicare final ruling of 2005[2]:

Moreover, Under Part A, “group therapy” can be billed when treating more than two patients who have similar plans or care and are working on parallel clinical and functional goals at the same time.  Medicare Part A SNF rules however require that group therapy be limited to 25% of the patient’s time spent in therapy and that there only be a maximum of four patients per group per therapist or therapy assistant.  Under Medicare Part B there is no concurrent therapy allowed when compared with the exception of Group therapy (leave it up to Medicare to come up with different regulations and policies when at the end of the day we are all dealing human beings!).  In fact, all CPT codes billed under Part B require one – to – one therapy with the exceptions of certain “supervised” / “procedural codes” (i.e. electrical stimulation – G0283; short wave diathermy – 97024; etc).  Under the current law such codes are allowed to be billed at the same time while two patients are on the floor (i.e. GO283 is billed for Patient A while at the same time therapist is performing manual therapy on patient B).  If a therapists wishes to see two Part B patients at a time, he or she can only do so under a “group therapy” code – 97150 or while another patient is under a supervised / procedural code such as electrical stimulation (GO283).  Unlike Part A, Medicare Part B has no limit on the number of participants in a group per supervising therapist and does not limit the amount of time a patient can spend in group therapy.  Furthermore, under Group B therapy, activities between patients can be similar OR different.  When providing treatment to different patients that may be in the gym at the same time under Part B, a therapist may provide one-on-one therapy to more than one patient in the same treatment area, but must count only the time the therapist was directly treating the individual patient (i.e. if a therapist treats three persons over a 60-minute period of time, the therapist can work with each patient in rotation, but must bill for only the minutes of time spent in direct one-to-one treatment with each)[3].

So back to our original questions: will these new regulation in billing practices bring some rehab providers to the brink of financial ruin (like PPS did in 1998) or will the policy only have lenient effects in the way we do business and treat patients?  My position on both questions is – it depends on the quality of care that rehab providers are rendering.  I definitely do not think that the final rule will be nearly as impactful to the industry as PPS was in 1998.  PPS changed the basic paradigm in which rehab companies did business and managed their practices and all players had to dramatically adjust the way they did business.  While there will be changes in the case mix classification and resource groups (RUG – IV) and Minimum Data Assessment form (MDS) for Skilled Nursing Facilities, these changes will not likely affect the revenue streams or operations of the rehab business nearly as much as PPS did in 1997.  Good (and bad) rehab providers know how to play the rules of the current game very well by now and under the current final rule the game has not changed nearly as much as PPS did with the old “per cost” system implemented prior to 1997.  Concurrent therapy however, could have a large financial impact on those players that tended to abuse the current system and provided care that is not consistent with best clinical practices in lieu of profit maximization (i.e. developing systems to allow a single therapist to treat more than 12 geriatric patients in a span of 4 hours).  Depending on the skill level of the clinician, working with more than two geriatric patients at a time makes it very difficult for therapists to provide skilled clinical services (unless patients are been appropriately treated with a supervised code such as a modality or are working under group care) in the best interest of the patients’ rehabilitation goals.  It is precisely however this type of activity and abuse that lead Medicare to outlaw concurrent therapy under Part B and now beginning in October limited to only two patients under the new Part A regulation.

I believe that those providers which have been adhering to ethical standards of care and are focusing on clinical outcomes and excellence rather than volume will be much less likely to be affected by the current regulations.  These providers pretty much are already following the clinical guidelines that Medicare is recommending for concurrent therapy under the new regulations.    In fact, those players will see this new rule as a great opportunity to gain market share over it’s less clinically and outcome focused competitors.  Unlike PPS then, the providers that are focused on patient outcomes and quality of care will not have to totally restructure their operational systems to play under the new rules.  But those providers that are not will have to change not only their practices but cultures in order to survive under the current market conditions.  I believe that any law, regulation or policy that is in the best interest of the patient is one to be considered and implemented.  Unlike many other Medicare policies such as therapy caps, and absurd and complicated case mix groupings such as RUG’s, DRG’s and HHRG’s to figure out reimbursement rates (you almost need a PhD to figure those out!), I believe that Medicare has got this one right this time.  After all it should not be that complicated – good patient care is good business.

Luis A. Montes, DPT, MBA