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How to Prepare for the 8% Medicare Payment Cut


Although unfair and obviously frustrating, the 8% Medicare payment cut is coming in 2021. The rule is  technically still ‘subject to change,’ but it is still important for physical and occupational therapy clinic owners to prepare for the worst. At Prompt, we believe that if owners take initiative now and take the appropriate steps, the Medicare cut will be a non-issue by the time it rolls around.

Why The Cut?

Let’s not forget why all of this happening. CMS discovered that sixty-one percent of Medicare claims for outpatient physical therapy services did not comply with Medicare medical necessity, coding, or documentation requirements after reviewing 300 randomly selected claims. That meant that over a 6 month period, Medicare paid $367 million more than they should have for outpatient therapy services. CMS attributes this to its own lack of controls in preventing unallowable payments. Regardless, there were still obvious issues in the processes taken by many therapists across the country.

How to maintain performance

APTA’s message to CMS explained that significant cuts to fee schedule reimbursement for physical therapy providers will put challenging and likely unsustainable financial pressures on physical therapists.  As more PTs feel this pressure and opt-out of treating medicare beneficiaries – or close their doors altogether – patients will suffer.

In order to not be negatively affected financially, clinics must operate more efficiently, thereby increasing revenue and profit potential in other areas. That means billing more accurately and effectively, generating more inbound traffic, and improving all around efficiencies across the clinic.

Physical therapy deserves significant investment not cuts since it is the safest, and cheapest way to return to health and function and reduce future healthcare costs.

How Prompt Helps


Built-In Medicare Alerts

It is all too easy to pick up bad habits between billing and documentation which is why we have integrated guidelines, tips, and notifications along the way. Prompt’s built-in claim validation system helps you submit claims accurately on the first try, driving down accounts receivable and increasing the speed at which you get paid.

Better Billing Practices

With Prompt, there is no need to sign onto another system to send and receive claims which leads to less data entry and therefore less risk of error. Prompt processes your ERAs in real-time, notifies you of potential issues, and gives you an easy way to bulk post payments and charge patients in just a few clicks.

We have also made it a whole lot easier to track and collect patient balances. Prompt’s built in payment processor enables you to collect the balances when a patient arrives at the front desk or simply email them an invoice with a payable link.


Improved Patient Management + Better PT = More Visits

Prompt keeps patients coming back thanks to a combination of progress tracking, automated reminders, and home exercise programs. Patients are sent weekly progress reports that enable them to better understand how they are progressing through therapy in order to avoid “PT limbo.” Automated reminders are automatically sent both on the day before and the day of their visit to help ensure you stay well below the physical therapy industry’s average 14.1 percent no show rate. Home exercise programs sent in seconds directly from the flow sheet help to keep patients engaged when they’re not at your practice.

In addition, Prompt’s two-way integration with BetterPT means patients can easily find your clinic online and book appointments directly from your website with real time availability. Potential patients can search for clinics near them and easily learn more about your clinic, staff, and contact information. This helps to generate 1-2 new patients per month.

Prompt Staff

Prompt Therapy Solutions builds practice management software for physical therapy clinics ranging from single provider practices and startups, to large enterprise organizations.

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