Medicare PTA/COTA Pay Cuts

Medicare will be reducing payments for PTA and COTA services in 2022 and future years. This cut is the result of a 2018 law repealing Medicare’s annual cap on PT/OT services using savings from reducing PTA and COTA payments.

Although the PTA/COTA payment cut is commonly referred to as a 15% cut, it is actually a 12% cut because it does not apply to coinsurance payments.

I have been asked whether it still makes sense to employ PTAs and COTA or have them treat Medicare patients given the pay cut. The short answers are yes and yes for the following reasons:

Because compensation for PTAs and COTAs is so much less than PTs and OTs, the excess of Medicare payments over provider compensation will almost always be higher for PTAs and COTAs than PTs and OTs. The table below illustrates this differential by showing PT/OT and PTA/COTA Medicare payments per work hour, annual and base compensation and the excess of payments over base compensation. As you can see, a typical practice will still net about $3 more per PTA/COTA hour than PT/OT hour.

As of now, the payment cut only applies to Medicare patients. Although some other payers, like Tricare and Humana, are expected to follow Medicare, they have not made any announcement to date.

PTAs and COTAs are generally easier to recruit than PTs and OTs. This has been true for the last 5 or so years and has only become more pronounced during the pandemic.

While it makes sense on paper to direct Medicare patients to PTs and OTs rather than PTAs and COTAs to avoid this pay cut, that may be self-defeating. Medicare billing rules require one-on-one care which is less costly with PTAs and COTAs. Directing Medicare patients to only PTs and OTs will often serve to reduce patient access and likely loss of patient visits and revenue. So, while it does make sense to schedule a patient with a PT/OT if the scheduler has open appointments at the same time for both a PT/OT and PTA/COTA, this is rarely the case in a busy practice. My recommendation is to instruct schedulers to book Medicare patient appointments with therapists if they have a choice; however, if only a PTA/COTA is available during the patient’s preferred time, book with the PTA/COTA.

Bottom line is that PT/OT practices have been dealing with pay cuts for years now and most have managed to maintain or even grow profits as the number of PT/OT patients increase due to demographics and other factors. The answer continues to be increasing the number of new PT/OT patients and continuing to provide valued care.