The occupational therapy assistant (OTA) and physical therapy assistant (PTA) modifier with the payment reduction was officially implemented on January 1, 2022 for Medicare Part B payments. This payment differential is a 15% reduction in Medicare’s payment for services provided by OTAs and PTAs.
What Settings Uses the PTA/OTA Modifier?
The PTA and OTA modifiers apply to Medicare Part B outpatient therapy settings reimbursed under the Medicare Physician Fee Schedules. This includes all Med B providers except for critical access hospitals.
So if you’re in private practice, skilled nursing facilities billing Part B, home health billing Part B, CORF, rehab agencies, and hospital outpatient therapy departments that are not critical access hospitals, this applies to you. This also applies to hospital observation stays where the patient is seen in the ER or if they are never admitted as an inpatient.
This modifier does not apply to critical access hospitals, inpatient rehab facilities, home health billing Part A, skilled nursing facilities billing Part A, or inpatient hospital acute care services.
How is the Modifier Used?
A modifier is a billing code that is applied as a condition on your regular billing. This modifier is applied when a service is provided “in whole or in part” by an OTA/PTA. CMS defines in whole or in part as 10% of the billed service. However, they have clarified that it is 10% of the billed unit versus the entire therapy service for that day. Of note, the de minimis rule (10%) applies to timed and untimed codes.
CMS defines the CQ and CO modifiers as below:
- CQ Modifier: Outpatient physical therapy services furnished in whole or in part by a physical therapy assistant (PTA)
- CO Modifier: Outpatient occupational therapy services furnished in whole or in part by an occupational therapy assistant (OTA)
Attaching this modifier applies a 15% reduction to the Medicare Payment for the associated CPT code(s). In other words, OTAs and PTAs will be reimbursed at 85% of what an OT/PT would be paid for the same services under the Medicare Physician Fee Schedule (MPFS) when the modifiers are applied. Additionally, the CO/CQ modifiers must still be applied with the GO/GQ modifiers, or the claim will be rejected or returned by Medicare.
AOTA and CMS have thorough and clear resources that I highly recommend. I have linked them at the bottom of this article. At the end of AOTA’s article, they link a one-page reference guide that I recommend be distributed to staff for quick reference. You do need to be an AOTA member to access that one-page guide. If you aren’t an AOTA member, check out this article on why you should be.
How Medicare Calculates the 15% OTA Payment Differential
Medicare announced in their proposed rule the way they are calculating this 15% reduction is based on the amount Medicare pays vs. the entire payment. Remember, under Medicare Part B, Medicare pays for 80% of the service and the patient has a 20% copay. CMS used the following equation in the final rule.
20% + (80% * 15%) = 88% of total payment
So, in actuality, the payment reduction is 12% overall vs 15%. Now, we don’t know that supplemental plans won’t also implement a 15% reduction on the 20% copay, but thus far there has not been an indication that they will do so.
What Commercial Insurances require the CO/CQ Modifier
Commercial insurance plans have shown an increasing interest in implementation. of the OTA payment differential or use. of the modifier as time has passed. Humana implemented the modifier use in 2020 and along with Medicare implemented the 85% payment differential in 2022. As of December 1, 2023, Aetna is requiring the use of the CO and CQ Modifier for services furnished by an OTA or PTA AND is implementing a 15% payment reduction on both their commercial and Medicare Advantage plans.
Other payers that require the modifier but have not implemented the payment differential are United Healthcare and Tricare.
How Does the Reduction Impact Multi-procedure Billing?
Per CMS, “When therapy claims have more than one unit of a service or two or more “always therapy” codes, and they also have a CQ or CO modifier for each unit of code, the beneficiary’s deductible (where it applies) is calculated first, then the MPPR is applied to the Practice Expense relative value unit payment, and then the 20 percent coinsurance is deducted, as per the usual process. After that, the 15 percent reduction is taken for PTA/OTA services, followed by the 2 percent sequestration that is always last (when applicable)”
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Let’s start with a couple of easy examples
Example 1: The patient receives a 30 minute 97530 therapeutic activity therapy treatment which is 2 billable units of therapy. The Occupational Therapist provided the first 15 minutes of treatment and the OTA provided the last 15 minutes of therapy.
In this scenario, the first unit is billed without the CO modifier since it was provided by an OT the entire time. The second unit is billed with the CO modifier since it was provided entirely by the OTA.
