Overview
Modifier CQ carries the CMS descriptor "outpatient physical therapy services furnished in whole or in part by a physical therapist assistant". CMS added it, with its occupational therapy counterpart CO, to the HCPCS file on January 1, 2019, required it on claims from January 1, 2020, and began the payment differential on January 1, 2022, all under the Bipartisan Budget Act of 2018. Chapter 5, section 20.1 of the Medicare Claims Processing Manual sets out how it works today.
The pairing rule is strict: CQ must sit on the same line as GP, and CO with GO, or the claim is rejected or returned as unprocessable. The payment rule is precise too. A CQ line is paid at 85 percent of the otherwise applicable Part B payment, the 15 percent reduction is taken last, after the multiple procedure payment reduction and any other reductions, just before sequestration, and it comes off the amount actually paid rather than the fee schedule allowed amount.
Who reports CQ depends on the claim type. On professional claims paid under the physician fee schedule, it applies only to physical therapists in private practice, including those who have reassigned benefits to a physician or nonphysician practitioner group and appear as the rendering provider. It does not apply to therapy billed by or incident to physicians or NPPs, because an assistant does not meet the therapist qualifications Medicare requires for those services. On institutional claims paid at fee schedule rates it applies to outpatient hospitals, rehabilitation agencies, skilled nursing facilities, home health agencies and comprehensive outpatient rehabilitation facilities, but not to critical access hospitals, which are paid on reasonable cost.
The hardest question is what "in part" means. CMS applies a de minimis standard set in the physician fee schedule rules: a service counts as furnished in part by an assistant when the assistant's portion is more than 10 percent of it, and for timed codes the comparison is made on the minutes each person spent. That makes minute-level documentation of who furnished each part of a session the evidence behind every CQ decision, both to apply the modifier when required and to defend omitting it when the therapist furnished essentially all of the service. Practices that employ assistants usually build the decision into the note template, recording the minutes the therapist and the assistant furnished for each timed code, and add a pre-billing edit that blocks a CQ line without GP or a GP line whose note shows assistant minutes above the threshold.
Worked example
A physical therapist in private practice and an assistant both work with a patient in one session. The therapist furnishes 30 minutes of the timed service and the assistant 10 minutes, so the assistant's share, 25 percent, is above the 10 percent de minimis level and the line carries GP and CQ. If the fee schedule amount after the multiple procedure reduction is $50.00 and Medicare's share is $40.00, the CQ line is paid $34.00 before sequestration, 85 percent of the payment otherwise due.
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Frequently asked questions — Modifier CQ (Physical Therapist Assistant Services)
When does the CQ modifier apply?
When a physical therapist assistant furnishes all or part of an outpatient physical therapy service, under the de minimis standard that counts more than 10 percent of the service as 'in part'. It goes on the same line as GP; services furnished entirely by the physical therapist do not take CQ.
How much does CQ reduce payment?
Since January 1, 2022, Medicare pays a CQ line at 85 percent of the otherwise applicable Part B payment. The reduction is applied last, after the multiple procedure payment reduction and before sequestration, and it is taken from the amount paid rather than the allowed amount.
Does CQ apply to therapy billed incident to a physician?
No. On professional claims CQ applies only to physical therapists in private practice, including those who reassigned benefits to a physician or NPP group. Therapy billed by or incident to physicians and NPPs cannot be furnished by an assistant, because assistants do not meet the therapist qualifications Medicare requires for it.
Do critical access hospitals use CQ?
No. CAHs are paid on a reasonable cost basis rather than physician fee schedule rates, so the CQ and CO modifiers and their payment differential do not apply to their claims.
Disclaimer
This glossary entry is operational reference for revenue-cycle and medical-billing professionals. It is not legal, clinical, or contractual advice. Industry benchmarks cite named public sources where available; always verify against the current guidance from the authority body before relying on a number in a contract, policy, or compliance filing.