‘We’re Hurting Big Time’: Medicare Therapy Cut Worsens SNF Staffing Crisis, Care Access

Nursing home residents, staff and company leadership in the physical therapy space are already seeing a bottleneck in access to care, driven by cuts to the Centers for Medicare & Medicaid Services (CMS) Physician Fee Schedule (PFS) that went into effect three months ago.

One significant cut among Medicare Part B physical and occupational therapy rates is a 15% reduction in reimbursement for services provided “in whole or in part” by physical therapist assistants (PTAs) and occupational therapy assistants (OTAs).

Mark Besch, senior specialist of government affairs and analytics for Aegis Therapies, said the cut adds a “layer of complexity” when a contract therapy provider needs to determine who will be going into a facility on any given day.

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Sometimes, a PTA may be the only person available to provide physical therapy services on a given day or location, Besch told Skilled Nursing News.

Losing such resources takes away flexibility among providers and their staff, in terms of creating the right care team for the right patients, or for a particular facility, according to Cynthia Morton, executive vice president at the National Association for the Support of Long-Term Care (NASL).

“Organizations have to make decisions about whether we’re going to be reimbursed less for this treatment. Can we still pay the staff the same amount that we’ve been paid out? Every organization is going to respond to that differently,” said Besch.

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Martha Schram, president and CEO of Aegis Therapies, said federal reimbursement cuts lead to assistants questioning why they would want to work in this type of reimbursement environment – if they work in a hospital or a school as a therapy assistant they may not be facing the same kind of job insecurity.

“Our recruiters are hearing this question, and there are a lot of options,” said Schram, as Aegis’ open positions for therapy assistants continue to increase. “I don’t think we can overemphasize the morale impact of all this. It amplifies the difficulty in attracting people to this sector.”

Reducing employee pay or reducing the number of assistants employed by a therapy provider is one tactic –but not one used by Aegis, Besch said.

Coupled with flexibility is the ongoing staffing crisis that has seeped into every service in long-term care, including therapy services.

“We’re seeing so many therapists really leave the sector, not just assistants, but therapists in general,” added Morton. “This decreasing amount of money available to pay the care team and have the right team there, it’s really constraining that ability to have your care team meet the patient.”

The nursing home industry has lost 2,500 jobs in March alone, and 241,000 workers since the start of the pandemic; that’s 15.2% of its total workforce, according to a report published by the U.S. Bureau of Labor Statistics and highlighted by the American Health Care Association and National Center for Assisted Living (AHCA/NCAL).

The Medicare Part B cut gets more complicated when providers consider the latest CMS proposed rule for SNFs – the rule includes a 4.6% cut to the Patient-Driven Payment Model (PDPM), a $320 million loss, slightly offset by a 3.9% increase to the industry.

NASL is working with Congress to pass the SMART Act, or HR 5536, which would delay the 15% cut – and exempt rural and underserved areas from the cut – as part of the next large funding vehicle due to pass in September.

Cuts create ‘double-edged sword’

Therapy providers, both in-house and contract providers like Aegis, are put into a tough position, figuring out the right balance between access to care, balancing the budget and keeping staff happy during a historic labor crisis.

“That’s kind of a double-edged sword … how do we fulfill our commitments, what we feel is our commitment to the individuals, the patients that are in our care and fulfill our commitment to our staff?” said Besch.

Christie Hinrichs, president and CEO of nonprofit operator Tabitha Health Senior Care in Nebraska, said leadership is still trying to determine the full impact of the therapy assistant cut for its residents and staff.

“Cuts of any kind in the service industry are absolutely going to cause damage to the work that we’re doing,” Hinrichs told SNN. “We are already in such a shortage from a reimbursement perspective and then combine that with the workforce shortage that so far has been really driven by this unsustainable chase for money and wages.”

Under current reimbursement structures, further cuts are not a sustainable strategy, she said. Tabitha offers in-house physical therapy between its three campuses, which have a continuum of care structure including home health, hospice, assisted living and small home settings.

Aegis has a “couple levers” it can pull, Besch said, with the director of rehabilitation paying close attention to who is assigned to which patient, ensuring appropriate reimbursement while matching the right care team to the patient.

Facilities “lose flexibility in a hurry,” he said, when a location might not have the right therapy staff on hand, or the right people aren’t on premises every day.

Aegis has had situations where therapy assistants are able to work, but because of limited licensed therapist availability they were not able to pick up a shift.

“We would be out of compliance with the supervision requirements,” Besch said. “Imagine that complex addition, there’s so many different layers here.”

Still, Aegis has not had to cut any PTA staff due to the 15% reduction in reimbursement.

Even medical supply companies offer therapy assistants a chance to still work in the health care industry without having such instability, she said.

That leaves licensed therapists to pick up the load – they’re not easy to find, Schram said, and they are paid more for their skill level.

“Ultimately, the cost of care goes up,” added Schram.

Facilities and therapy providers are really having to consider their patient mix more closely, Morton said, as a result of cuts to Part B services. Some commercial plans have already started paying less for therapy assistants, Besch added, following CMS’s lead.

On the patient end, people are waiting longer to get care. Individuals are waiting to get evaluated before they can even start with a care team, according to Morton.

“If they’re in the SNF, there’s a couple days where they haven’t had access to the needed care to optimize the length of stay,” Schram said. “It’s this big picture, the total cost of all of this.”

Compounding cuts

Cuts to Medicare Part B over the course of six to seven years have compounded the problem, Besch and Schram said, further magnifying that sense of insecurity for therapy assistants in the space.

Multiple procedure payment reductions have been around the longest – if a nursing home resident needs to see the physical therapist multiple times a day, each subsequent visit has to be billed for less under this rule.

“We may have had to greet the patient three times because there were three separate visits. It wasn’t like somebody’s driving to a clinic, especially in a skilled nursing facility,” Besch said. “It’s one unit per day and everything else gets discounted. It’s discounted about 15 or 18%, depending upon the unit, so there’s another 15%.”

In recent years, CMS has consistently been reducing reimbursement for therapy codes under the PFS. Original recommendations have consistently been reduced from 6%-8% to only 3% each time, but those are negative figures, Besch said, and those numbers add up.

“You’re in the 30%-40% range pretty quickly, and what business wants to operate when your revenue declines 30%-40% over the last five years,” Besch said.

Little cuts over an extended period of time increase stress on the therapy workforce and ownership, Besch added.

“That’s not a business that people would aspire to, to expand, and yet the needs of individuals, of residents, patients who called you haven’t changed,” he added. “The cost of labor hasn’t gone down. That’s that piling on phenomenon that we’ve just continued to endure.”

Unable to delay the 15% cut as part of the federal omnibus spending bill Congress passed several weeks ago, NASL is working to get it included in the next large funding vehicle due to pass in September, Morton said.

While a delay in September would only give providers a few extra months – the cut would be delayed to Jan. 1 2023 – another major aspect would exempt rural and underserved areas from the cut.

“We’re still pushing for this legislation because we’re hurting big time. We will continue to work for relief even if it takes all year. We’ve got about 29-30 co-sponsors on the bill, we could certainly use more and we’re seeking to get more onto the bill,” said Morton.

Rep. Bobby Rush (D-Ill.) is primary sponsor for the bill.

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