Example 2: The patient received 20 minutes of 97530 therapeutic activity. 10 minutes were provided by the OT and 10 minutes were provided by the OTA.
In this scenario, there is not sufficient treatment time to meet the de minimis standard for 2 units of therapy. Since the OT and OTA provided the same amount of treatment time, then one unit furnished by the OT would break the tie and billed without the CO modifier since the OT provided the service independent of the OTA.
Using the De Minimis Standard for the OTA Modifier
The patient receives 30 minutes of 97530 therapeutic activity treatment, which is 2 billable units of therapy. The OT provided 25 minutes of treatment, and the OTA provided 5 minutes.
- In this scenario, the OTA modifier is NOT applied to either code because the OT met the de minimis standard for the 8-minute rule for the second code.
- Another way to think about it is that the OT provided at least 23 minutes of therapy, so the OT met the criteria to bill 2 units per the 8-minute rule without the minutes provided by the OTA. So, in this case, the minutes provided by the OTA are essentially not counted.
When determining the final 15-minute unit of a multiple unit billing scenario, the PT/OT meets the Medicare billing requirements for the 15-minute timed service without the minutes furnished by the PTA/OTA by providing more than the 15-minute midpoint (that is, 8 minutes or more, which is also known as the “8-minute rule”). In these cases, that final unit is billed without the CQ/CO modifier; and any minutes that the PTA/OTA furnishes in these cases would not matter for billing Medicare.CMS Billing Examples
A scenario where the de minimis standard does not apply
CMS also identified this scenario where the de minimis standard does not apply for using the OTA/PTA Modifier.
When there are two remaining units remaining to be billed, in which the PT/OT and the PTA/OTA each provide between 9 and 14 minutes of the same service for which the total time is at least 23 minutes and no more than 28 minutes. In these 13 cases, one unit is billed with the CQ/CO modifier for the minutes furnished by the PTA/OTA, and the other unit is billed without the CQ/CO modifier. The full complement of PT:PTA or OT:OTA time splits is: 9:14, 10:13, 10:14, 11:12, 11:13, 11:14, 12:12, 12:13, 12:14, 13:12, 13:13, 13:14, and 14:14.CMS Billing Example
CMS’ Example Summarized
The PT provides 12 minutes of 97110 therapeutic exercise, the PTA takes over and provides 14 minutes of 97110 therapeutic exercise, and the PT then finishes the treatment with 20 minutes of 97140 manual therapy. 46 minutes of total therapy is provided, which equates out to 3 billable units (38-52 minutes)
- Since the PT provided at least 15 minutes of 97140 manual therapy – the CQ modifier is not used
- The two units of 97110 consisted of 26 minutes with 12 from the PT and 14 from the PTA. Since the PT did not meet the de minimis standard to bill both units (which would be 23 minutes) the CQ modifier is applied to one unit of 97110 and one unit of 97110 does not have the CQ modifier.
- The last 5 minutes of the 97140 can be accounted for under 97140 but they do not count as billable minutes in this scenario.
Is your head spinning yet?
What if the OT and OTA provide a treatment together?
If the OT is the primary therapist providing the treatment and the OTA is present for assistance, the modifier DOES NOT need to be applied because CMS considers those services provided by the OT.
The American Occupational Therapy Association and the Physical Therapy Association introduced the Standardize Medicare Access to Rehabilitation and Therapy (SMART) Act of 2021 and the EMPOWER Act in 2023 as part of the 118th Congress.
The EMPOWER Act would…
- Standardizes supervision requirements for Medicare beneficiaries by removing the burdensome “direct supervision” requirements for OTAs/PTAs under Medicare Part B.
- Require the GAO to perform a study on the impact of the OTA and PTA payment differential for rural and medically underserved areas.
You can take action at aota.org/takeaction today. Don’t forget to edit the letter to tell YOUR story!
- AOTA: Humana Follows Medicare Policy and implements OTA Modifier
- AOTA: How to apply to OTA Modifier
- AOTA: Capital Report: Medicare OTA Payment Differential – Where we are and how we got here
- CMS Fact Sheet on 2022 Medicare Physician Fee Schedule
- CO/CQ Billing Examples from CMS
- Federal Register 2022 MPFS and other changes to Part B
- AOTA Video on how to use the modifier
- Amplify OT – How To Bill Occupational Therapy Under Medicare Part B
- Amplify OT – Medicare Physician Fee Schedule Cuts Part B OT Services
- Amplify OT – Medicare Part B in the Home Resources