On November 2nd, CMS released the Physician Fee Schedule (PFS) FINAL RULE, or the “Medicare Part B Rules” outlining what will kick in 1/1/22 for most settings that provide these services.

This 2,414 page document includes information on payment rate changes, modifiers, telehealth and more! We highlighted the Medicare Part B rules that are most pertinent to SNF therapy professionals.

So let’s take a look…

What Do SNF Therapists Need to Know for January 1st, 2022?

1. Rate Information

Last year, big cuts were expected for therapy services [9%] due to the re-valuation of multiple Current Procedural Terminology (CPT) Codes… the billing codes therapy professionals use to identify evaluation and treatment procedures for SNF residents. The value of CPT codes used mostly by physicians, called Evaluation and Management Codes (E/M) was increased, therefore, in order to maintain a neutral budget, other CPT codes needed to take the hit, including CPT codes used by PT, OT and Speech. These code value changes were made last year, however, the cuts were decreased from 9% to 3.5% when Congress intervened with $3 billion. Still a cut…but less severe.

This year, it’s no surprise that CMS proposed continued cuts [3.75%], and no word of a monetary intervention from Congress is in sight!

What was cut? Let’s talk about the Conversion Factor.

The Conversion Factor (CF) is a value that CMS modifies yearly. The CF is part of the formula that determines the dollar amount for each CPT code by converting Relative Value Units (RVU), and impacts all CPT Codes across the board. When the CF decreases, the overall payment rate for the CPT codes decrease, unless the RVU for a specific CPT code is increased significantly.

The CF has not been trending in a favorable way over the past 3 years! For 2022, the CF is down $1.30, or 3.75%.

Keep in mind that these cuts may impact therapy providers differently due to other characteristics that factor into rate determination, and particular CPT code billing patterns utilized by providers.

In the Final Rule, CMS also confirmed the correction of technical errors to the Direct PE for OT Evaluation CPT codes 97165-97167. With this, we would see an increase in reimbursement for these codes, however, with the overall CF cuts, there is still a net decrease.

Did you know you can look up any CPT code and check the rate HERE ?

2. KX Modifier Threshold and Manual Medical Reviews

KX Modifier Threshold

The cap is gone and is not coming back! But…..the Therapy Cap is now disguised as the KX Modifier Threshold. Continued use of the KX modifier is required for all therapy services that “would have exceeded the previous therapy cap amounts,” or claims will be automatically denied.

The new “threshold” for 2022 is $2150 for OT, $2150 for PT and Speech combined (up from this year’s amount of $2110).

What does using the KX modifier mean?

“By applying the KX modifier to the claim, the therapist or therapy provider is confirming that the services are medically necessary as justified by appropriate documentation in the medical record.”

Manual Medical Review

The manual medical review threshold continues at the same amount of $3000 until 2028.

A review is not automatic when the $3000 is reached. CMS is using targeted reviews, limiting reviews to “outliers” and those with questionable practice patterns.

3. Payment Reduction for PTA and OTA Services – “Payment Differential”

In the Final Rule, CMS reiterates that there is nothing they can do about eliminating the 15% payment reduction for PTA/OTA services on 1/1/22, as this change is law mandated in the 2018 Bipartisan Budget Act [Tied to the deal that allowed elimination of the “therapy cap”].

The CQ and CO modifiers that have been in use for 2 years to identify when therapy services are provided “in whole or in part” by an assistant [PTA or OTA] will now finally translate to reimbursement reduction for services on or after 1/1/22.

Medicare currently pays 80% of the PFS allowed charge and the resident (or other payer) pays the remaining 20%. On 1/1/22, Medicare will transition from paying 100% of that 80%, to paying only 85% of that 80%. The remaining 20% is still the patient’s responsibility, though this is not always collectable in the SNF due to Medicaid or other limitations.

Pre 1/1/22:Of the allowable charges:Medicare pays 80% / Patient pays 20%
(or has a supplemental plan that pays the 20%)
On 1/1/22:Of the allowable charges:Medicare will only pay 85% of their 80% portion / Patient pays 20%
*The 15% payment reduction applies only to Medicare’s 80% portion

We will continue to use PTA Payment Modifier CQ and OTA Payment Modifier CO on claims to identify when services are provided by an assistant, if the CMS established criteria for “in whole” or “in part” is met, and will have the ability to divide the same CPT code into more than 1 line item for the same day on the claim so the modifiers can be used only when necessary.

How does CMS define when the CQ and CO modifiers are required?

The Rule provides an overview, and makes some positive changes to prior criteria that make more sense when looking at a treatment session that is provided by both a therapist and assistant on the same day.

  • CMS is defining in whole as provision of the full service by an assistant
    • ie: The assistant provided the full treatment
  • CMS is defining in part  as provision of more than 10% of a therapy service by an assistant
    • ie: The assistant provided >10% of a “service”

CMS is defining  therapy service as a “procedure” identified by a HCPCS code {A.K.A. CPT Code}. On a Part B claim, each “procedure” is identified line by line to include CPT codes, units and modifiers. The new modifiers would be added specifically to the procedure line item to show an assistant provided treatment that met the de minimis standard.

CMS has adopted many suggestions from our professional associations, and is using more of a “common sense” approach to when the modifiers are needed, specifically, including the “8-mintue rule” in the mix.

