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Medicare Cuts Won’t Be As Deep As Originally Thought

As most physical therapist practice owners have been busy planning for 2022, many have been planning for and expecting major cuts from Medicare reimbursement.  Trying to navigate new roads with the PTA payment differential that is reducing what is billed in the CMS fee schedule by a whopping 15% has been challenging to sort out.  In addition to that we’ve all been expecting another overall reduction of nearly 10% – return of the 2% sequester that was paused during Covid-19 times, a 4% fee schedule decrease in payment, and 4% decrease of payment from Medicare because of PAYGO rules in 2022.

Favorable Legislation Passed!  {Insert sigh of relief here}

Thanks to advocacy efforts from the APTA, the PPS (private practice section of the APTA), and our PT healthcare allies, today President Biden signed into law some very favorable legislation for physical therapists in 2022.  

What you can expect

There are 3 parts of this bill that pertain to physical therapists and payments from Medicare.  First, there will be a 3% payment increase to the 2022 Medicare Physician Fee Schedule conversion factor of $33.59.  While we were advocating for 3.75%, this outcome is very favorable for us!  Second, cuts in reimbursement due to sequestration will slowly tier back into place.  On April 1, 2022, a 1% sequestration will take place through June 30, 2022.  Eventually on July 1, 2022, the full 2% sequestration will return to all Medicare claims.  And finally, a waiver of the 4% statutory cut to Medicare because of PAYGO rules for the entire year of 2022.

For those of you that didn’t know about this, the Statutory Pay-As-You-Go Act (Statutory PAYGO) of 2010 is a budgetary enforcement mechanism designed to control the effects of newly enacted legislation on the deficit.  When cumulative Congressional spending has increased the federal deficit over either a 5 or 10 year period, the Executive branch is required to implement across-the-board cuts to nonexempt direct spending programs to offset the increase. Medicare payments are at risk of up to a 4% cut under Statutory PAYGO.  However, Congress has the power to waive the PAYGO limitation—and has done so as part of this end-of year package.


PPS is still pushing strong for other PT advocacy issues, such as H.R. 5536, to delay the payment differential to PTA’s in rural and medically underserved areas, as well as the PTA supervision requirements.

It is never too late to voice your opinion to your local congressmen and congresswomen about the many issues affecting physical therapists.  You can check out what is going on currently at at the federal level and you can find PT templates here for yourself and your patients.

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