Starting New Year’s Day, payment rates for occupational, speech, and physical therapy for Medicare Part B will be cut by up to 9%.
Skilled nursing facilities will have to take a hard look at these services, a ripple effect that could have big implications for third-party vendors.
The cuts come on top of pivotal changes to skilled nursing facility reimbursement in the form of the Patient-Driven Payment Model, and a pandemic that’s decreased the number of admissions and caused the cost of care to go up — along with the need for personal protective equipment (PPE) and coronavirus testing.
Clinics that primarily treat Medicare Part B patients already were running on tight margins, and these cuts could force closures or cuts to services, according to JoLynn Munro, division president at Infinity Rehab, which serves over 220 skilled nursing facilities and assisted living facilities across 19 states.
“These cuts occur at a critical time with an ever-increasing need to treat the long-term effects of COVID-19 in our seniors — many have lingering neurological, cardiac, and respiratory issues that affect their ability to function even after the acute phase of the illness has passed,” Munro said. “Of note, nearly 60 million Americans have Part B coverage, so the scope of this cut is large.”
The cost of care, and the need for this care, has only gone up because of the pandemic, according to Cynthia Morton, executive vice president at the National Association for the Support of Long-Term Care.
“The costs for providing this care have increased with the providers having to spend on personal protective equipment, and also hazard pay for our employees,” Morton, noting that these facilities are also required to now conduct COVID-19 tests weekly. “None of this is reimbursed. So it’s more expensive for us to pay the providers to provide this care.”
NASL and other trade groups have called on Congress to override the cuts through legislation.
Prodigy Rehabilitation Group president Babak Amali says the reduction in reimbursement will have a substantially negative impact on the revenue generated to help third-party rehab vendors stay afloat operationally and financially.
“In these hard times when the overall revenue has, for the most part, vanished, due to very low census and/or completely stopped admissions, and operational costs have skyrocketed to comply with what appears to be never ending rule changes, PPE, testing and additional staff, implementing such steep reimbursement cuts just does not make any sense,” Amali said.
Meanwhile, the need for care hasn’t diminished, while workloads for therapists have increased. Patients are more likely to be confined to their room because of COVID-19 measures, according to Morton.
“If you’ve got a particularly acute COVID situation in a building, there’s not movement into the hallways. Activities have been curtailed, and you may have less staff able to work in that building, so not as many CNAs to get a patient up off their bed, and so mobility has been restrained,” Morton said. “They need a lot more help, and a lot more work.”
The cuts could very well mean that facilities have to scale back rehab services. Morton used the example of a facility that uses a vendor to staff a therapy gym seven days a week.
“I can’t do that seven days a week anymore; maybe it’s five days, maybe it’s four days. Everything is now more expensive to provide,” Morton said. “Can I offer services as much as I was? They’re very hard choices, because the need for the therapy doesn’t then go away.”
The ripple effect of those decisions may cause third-party vendors who will be utilized less — or paid less — to rethink how much of their revenue should be nested in Medicare Part B.
Language Fundamentals vice president of business development Matthew McGarvey couldn’t specify what actions, if any, the private speech rehab provider will have to take as a result, but he did predict a move toward diversification away from Medicare Part B.
“In our case, it forces us to diversify our service line and try and find others to do business with, other folks in need of speech therapy service,” McGarvey said. “What if you’re the company that only works with nursing homes? Well, then you’re really in a pickle.”