9% Medicare Paycut for Outpatient Therapy? (and what to do about it)

Last Friday, something important happened in Washington DC.

Automatic spending cuts were triggered, cuts that will lead to a reduction of $11 billion in payments to healthcare providers (including physical therapists) for a variety of services.

That equates to a 2% reduction in Medicare payments.

It’s very, very likely that private insurers will follow soon.

Not many people are happy about it. In fact, President Obama’s exact words were “Forced budget cuts are dumb”

Patients will feel the impact.

There are 47 million Medicare patients in the United States (15% of the population) and soon, they may have a tough time finding providers.


The more Medicare patients in a practice, the lower the profit margins, the greater the hit on the practice.

Such practices may be forced, out of necessity, to turn away some Medicare patients.

Here’s the real tipping point.

The Medicare Multiple Procedure Payment Reduction (MPPR), set to go into effect on April 1, 2013 (despite the best efforts of the APTA) will result in a 6-7% decrease in payments for outpatient therapy services unless Congress takes action to stop it.

We already suffered a 6-7% payment cut in 2011.

Bottom line?

In 2013, the combination of the federal payment cuts and MPPR could lead to a FURTHER 9% cut in Medicare payments. PTs aren’t the only ones affected.

According to Dr. Jeremy Lazarus, president of the American Medical Association in an article on CNN:

“Over the last 12 years, Medicare payments to physicians have increased by only 4%, while the cost of providing care has jumped 20%”

In fact, Congress has blocked Medicare payment cuts from happening more than 20 times in the past 10 years.


Asking members of Congress to delay implementation of MPPR is a start.

But what you really want to do is to take a deeper look at your business model and re-engineer it to keep growing.

In fact, it’s pure insanity to ignore this.

I’ve decided to do something about this, with specific ACTION STEPS, and you have a chance to benefit.


In this webinar on Thursday, March 14 at 5 pm EST, you will discover techniques for:

  • Intelligent billing: The how and why of (legitimately) billing codes with the highest practice expense value
  • Strategic timing: How treatment duration can affect your payments
  • Income diversification: How to improve your business model to increase lifetime patient value
  • Medicare dependence reduction: Ways to reduce your depedence on Medicare and private insurers
  • MPPR repercussions: – How to calculate the impact of MPPR in your practice and plan ahead.

Click here if you want to register for this 45 minute webinar followed by 15 minutes of QA.

If you can’t attend it, the recording will be made available to you.

Let’s combat external forces by staying innovative.


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Leave A Reply (5 comments So Far)

  1. Kevin Mallard, PT
    1 year ago

    As if we do not have enough challenges with the present economy, they have to spring this MPPR on us. I know how this will negatively impact private practice and I was prepared for the worst.

    When I read this blog, I was unbelieving at first. A way out? But then again, your track record proves that your strategies have always worked and so once again, I put my faith in you. I have already registered for the Medicare Combat 101 webinar. I am willing to fight this new enemy.

  2. Melinda Smith
    1 year ago

    I am quite alarmed by this development. Over 35% of my patients are Medicare patients! This will surely affect my business and my cashflow! I can certainly use ideas on how to maximize Medicare billing and start going for private insurers. I know this affects a lot of us but my practice cannot afford further cuts in Medicare payments!

    I am not going to sit by and let this happen to my practice either. I will be joining the webinar and I really hope it can help me deal with this recent Medicare issue.

    Thank you!

  3. Joshua Keller
    1 year ago

    I started reducing my Medicare patients back in 2011. Medicare used to be my main source of revenue and it was going really great until they started implementing payment cuts. I had to plan and make changes so my dependency on Medicare would gradually decrease. It was hard work since I had to find new sources of referrals (private insurers).

    Now it is paying off. Although my practice is still going to get a beating from the new cuts, I am now in a position to weather this. It would have meant my survival if I had not acted when I did. But, there is always room for improvement so sign me up for this webinar!

    Thank you!

  4. Roslyn Bell
    1 year ago

    If only all patients pay in cash, then they can have all the Medicare cuts they want. But that is wishful thinking. In the real world, Medicare is here to stay. I was ready to grin and bear the consequences of this new challenge when a friend from New Jersey told me to read this blog. After I read the blog, I did some research to make sure this is not just another marketing scam. Another friend who attended your retreat in Vegas last year assured me that your strategies work and he has also registered for the webinar on March 15.

    Count me in, Nitin.

  5. Dirk Keller
    1 year ago

    I never turn away Medicare patients because I feel it is my moral responsibility as a physical therapist to treat and care for people regardless of their financial status. But I have to admit, it's hurting my business and with this new Medicare cuts, I would be feeling the crunch much more.

    I was in a dilemma because whichever way I would go will not be good for me. I am so thankful that you can offer another option for me who wants to continue taking in Medicare patients while keeping my business profitable.

    If there is such a good time to invest in something, this is it.


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