Things to Anticipate and Prepare for in 2015

The (three-disciplined) therapy-related service organizations in Texas have to be prudent in contemplating the future in 2015 and beyond. Proactive preparation is the most effective way to buffer the effects of fiscal, compliance, and  operational changes brought on by legislative and clinical policies. Here we list some of the more nuanced possibilities to look to in 2015.

  1. Legislative changes affecting the licensing, financing (reimbursement rates),  operational, and compliance landscape for therapists and therapy-related organizations: The 84th Texas Legislation convenes on January 15, 2015. In the last session, the 83rd made dramatic changes that affected the therapy business in Texas. In this session there is a potential for some key political players in the Lege to further change how therapy is rendered, paid, and reimbursed for Medicaid-related services. One of the changes anticipated is a call to require that therapists be certified/accredited separate from their respective state license, in a similar way that therapy organizations are certified to render Medicaid therapy services. Additionally, there is some movement (as was attempted in the last session) to further harmonize the reimbursement schedules across all therapy services delivery models, (i.e., home health, ORF/CORF, general rehabs/individuals). Next, the Texas Sunset Committee during a scathing review of HHSC this past summer, anticipates a reorganization of HHSC, including the manner in which the OIG conducts its business. This coupled with the recent troubles HHSC has had in their contracting processes, may mean some changes are under way in how the OIG will investigate future Medicaid fraud. The Legislation is also due to review the MCO managed Medicaid programs and their respective behavior in collecting and managing reimbursements and profits. This could have far-reaching affects as to how managed Medicaid reimbursement discount rates for therapy services will be implemented during re-enrollment periods in 2015.
  2. Managed Medicaid scenarios: the managed Medicaid organizations that are in place in regions of Texas are slated to start some of their re-enrollment periods. What this means is that they will be reassessing their therapy network coverage and individual provider performance and expertise in contemplating their re-enrollment options. Additionally, their reimbursement discount rates may fluctuate based on regional coverage, network availability, and provider competence in displaying measurable outcomes and results. More of these MCOs will be demanding more stringent requirements for pre-authorizations, claims billing, and client eligibility, as well as more comprehensive therapy-clinical documentation. At some point in this reimbursement scenario, discount rates will increase to the point where, in some cases, the therapy managed Medicaid reimbursement will be on par with or less than the corresponding full Medicare rates. This will be a tipping point for the Medicaid therapy industry in Texas. These MCO discount rates are applied to the current Texas Medicaid Fee Schedule (TMFS) for therapy services and as such, are directly dependent on any legislatively mandated changes to Medicaid therapy services reimbursements to HHSC. Hence, if one expects a x% rate reduction (i.e., [1-x]% discount rate) in the therapy TMFS, and a y% decrease in an MCO’s proposed discount rate from a current discount rate of y1%, then the overall change to your managed-Medicaid schedule will be a [x + y(100 – x) / y1]% rate reduction or a new effective discount rate of {100 – [x + y(100 – x) / y1]}%.  Lastly, the trend, at this point, with MCOs, will be to require some sort of legitimate certification/accreditation for therapy organizations, including individual therapists.
  3. Therapy-based EMRs (in some cases EHRs) will become more prominent as more vendors enter into that part of the provider universe and as CMS and/or HHSC require electronic documentation for timely reimbursement. The national therapy boards (ASHA, AOTA, APTA) have been pushing CMS hard to open up the eligible provider requirement to therapists. This is only a matter of time and if it happens in 2015, then therapists will be eligible for Medicare EHR-incentive bonuses, in addition to the limited PQRS bonuses that they currently qualify for. See our last conference talk on the PQRS program for therapists. Again, this would mark a tipping point for the therapy industry as it would present an alternative clientele for many pediatric-only therapy services organizations wishing to diversify in order to survive an impractical managed Medicaid reimbursement decrease.
  4. ICD-10 is again on a delayed fuse, this time for October 15, 2015. However, many organizations have been preparing for it for a couple of years now through the use of updated therapy EMRs, internal training, and billing updates with their respective billing vendors and staff. If one has not done any preparation for ICD-10, this is your second (or third) chance and it should have started already. ICD-10 changes will be slightly less onerous for therapists than for physicians. Nonetheless, diagnoses schedules must be accommodated for and billing processes changed to accept and interpret those more detailed and distinguished diagnosis codes and descriptions appropriately.
  5. The 2015 CMS Medicare Reimbursement Schedule for therapy CPTs varies from 1% to 5% decreases from 2014 rates. While the reimbursement formulary conversion factor (CF) decreased very slightly, other formulary factors lead to overall low single-digit percent decreases. The annual therapy caps were increased by $20 ($1,940). The PQRS incentive rate stays at 0.5%. However, the number of required PT/OT reported individual measures to avoid a 2% 2017 penalty, will increase from 3 to a maximum of 9. PQRS incentive rates will be phased out at the end of 2015. All these rules will be in effect until March 31, 2015, and will be extended to the rest of the year only if Congress acts to extend them. Otherwise, the reimbursements will decrease dramatically with a formulary CF decrease of 7.58. See and for details.