Back to the Future in #physicaltherapy

Hey All Things #PhysicalTherapy”! Let’s hop in the DeLorean for a standalone treat — a 2006 post I wrote 19 years ago, when I was already over CMS’s nonsense and the PT purity police. Back then, a loud faction swore anything but one-on-one care (co-treatment, groups) was heresy, despite practice acts allowing supervision and delegation. Fast forward to 2025: they’re still out there — consultants, academics, and facility PTs hiding behind provider-based billing, clutching pearls while the rest of us drown in reality. Here’s the past-me rant, updated with 2025 numbers and my undying sarcasm. Enjoy!

The Setup: CMS, Stopwatches, and a Productivity Plummet

In ’06, I fired this off after 15 emails about “the math” from my May 13 post on pricing confusion. The issue? CMS’s restrictive rules were capping PT salaries at $60K. Today, it’s worse — productivity’s tanked, and we’re bleeding clinicians (see my shortage rants). CMS and their Medicare Advantage cronies, with gems like the “rules of 8” (not the “8-minute rule” — a typo from hell), turned us into stopwatch slaves. Private payers piled on, and now elderly patients can’t get care in some markets because the “business” of PT is a sick joke. The ’06 math, bumped to 2025 (below), barely moves — inflation-adjusted, it’s less. A Medicare-only PT might hit $75–90K now; add the reality of Medicare Advantage or private clones, and the scenario today is far more likely than in 2006.

2006 Post: The Math of Misery
This is for the 15+ folks who emailed me about “the math” from my May 13 post on pricing confusion. My point? CMS’s restrictive guidelines slap a salary cap on PTs — around $60K back then. Let’s break it down.

Before I get to “the math”, let me make a few points of distinction:

-my beef is not with RBRVS in and of itself. The methodology is actually quite sound. We might disagree with the weightings but the rational is appropriate and much, much better than number of various valuing systems in place prior to RBRVS or the even more inappropriate per visit rates that I have seen. In fact, we have input into RBRVS thru our involvement in practice surveys and feedback.

-my beef is the entire notion that concurrent treatment is bad, unethical, illegal per the mentality of CMS per their superimposed rules. Even though the CPT codes had definitions, CMS sought in their infinite wisdom to further define them in terms of what cannot be billed when you use certain codes and under a variety of different clinical situations, essentially mandating the use of stopwatches during the course of treatment, creating a whole new definition of “group therapy. side note: I still find it absurd that if you are applying manual therapy techniques to one patient and another CMS patient is exercising on the bike that both patients should be billed as group therapy!

Now, for the math.

The assumptions:

– therapist is treating only CMS patients or those that follow the CMS guidelines (e.g. Tricare, CHAMPUS)

-following the rules, all therapy is one-on-one/direct with no concurrent patients (by the way, if the whole notion that concurrent therapy does not produce appropriate outcomes, wouldn’t they follow this in an NFL training room where cost is not a factor and outcome is the only benchmark?)

What started as an economic model to accurately determine the relative weight of some 8000 CPT codes has evolved into a counter-productive practice model based on unwarranted assumptions related to patient care and quality outcomes.

I believe we have lost our way.

CPT definitions of one-on-one have been translated into CMS reimbursement guidelines.

And what’s so profoundly disturbing is that so few seem to realize the foolishness of the “rules” and how the future of the profession is being negatively impacted.

Now let’s look at the economics:

-the therapist bills an average of 3.5 units per patient

-therapist sees the equivalent of 7 hours worth of patients per day (3.5 units x 7). Because all therapy to these patients is 1 on 1, there is no overlap in scheduling as the group therapy would further reduce the hourly rate

-therapist works 5 days a week and we allow for 47 work weeks a year (5 weeks off includes vacation, holidays, sick time, cont educ, professional meetings, etc.)

-the other components of RBRVS (e.g. practice expense, liability expense) are adequate to provide all overhead which includes billing/collections, accounting, HR, advertising, etc. There are few people that believe that the non-work components can actually cover these components Using RBRVS which would even make “the math” wildly optimistic.

-you will have a 10% no show/cancellation average which is probably a little low for medicare population

-you get no support staff help in any way in the clinic including cleaning, set-ups, etc.

I had an analysis done of the top CPT codes billed to CMS and I used the work component of these procedures as the compensation that a therapist would make. The top codes in order with their work components:

RBRVS values for each procedure include a comprehensive breakdown of the expenses (resources) required to deliver the service. If we look at just the ‘work’ component we see the maximum income a therapist can generate per procedure:

Therapeutic exercise $17.05

Therapeutic activities $16.67

Manual therapy $16.30

electric stim $6.82

(side note: group therapy is around 10.00).

So a typical treatment consisting of 3.5 units would generate about $50 for the “work”. That’s $50 per hour TOTAL including benefits, taxes, etc.

Applying this assumption, total compensation would be about $57, 000 per year.

That’s the MAXIMUM earning capacity of a therapist under the Medicare model in an outpatient setting. You can derive the same math by using 30–35% of total generated net revenue (collections) as the payment to the PT. In either scenario, the earnings power for PT has been drastically reduced victimized by reimbursement under medicare RBRVS and the artificial reduction in productivity due to the superimposed rules.

addendum to post:

2025 Update: Same Circus, New Tent

Here’s the 2025 RBRVS facelift (national averages):

• Therapeutic Exercise: $25.35
• Therapeutic Activities: $28.97
• Manual Therapy: $22.38
• Electrical Stimulation: $13.82
• (Group Therapy: $15.47)

Same grind — 3.5 units (~$75/session) x 7 hours x 5 days x 47 weeks = ~$75K or below the starting salary in most markets. Inflation since ’06 (60%) says $57K then should be $91K now. We’re shortchanged! Mix in Medicare Advantage or private payer mimicry, and it’s worse than ’06. We are one of the few professions whose productivity today is worse than it was in 2006, in part because of the proliferation of the superimposed medicare rules. The purity police still preach, CMS still micromanages, and patients lose. Productivity’s a punchline — demand’s up, PTs are scarce, and the system is definitely rigged.

Thoughts?

larry

@physicaltherapy

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