Vermont physical therapists say Medicaid code change will slash pay for in‑home infant evaluations and worsen access

Vermont physical therapists testified during APTA advocacy day that a federal restriction on an early‑intervention evaluation code has sharply reduced reimbursement for in‑home evaluations, a change they say will force some providers to stop accepting Medicaid‑only patients and will deepen existing access and workforce problems.

Heidi Wilhelm, president of the Vermont chapter of the American Physical Therapy Association and a clinician who treats infants in-home, said federal guidance now limits use of the early‑intervention evaluation code (referred to in testimony as T1023 and, at times in the discussion, as “T23”), and that the change cut an in‑home evaluation payment "from $350 for that in‑home evaluation to $84." Wilhelm said that drop makes it financially impossible for some small practices to continue serving Medicaid‑only families: "I have patients waiting. I only take Vermont Medicaid. Unfortunately, there's not enough providers, so I have a waiting list. I have to say no to families that call me," she said.

The panelists said the federal restriction means individual clinicians can no longer bill that higher‑value evaluation code for repeated in‑home assessments and that the state is applying standard physical‑therapy evaluation codes (such as CPT codes discussed in the session, e.g., 97161 and related complexity codes) at the same reimbursement regardless of complexity or place of service. A presenter said there is currently no distinct replacement code that preserves the prior higher payment for in‑home early‑intervention work.

Panelists described practical consequences for families and for the state budget. Wilhelm and colleagues said when infants and toddlers cannot get early‑intervention therapy, special‑education needs and school budgets later increase; they argued that early rehabilitation can reduce long‑term costs by improving function and reducing the need for more intensive services. "If we don't give them services, it can really decrease their functional ability later," Wilhelm said. The presenters added that adult patients with complex needs (for example, wheelchair users needing occupational therapy) also face lengthy waits.

Speakers also detailed the administrative strain on small practices: referrals, billing, denials and appeals create time and cost burdens that are harder to absorb when per‑visit payments fall. "I'm losing a lot of money," one owner said, adding that spending staff time to appeal differences of a few dozen dollars is often not feasible when practices have patients waiting.

The panelists placed the payment change in the context of broader market pressures: declining reimbursement over the last decade, rising operating costs, difficulty recruiting and retaining staff, and student debt that pushes newly trained clinicians out of state. They said Vermont trains roughly 30–40 clinicians a year but that many graduates leave for out‑of‑state jobs. One presenter noted the combined effects of housing costs and health‑insurance costs on recruitment and retention.

Panelists urged lawmakers to consider solutions that preserve in‑home early‑intervention access and to weigh workforce supports such as loan‑repayment programs that can apply to physical therapists working in underserved settings. They also argued for recognizing physical therapists as part of primary‑care teams for common musculoskeletal complaints and cited organizational analyses claiming per‑patient cost savings when patients see PTs instead of higher‑cost care.

Committee members asked technical questions about the code and reimbursement mechanics, and presenters offered to provide follow‑up information. The session recessed for a break, with the chair announcing a return at 11:00 a.m.

What lawmakers asked and what happens next: presenters urged follow up with Medicaid officials and with the Green Mountain Care Board advisory channels; committee members requested additional details. The witnesses said they would continue to provide data and policy options to legislators, and they asked lawmakers to consider workforce and reimbursement changes as they evaluate related bills.

Sources and limitations: quotations and attributions in this report come from testimony delivered on March 19 during APTA advocacy day and recorded in the committee transcript. The panelists identified the billing code restriction as a federal change; the presenters used several shorthand labels for codes during discussion (T1023, "T23," and standard PT evaluation CPT codes such as 97161), and the session did not produce a formal written ruling or a Medicaid‑agency statement in the record. Exact programmatic or administrative remedies were not described in binding detail during the session.