CQ and CO Modifiers Part 1: Why was De Minimis Implemented and What is Next?

by Deena Farley, Consultant on June 23, 2021

Reporting of the CQ and CO modifiers to indicate treatment services provided by physical or occupational therapy assistants is not a new concept for therapists.


2- Part CQ and CO Modifiers - Part 1 (1)


LW Consulting, Inc.’s experts want to remind therapists of the financial impact that is scheduled to go into effect January 1, 2022 regarding the De Minimis standard. If you remember, the De Minimis standard was first released in the Centers for Medicare and Medicaid (CMS) Physician Fee-for-Service rules in 2019. Several updates have occurred and on March 3, 2021, CMS released billing examples, as well to alert therapists to recent treatment scenarios released by the Centers for Medicare and Medicaid Services (CMS) describing the calculation of the De Minimis minutes. The De Minimis standard refers to services provided “in whole or in part” by a physical or occupational therapy assistant. The 2022 effective date is quickly approaching and the importance of ensuring accurate application of the CO and CQ modifiers will pose an increased risk to practices starting on the January 1, 2022 effective date.

In this two-part blog series, we will first examine the CO/CQ modifier regulations. In the second blog, we will review the specific scenarios that CMS outlined in March 2021 regarding the calculation of the reimbursement differentials will be reviewed.

How Did We Get Here?

Section 53107 of the Bipartisan Budget Act (BBA 2018) added a new section 1834(v) of the Social Security Act regarding the staged implementation of the CQ and CO modifiers to implement payment reductions for services by a physical therapy assistant (PTA) or an occupational therapy assistant (OTA). Beginning January 1, 2022, when assistants treat the client “in whole or in part,” the reduced payment will be at 85% of the typical Medicare Part B payment system. This was implemented to mirror payment models within the physician sector where services provided by non-Physician providers are paid at a reduced rate.

What Has Occurred Thus Far?

Here is a recap of the use of modifiers over the past couple of years:

  • 2019 - CMS was tasked by the BBA to establish modifiers to delineate which therapy services were rendered “in whole or in part” by a PTA or OTA.
  • 2020 - The claim submission requirement was implemented requiring submission of the CO and CQ modifiers when treatment services were provided “in whole or in part” by a PTA or OTA. This practice was implemented to ensuring proper implementation and testing of the CO and CQ modifier applications without providers experiencing the 15% payment differential.
  • 2021 – Providers continued to submit the CO and CQ modifiers in preparation for the financial impact beginning January 1, 2022.
  • 2022 - Beginning January 1, 2022, providers using the Medicare physician fee schedule will be paid at 85% of the fee schedule rate for services provided by PTAs or OTAs. This impacts private practice, outpatient hospitals, rehab agencies, skilled nursing facilities (SNFs), home health agencies, and Comprehensive Outpatient Rehabilitation Facility (CORFs).

Why is 2022 so Important?

It is imperative the documentation supports the CO and CQ modifiers. The documentation must match the services being billed as well as specify who is delivering the services to the minute. Claims will have to demonstrate the correct modifiers to delineate whether the PT/OT or the PTA/OTA are treating the clients. Calculating the De Minimis percentages to determine if the PTA/OTA serviced more than 10% of the total minutes for the service will be critical and if miscalculated could pose a possible “false claims scenario.” The De Minimis standard or the 10% standard was finalized in CY 2020 Physician Fee Schedule regulatory guidance. The CQ or CO modifier must be utilized if the PTA/OTA provides all the minutes of a service independent of the supervising therapist or if the assistant provides a portion of a service separately from those provided by the supervising therapist and that portion of the service exceeds 10% of the total minutes.

How Can LW Consulting, Inc. (LWCI) Help You Prepare for 2022?

Having an external review of your practice can help to minimize billing compliance risks. Having the documentation support the use of the CO and CQ modifier may likely become a payer audit target, no different than it currently is in the physician sector when services are provided by an NPP. Therapy providers need to ensure the documentation and staffing patterns support the CO and CQ modifiers billing compliance to minimize the risk of false claims.

Here are some ways that LWCI’s experts can help:

  • Conduct an external audit of your documentation when the CO and CQ modifier was applied.
  • Conduct an external audit of your claims submitted with the CO and CQ modifier to compare payers and staff schedules.
  • Conduct an assessment of your patient scheduling patterns for providing utilizing PTAs or OTAs.
  • Conduct a staffing assessment when considering expanding your practice.


For more information, contact Deb Alexander, Director, at 717-213-3122 or email DAlexander@LW-Consult.com.

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Topics: Reimbursement