It seems as if therapy services are an ever evolving world, not only is there constantly new research and studies out there proving which exercises you should and should not be having patients perform, based on their injury or diagnosis, but it appears as if every time we turn around, there is some new insurance change.
This year is no different in that patients who have Medicare insurance, either part A or part B, have a new deductible they must meet before their coinsurance will begin. Before treating your patients, it is extremely important they understand their benefits and why physical, occupational, or speech therapy is important for them, especially as their deductible increases. When a deductible increases, it means the patient is having to pay more out-of-pocket costs until their deductible has been met. Given the current state of the economy and everything going on in the world, paying more out-of-pocket might be a hardship for some patients so ensuring patients understand what they are responsible for is crucial.
As you know, Medicare insurance has several different parts to it. The main ones we tend to focus on for therapy services are Part A and Part B. The reason for this is because Part A covers hospital, home health services, hospice, and skilled nursing stays while Part B covers outpatient physical therapy services. Let’s begin with Medicare Part A. In 2021, the deductible for Part A services is $1,484 which is an increase of $76 from $1,408 in 2020. This amount covers the patients’ share of costs for the first 60 days of a Medicare-covered inpatient hospital stay, during a benefit period. In addition to the $1,484 deductible, the patient will also be responsible for coinsurance charges, depending on how long and where the patient is staying. The nice thing about Medicare Part A is that 100% of the costs are covered for up to 60 days in the hospital and 20 days in a skilled nursing facility. However, when patients require a longer stay then the costs can quickly add up. If a patient stays more than 60 days in the hospital, from day 61- day 90, the patient will be responsible for paying $371 coinsurance each day. If a patient has to stay longer than 90 days, starting on day 91, the patient is responsible for paying $742 coinsurance per day. Now if the patient is transferred to a skilled nursing facility for more long term care, the patient is able to stay in the SNF for 20 days before having to pay coinsurance. Beginning on day 21 of the individual’s stay, the patient is responsible for paying $185.50 per day. While there are benefits to having Medicare Part A, hospitals and skilled nursing facilities can be quite expensive.
Focusing on Medicare Part B, which covers outpatient physical therapy services, the 2020 deductible was $198, so just under the $200 mark. For 2021, the annual deductible for Medicare Part B has increased by $5 and is now $203. Once the $203 deductible is met, patients typically pay 20% of the Medicare-approved amount for most doctor services, including all therapy services.
In more layman’s terms, once a patient has had enough doctor and/or therapy visits in 2021, to where they have paid a total of $203 out-of-pocket, then Medicare will cover 80% of the cost of their remaining services for the year. Once the Medicare benefits kick in, then the cost of therapy services will reduce significantly and patients will be paying far less out-of-pocket. Another unique change with Medicare is that there is no longer a cap on outpatient therapy, speech therapy, or occupational therapy services. Instead the cap has been renamed as a “threshold” and if the therapist can prove that continued care is medically necessary, through their documentation and Medicare approves, then you, as a therapist, can go over the threshold for that patient. The 2021 thresholds for outpatient physical therapy and speech-language pathology, combined, is $2,080 and the threshold for occupational therapy is $2,080.
Insurance itself can be a very slippery slope and many patients do not fully understand their benefits or what they mean which is why your physical therapy office plays an important role in ensuring each patient, individually, understands their specific benefits. As a physical therapist, depending on someone’s insurance, it might come down to you placing a greater emphasis on patient education, during the initial evaluation, so that your patients will continue to show up, especially if the patient has not met their Medicare Part B deductible for the year. While insurance tends to not be a highlight of being a physical therapist, it does play a vital role in making sure our patients are receiving the correct amount and level of care they deserve.