April 1, 2013 will bring with it the application of the 2% Medicare Sequester and the increase of the Multiple Payment Procedure Reduction (MPPR) percentage to 50% on the practice expense (PE) component of subsequent CPT codes for outpatient therapies.

But what does it all mean?

2% Medicare Sequester – As sequestration applies to all Medicare Fee for Service providers, it will impact reimbursement for Medicare Parts A and B covered therapy services. All Medicare claims with dates of service on or after April 1, 2013 will have a 2% payment reduction applied to the Medicare reimbursed portion of the claim. Sites of service paid according to discharge as opposed to per diem rates will see the 2% reduction applied to discharges on or after April 1. The reduction occurs after any copays, deductibles and any other contractual adjustments are made.

While the sequester will reduce Medicare reimbursements through the end of this fiscal year – September 31, 2013 – it will not reduce rates. This means that any updates to Medicare reimbursement rates for next year will be based on current rates.

50% MPPR on Outpatient Therapies – The American Taxpayer Relief Act of 2012 increased the MPPR reduction of the Practice Expense component to 50% for all outpatient therapy regardless of setting. This provision will go into effect on April 1, 2013.

While the sequester and the changes to the MPPR are a concern to Medicare providers and therapists, at RehabCare our goal is to guarantee patients’ access to medically necessary therapy services so that we may deliver on our goal of hope, healing and recovery. By closely following the regulatory and legislative updates, we are able to navigate the changes and ensure a smooth transition to the new policies for our patients and customers alike.

By RehabCare