Last month, CMS released the “Medicare Part B” CY 2022 Medicare Physician Fee Schedule (PFS) Proposed Rule outlining proposed changes which would take effect January 1, 2022. This proposed rule only applies to traditional Medicare and not Medicare Advantage plans.

The 804-page document includes proposed therapy pay cuts, a therapist assistant differential, and updates to therapy telehealth services. Stakeholders are advocating that CMS delay implementation of these significant rate decreases to allow providers additional time to recover from the pandemic. Further, advocacy for access to services in rural and underserved areas is underway in regards to the therapy assistance differential.

Topics of interest to long-term care operators:

The Conversion Factor (CF)

  • The rule proposes to reduce the part B reimbursement conversion factor to $33.59 in CY 2022 from $34.89 in CY 2021
  • What does this mean? The CF is part of a formula that converts Relative Value Units (RVU) to dollar amounts. If the CF is down, the overall payment rate for therapy CPT codes will be down, unless the RVU value for a particular CPT code goes up.
  • In 2021 therapy faced a 9% payment reduction, and only through congressional intervention was that cut reduced to approximately 3.3%. Unfortunately, this funding fix ends in CY2021 and the remaining effects of budget neutrality stemming from the 2021 E/M code reimbursement reductions are set to take effect through the Conversion Factor.

Payment Reduction for Treatment Rendered by Therapist Assistants (PTA/OTA)

  • Effective January 1, 2020, Part B providers began using new PTA and OTA Payment Modifiers, CQ and CO respectively, on billing claims to indicate if the treatment was provided in whole or in part by a therapist assistant.
  • Though the modifiers are currently only used for data collection, effective 1/1/22 they will be used to apply a payment reduction of 15% when more than 10% of the service for timed codes is provided by a PTA or OTA. This is known as the de minimus standard.
  • The reduction will only be applied to the 80% Medicare allowable portion and not applied to the 20% patient co-payment.
  • In response to stakeholder comments, CMS agreed to incorporate the 8-minute “Midpoint Rule” into the de minimis standard calculation, and the rule now does not apply when the therapist performs at least 8 minutes of the last unit of service. The proposed rule offers new billing scenarios from those released in March 2021:

  • Medicare Manual documentation requirements were not updated to require specific charting of therapy assistant minutes in progress notes; however, CMS states that they expect documentation in the medical record to be sufficient to know whether a specific service was furnished independently or in part by the therapy assistant.
  • The payment reduction is not applicable to the following untimed codes: evaluation/reevaluation codes, group therapy and supervised modalities.
  • CMS provides clarification and several hypothetical examples of the above methods in the rule on pages 114-115.
  • CMS will issue an MLN article once the change request is released, after the CY 2022 PFS final rule is published.


  • CMS received several requests (see Table 8, page 29) to permanently add various services to the Medicare telehealth services list effective for CY 2022.
  • CMS determined that the requested services did not meet the Category 1 criteria for addition to the Medicare telehealth services because they are therapeutic in nature and in many instances involve direct physical contact between the practitioner and the patient.
  • Furthermore, CMS determined that the requested services did not meet Category 2 criteria because sufficient detail has not been provided to determine whether all necessary elements of the service could be furnished remotely, and there is not adequate evidence of clinical benefit if provided as telehealth versus in person services. CMS stated they encourage commenters to supply sufficient data to be able to see all measurements/ parameters performed, so they may evaluate all outcomes.
  • CMS is proposing to extend the Category 3 telehealth code list (see Table 11, page 35-38), which includes therapy codes, until December 31, 2023. The list is currently set to terminate at the end of 2021.

Remember, these changes are for Part B therapy only. CMS will accept comments on the proposed rule until September 13, 2021, and will respond to comments in a final rule. Electronic comments can be submitted using this link. Providers may also seek opportunity to make comment using template letters created by groups such as NARA, NASL,  APTA and AOTA as they become available.

For more information: Read CMS’ Fact Sheet; Read CMS’ Press Release; Read HHS Federal Register

Contact Proactive for an impact analysis of therapy department staffing and review of long-stay rehab service programming.


Blog by Stacy Baker, OTR/L, RAC-CT, CHC Proactive Medical Review

Learn more about Stacy and the rest of the Proactive team.