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Medicare Part B MPFS

Use Medicare Part B MPFS when outpatient therapy reimbursement follows the Medicare Physician Fee Schedule payment approach.

This guide explains how to configure Medicare Part B MPFS payor arrangements and facility contract payment terms in RehabAlpha. For the Medicare payment methodology, including service units, MPFS rates, MPPR, assistant reductions, coinsurance, and sequestration, see How Medicare Part B calculates outpatient therapy payments.

Before you start​

A payor arrangement estimates what the payor reimburses the billing provider. A facility contract payment term estimates what the facility pays your therapy organization. Configure each separately; their settings do not carry from one to the other.

For a payor arrangement, create the payor with Medicare Part B MPFS selected as its payment model. A payor's payment model cannot be changed after the payor is created.

For a facility contract, the Medicare Part B MPFS contract payment model can apply to payors using Custom fee schedule, Duration-based payment, or Medicare Part B MPFS, but not PDPM case-mix per diem.

Set up a payor arrangement​

  1. Open the payor.
  2. Click Payor arrangements.
  3. Click New payor arrangement.
  4. Enter the arrangement period and choose the billing providers it applies to.
  5. Under Payment details, choose whether to include MPPR.
  6. Choose whether to include the assistant payment reduction when a CO or CQ modifier applies.
  7. Choose whether to include sequestration on Medicare's portion of the final allowed amount.
  8. Click Save.

Configure the payment details​

The arrangement uses CMS Medicare Physician Fee Schedule data. Configure these settings to match the payor's reimbursement terms:

SettingWhat it controls
Include MPPR?Whether the arrangement applies Multiple Procedure Payment Reduction.
Include assistant payment reduction?Whether the arrangement applies the assistant payment reduction for services with a CO or CQ modifier.
Include sequestration?Whether the arrangement applies sequestration to Medicare's portion of the final allowed amount.

All three reduction settings are on by default. With sequestration included, the expected collected revenue combines the 20% patient responsibility with 98% of Medicare's 80% portion. For how these settings affect individual service dates and revenue estimates, see How Medicare Part B calculates outpatient therapy payments.

Set up a facility contract payment term​

  1. Open the facility.
  2. Click Contracts.
  3. Click New contract.
  4. Enter the contract dates and add a contract payment term.
  5. In Step 1: Choose how the facility pays [your organization name], select Contract payment model, and then select Medicare Part B MPFS.
  6. In Step 2: Choose payors, choose all eligible payors or filter them by payor type or specific payors.
  7. In Step 3: Configure the contract payment model, enter the Therapy organization revenue share percent and choose whether to include MPPR, the assistant payment reduction, and sequestration.
  8. Click Save.

Configure the contract payment model​

The contract payment model always uses CMS Medicare Physician Fee Schedule data, even when a selected payor's payor arrangement uses an organization fee schedule. Configure the contract's settings to match the facility agreement:

SettingWhat it controls
Therapy organization revenue share percentThe percentage of the contract's resolved Medicare Part B revenue that the facility pays your therapy organization.
Include MPPR?Whether the contract applies Multiple Procedure Payment Reduction.
Include assistant payment reduction?Whether the contract applies the assistant payment reduction for services with a CO or CQ modifier.
Include sequestration?Whether the contract applies sequestration to Medicare's portion of the final allowed amount.

All three reduction settings are on by default. The settings are independent of any payor payor arrangement settings. For the order in which the underlying Medicare adjustments and revenue amounts are resolved, see How Medicare Part B calculates outpatient therapy payments.