CMS has outlined a step-by-step process to assigning CPT codes and modifiers based on each billing situation. All therapy professionals need to read pages 480-506 of the Final Rule PDF, to clearly understand the modifier process. (link below) CMS will publish updated examples here www.cms.gov/Medicare/Billing/TherapyServices after January 1st. Please note that the current billing examples listed here have not been updated with the Final Rule methodology.

For now, it’s important to recognize that these changes will impact therapy scheduling of treatments in the SNF, and documentation will need to reflect enough information for a reviewer to determine how much time an assistant spent on each portion of the treatment (how much time toward each CPT code) in order to determine if a modifier is necessary.

4. Virtual Services and Telehealth

Virtual Service is the umbrella category where Telehealth lives. Virtual Services encompass Telehealth, E-Visits, Virtual Check-Ins and Telephone E/M services.

Therapists were not able to provide telehealth services prior to the Public Health Emergency (PHE) and are currently only able to provide telehealth now through waiver authority under section 1135(b)(8) of the Act, in response to the PHE for COVID–19. Why? Because CMS removed restrictions in section 1834(m)(4)(E) of the Act on the types of practitioners who may furnish telehealth services.

At the conclusion of the PHE for COVID–19, these waivers and interim policies will expire, and payment for Medicare telehealth services will once again be limited by the requirements of section 1834(m) of the Act.

CMS has reiterated in the Final Rule that they do not have the authority to deem therapy professionals as approved telehealth providers.

What does this mean for therapists?

When the PHE ends [the day it ends], all temporary rules, including allowing therapy professionals to provide telehealth, will end. There will be some “therapy” codes that remain in effect through the end of 2023, but even though these codes will live, therapists will not be able to provide and bill Medicare for these services, as our temporary permissions will have expired (don’t forget that others professionals can bill these codes too).

There is current legislation, the Expanded Telehealth Access Act [H.R. 2168], in the works now to try to make PT/OT/SLP approved providers of telehealth by permanently adopting the policy that is temporarily in place due to the Public Health Emergency (PHE).

CMS provided the updated list of Telehealth CPT Codes for the PHE duration on 11/2/21. You can download the list here:

New Virtual Service Codes for Therapy Professionals

The Final Rule surprisingly deemed the 5 new Remote Therapy Management (RTM) codes as allowable for therapists in private practice and institutional settings. Though at this point, these codes will likely not be used in the SNF setting, here are the codes and definitions:

  • CPT code 98975 ─ Remote therapeutic monitoring (e.g., respiratory system status, musculoskeletal system status, therapy adherence, therapy response); initial set-up and patient education on use of equipment
  • CPT code 98976 ─ Remote therapeutic monitoring (e.g., respiratory system status, musculoskeletal system status, therapy adherence, therapy response); device(s) supply with scheduled (e.g., daily) recording(s) and/or programmed alert(s) transmission to monitor respiratory system, each 30 days
  • CPT code 98977 ─ Remote therapeutic monitoring (e.g., respiratory system status, musculoskeletal system status, therapy adherence, therapy response); device(s) supply with scheduled (e.g., daily) recording(s) and/or programmed alert(s) transmission to monitor musculoskeletal system, each 30 days [CMS referenced ARIA PT device]
  • CPT code 98980 ─ Remote therapeutic monitoring treatment management services, physician/ other qualified health care professional time in a calendar month requiring at least one interactive communication with the patient/caregiver during the calendar month; first 20 minutes
  • CPT code 98981 ─ Remote therapeutic monitoring treatment management services, physician/other qualified health care professional time in a calendar month requiring at least one interactive communication with the patient/caregiver during the calendar month; each additional 20 minutes (List separately in addition to code for primary procedure)

5. Direct Supervision by Interactive Telecommunications Technology

Currently, due to the PHE temporary rule set, the Medicare rule around “direct supervision” has been modified to include providing direct supervision via audio-visual technology through 12/31/2021. The Proposed Rule discussed the possibility of making this permanent policy, thus removing the need for direct supervision for Medicare reimbursement. The Final Rule states that changing the definition of supervision from direct to general (in private practice settings) is not up for discussion. However, CMS did extend the use of the temporary definition through to the end of the PHE year, which we now know to be 12/31/2022.

Of note, this does not impact the SNF setting specifically as Medicare Part A and Part B in the SNF currently require “general supervision,” meaning a therapist does not need to be in the room or on site in order for an assistant to provide services. Medicare Part B supervision rules for Private Practice, however, are more strict.

Do not confuse this rule with your State Practice Act requirements for supervision. This is only a Medicare payment regulation based on Medicare’s definition of Direct Supervision. Therapy professionals must abide by their discipline State Practice Act which may require on-site supervision, and would supersede the Medicare rule.

Important Links and Resources


Remember, these changes are for Part B therapy only, and specific to the SNF setting. We teased out the parts of the Rule that applied to the SNF….so don’t worry about MIPS or other rules specific to private practice!

As we approach the end of the year, keep an eye on Congress, where potential changes to payment cuts, telehealth rules and the PTA/OTA payment differential, could be a reality.

As always, if you have any questions about the information or how it will impact you, send them to us here:

In Your Corner,

Dolores Montero, PT, DPT, RAC-CT, RAC-CTA

SNF Therapy & MDS Compliance Team


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