Medicare Reimbursement Reduction for Physical Therapy Services
January 08 2013 - 3:15PM
Business Wire
U.S. Physical Therapy, Inc. (NYSE: USPH), a national operator of
outpatient physical therapy clinics, announced that the American
Taxpayer Relief Act of 2012 signed into law last week includes
provisions which will reduce reimbursement for physical therapy
services provided to Medicare patients.
In 2011, Centers for Medicare & Medicaid Services (“CMS”)
adopted a multiple procedure payment reduction (“MPPR”) for therapy
services. Under MPPR, the Medicare program pays 100% of the
practice expense component of the Relative Value Unit (“RVU”) for
the therapy procedure with the highest RVU and then reduces the
payment for the practice expense component of the RVU for
additional procedures. In 2011 and 2012 the reduction applicable
for subsequent procedures provided in outpatient physical therapy
clinics was either 20% or 25% depending upon the clinic’s Medicare
certification. The new law increases the MPPR reduction for
subsequent procedures to 50% effective April 1, 2013.
In 2012, Medicare patients accounted for approximately 23% of
U.S. Physical Therapy’s total physical therapy patient revenue. The
Company’s management estimates that the impact to the Company’s
average net reimbursement for Medicare patients will range from
approximately $8.00 to $10.00 per Medicare patient visit. The
effect to the Company’s overall average net rate per visit,
including all Medicare and non Medicare patients, is estimated to
be a $1.84 to $2.30 per visit reduction. U.S. Physical Therapy
reported an overall average net rate per visit, including Medicare
and non Medicare patients, of $105.31 for the first nine months of
2012. The estimated net income impact to the Company from the rate
reduction is $1.6 million to $2.1 million or $.13 to $.18 in
diluted earnings per share in 2013.
Chris Reading, Chief Executive Officer, said, “Our team is
working real-time on a number of initiatives in order to mitigate
the impact of this unfortunate Medicare reimbursement reduction.
This is a significant challenge but one that I am confident
that we can ultimately overcome. The impact of this change
will be felt across the outpatient rehabilitation industry and will
be especially difficult for less well-resourced providers.”
About U.S. Physical Therapy,
Inc.
Founded in 1990, U.S. Physical Therapy, Inc. operates 431
clinics in 43 states. The Company's clinics provide preventative
and post-operative care for a variety of orthopedic-related
disorders and sports-related injuries, non-surgical treatment of
osteoarthritis, treatment for neurologically-related injuries and
rehabilitation of injured workers. In addition to owning and
operating clinics, the Company manages 15 physical therapy
facilities for third parties, including hospitals and physician
groups.
More information about U.S. Physical Therapy, Inc. is available
at www.usph.com. The information included on that website is not
incorporated into this press release.
US Physical Therapy (NYSE:USPH)
Historical Stock Chart
From Jun 2024 to Jul 2024
US Physical Therapy (NYSE:USPH)
Historical Stock Chart
From Jul 2023 to Jul 2024