Is Your Therapy Provider Losing You Money?

Therapy Part B MPPR


Background of MPPR

Effective January 3, 2011, as part of the Affordable Care Act, CMS implemented the MPPR (Multiple Procedure Payment Reduction).  This is a reduction on fees paid to providers for Part B services, with the reduction of the “Practice Expense” (PE) portion of the Medicare Physician Fee Schedule.  This affects physicians and non-physician practitioners that bill Medicare Part B via code or unit. For long term care providers, this relates to your Part B therapy services, and even sometimes many private B-type insurances.

Initially, CMS reduced the PE portion by 20%, but then increased it to a 50% reduction of the PE, as of April 1, 2013.  These reductions apply when more than one code is performed/billed on the same day, regardless of discipline.  For example, if your physical therapist bills 4 codes, your occupational therapist bills 3 codes, and your speech therapist bills 2 codes, all on the same day, then the FIRST CODE BILLED is paid at 100%. MPPR is then applied to the rest of the codes, thus reducing the reimbursement for each of the remaining codes for that day.


Why Is This Important?  We Already Know About This!

I think by now, most all long-term care providers that also provide part B services to their inpatients, and/or provide outpatient therapy, are well aware of these reductions.  However, here is where it can get surprising….this on average is a 6-7% reduction in your overall reimbursement for those services.  Thus, if you typically bill (excluding your contractual allowances and co-insurance) $20,000 per month in therapy Part B services (inpatient and/or outpatient), then this lessens the reimbursement between $1200 to $1400 per month or more.  That may not sound like a lot of money, but keep reading…


My Therapy Company Charges Me Based On The Medicare Fee Schedule, So It’s Their Problem, Right?

Um, not necessarily.  Your contract may state that they are charging you 70% of the fee schedule, but more and more I am seeing therapy contracts that DO NOT ADDRESS THE MPPR.  If they don’t, that means you as the provider are EATING THAT COST.  NOOOOOO!

Suddenly, if you look at a provider that says they are charging you 70%, but do not take out the MPPR, then you are billing $20,000, they are taking $14,000, but you are only getting back $4,600, not $6,000.  That’s a pretty big deal since that money typically flows directly to your monthly bottom line.  That means that the therapy provider is actually charging you 77% of the fee schedule, not the 70% you THINK you are getting charged.

Think of what you could do in a year with just an additional $1,200 to $1,400 per month?  That $16,800 of pure net revenue could go a long way in any building, as there is no additional costs associated with that revenue going straight to your bottom line.


Here’s Your Homework…

If you use contract therapy, reread and double check your contract.  If it’s not stated in the contract, look at your invoice and see if the MPPR reduction has been applied, or ask your therapy company directly.  When we talk with other LTC providers, we are seeing this with both local therapy providers in additional to national providers.  Getting a handle on this is increasingly important as we see SNF utilization going down nationally and outpatient utilization trending up by our surgeons and acute care partners.  In today’s ever-changing reimbursement, we all know that every penny matters.  And in this case, we aren’t just talking chump change!


Kerry Wright, OTR/L
Executive Director of Business Development and Southern Operations
Healthcare Therapy Services, Inc.

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