How the 2025 Medicare Physician Fee Schedule Proposed Rule Impacts Physical Therapists

The 2025 Medicare Physician Fee Schedule Proposed Rule brings mixed news for physical therapy and rehab therapy professionals. Physical therapists need to understand the details of these changes to navigate the complexities of the Medicare proposed rule 2025. Particularly with regard to the conversion factor, therapy thresholds, POC certification and supervisory protocols.

Conversion Factor Reduction

In 2025, the Medicare Physician Fee Schedule (PFS) will experience a notable adjustment in its conversion factor, a key component that influences reimbursement rates across various specialties, including physical therapy. The proposed conversion factor is set to decrease to $32.36, a reduction from the previous year's $33.29. This change primarily results from the expiration of a temporary 2.93% increase granted for 2024, effectively returning the conversion factor to its baseline level from earlier in 2024.

Increased therapy threshold

New Threshold

For the calendar year 2025, the Centers for Medicare & Medicaid Services (CMS) has proposed an increased therapy threshold amount, setting it at $2,410 for both physical therapy and speech-language pathology services combined, as well as for occupational therapy services individually.

KX Modifier

The threshold amount of $2,410 is not a cap but rather a marker, indicating when additional documentation is necessary. Physical therapists or billers must affix the KX modifier to claims for services exceeding this threshold to signify that the continued treatment is medically necessary. This documentation must justify the need for extending therapy services beyond the set threshold, ensuring compliance and facilitating appropriate Medicare reimbursement.

Changes to plan of care certification

In 2025, the Centers for Medicare & Medicaid Services (CMS) is set to introduce significant amendments aimed at reducing the administrative burdens associated with the certification and recertification of treatment plans. These proposed changes allow for an exception to the requirement for a physician or non-physician practitioner's (NPP) signature on the initial certification of a therapist-established treatment plan. This exception is applicable when there is a written order or referral from the patient’s physician/NPP already on file, and the therapist has documented evidence that the treatment plan was transmitted to the physician/NPP within 30 days of the initial patient evaluation.

Largely seen as a positive change, these adjustments are designed to streamline processes, ensuring that physical therapists can focus more on patient care rather than administrative compliance.

PTA and OTA Supervision

In 2025, we'll see a big change in how Physical Therapist Assistants (PTAs) and Occupational Therapy Assistants (OTAs) are overseen. The Centers for Medicare and Medicaid Services (CMS) plans to switch from direct supervision to general supervision in outpatient settings. This shift aims to boost flexibility and make therapy services more accessible in rural and underserved areas.

General Supervision

Under the new rule, PTAs and OTAs will no longer require the physical presence of a supervising Physical Therapist (PT) or Occupational Therapist (OT) within the office suite. Instead, general supervision will suffice, where the PT or OT must be available for consultation but does not need to be on-site.

CQ and CO Modifiers

With changes in supervision, using CQ and CO modifiers has an impact on billing. These modifiers show when PTAs and OTAs or provide services. Since 2020, CMS requires these modifiers on claims for services meeting the de minimis standard. This applies when an assistant's work goes beyond 10% of the total service time. This rule makes sure billing is correct and follows Medicare rules. It also protects proper payment for services that assistants provide.

Conclusion

The proposed changes signal a time of adjustment and planning for PTs and clinic staff. As the lower conversion factor points to a tighter budget, the higher therapy threshold, updated certification and supervision rules show a move towards better operations and less paperwork. These shifts together, highlight the need for physical therapists to stay flexible, up-to-date, and quick to respond to changing healthcare policies. Taking on these changes with a smart approach will be key to keep physical therapy practices running and to continue providing top-notch care within Medicare's rules..

2025 Medicare Physician Fee Schedule FAQs

What is the function of the Medicare Physician Fee Schedule?The Medicare Physician Fee Schedule (PFS) serves as the main payment system for health care providers who are enrolled with Medicare. It is used for the payment of professional services by physicians and other health care providers in private practices, as well as for services that are incidental to the physician’s services, excluding certain drugs.

How is the Medicare fee schedule conversion factor determined for 2025?For the calendar year 2025, the proposed Medicare Physician Fee Schedule (PFS) conversion factor is $32.36. This represents a decrease of $0.93 or 2.80% from the 2024 conversion factor of $33.29, as stated by the Centers for Medicare & Medicaid Services (CMS).