Health Information Management

OIG focuses on documentation, frequency, and duration for outpatient PT services

JustCoding News: Outpatient, May 19, 2010

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by Holly Cassano, CPC

Each year, the Office of Inspector General (OIG) publishes its Work Plan for the coming fiscal year. In 2010, one of the areas the OIG decided to hone in on is outpatient physical therapy (PT) services provided by independent therapists.

Providers can furnish outpatient therapy in a variety of settings, including private practices (some therapists may work in a physician’s office but bill independently), nursing homes, hospital outpatient departments, physicians’ offices, outpatient rehabilitation facilities (ORF), comprehensive ORFs (CORF), and home health agencies.

Medicare spending on outpatient therapy continues to increase each year, and as of 2007, spending exceeded $4.3 billion, which reflects a whopping 6.6 % increase from 2006. With that startling fact, you can be certain that the OIG is not going away when it comes to recouping improper payments for PT services. An October 2009 Medicare Payment Advisory Commission (MedPAC) report about the outpatient therapy payment system provided the following distribution of outpatient therapy spending by setting:

  • Nursing home: 29%
  • PT private practice: 27%
  • Hospital outpatient: 20%
  • ORF: 12%
  • Physician’s office: 7%
  • CORF: 3%
  • Occupational therapist private practice: 2%

Examine the 2010 OIG Work Plan

The 2010 OIG Work Plan stated the following:

We will review outpatient physical therapy services provided by independent therapists to determine whether they are in compliance with Medicare reimbursement regulations. The Social Security Act, § 1862(a)(1)(A), provides that Medicare will not pay for items or services that are “not reasonable and necessary for the diagnosis and treatment of illness or injury or to improve the functioning of a malformed body member.

Previous OIG work has identified claims for therapy services provided by independent physical therapists that were not reasonable, medically necessary, or properly documented. Focusing on independent therapists who have a high utilization rate for outpatient physical therapy services, we will determine whether the services that they billed to Medicare were in accordance with Federal requirements.

So with the information gleaned from this year’s OIG Work Plan, it is clear that the OIG is going to focus on medical necessity of the services provided, as well as who provided the services and how often. In previous data mining efforts, the OIG has identified several areas of risk through various reporting agencies, including a December 2005 MedPAC report.

The OIG will be focusing on the following aspects related to PT services:

  • High utilization rates for outpatient PT services
  • Frequency and duration of visits identified in the initial plan of care
  • Documentation of clinical rationale and/or evidence of skilled interaction by the physical therapist or physical therapy assistant for ongoing therapeutic modalities
  • Qualifications of nonphysician staff members who perform incident-to services

Analyze your practice’s utilization

Now is a good time to run a frequency report of all PT codes that your practice currently reports and bills to government plans and conduct a review of them. Additionally, perform a baseline audit on all of your providers if you haven’t already done so to give you insight into the utilization of PT services both on an individual provider level and on an overall practice level.

In addition, conduct a post-payment review of medical records to identify providers whose utilization implicates them as a potential outlier in your practice. To avoid any accusations of wrongdoing and untold costs to defend yourself against them, it is best to take the pulse of your practice and see where you stand. Remember, the government does not show leniency for reckless disregard of published guidelines.

Look at frequency and duration

The MedPAC audits and national utilization reports have uncovered some disturbing results in terms of the way some physical therapists document plans of care, which has led to further scrutiny from the OIG. These audits have identified what appears to be an across-the-board standard for plans of care with an average frequency of three visits per week in conjunction with an average duration of four to six weeks, without any reference as to the medical necessity for why the patient requires ongoing PT.

Additionally, audits shows that the modalities that the physical therapists use during the sessions (e.g., superficial heat, electrical stimulation, ultrasound) are provided on a routine basis for the duration of that patient’s plan of care without any supporting clinical documentation or evidence of skilled interaction with either the physical therapist or physical therapy assistants.

Note that the American Academy of Family Physicians highlights documentation requirements for plans of care, and Highmark Medicare Services also provides very specific guidelines on documentation of frequency and duration. Check with your state’s fiscal intermediary (FI) for their guidelines.

Explore concerns related to incident-to services

First Coast Service Options, the FI for both Florida and Connecticut, published the following:

Under "incident-to," the physician is the supplier of therapy services and therefore all billing is done under their Medicare number. Only physical therapists can be supervised by a physician. If the therapists are employed by the physician but are billing under their own provider number as PTs in private practice and then assigning the benefits to the physician practice, then assistants can be used as they are under the supervision of the therapist, not the physician.

A recent OIG report noted that many practitioners, including therapists, do not follow physician supervision rules. The OIG report states that nonphysician practitioners (NPP) performed 50% of what the physicians billed, and additionally, the OIG discovered that 21% of the NPPs who provided the services were unqualified.

Many providers fail to realize that incident-to services occur in a variety of settings, including both physicians’ offices and in hospital outpatient departments. Many hospitals do not realize that they should bill for these services under the incident-to guidelines. Physician supervision was always presumed in the hospital setting, but this changed last year when CMS stated that they would no longer allow this presumption.

CMS guidelines state that a physician must provide direct supervision for all Medicare patients. To satisfy direct supervision requirements, a physician must be in the same office suite as the therapist who is providing the PT, and the suite must be a contiguous setting (e.g., not on separate floors). For example, a supervising physician may not leave for lunch or go off-site while a therapist treats Medicare patients on-site. Additionally, only a physical therapist may bill services incident-to a physician, so PT assistants do not qualify for this type of service.

The same holds true for an assistant who must provide services under the supervision of a physical therapist. An assistant must be under a therapist’s direct supervision in a private practice setting, meaning the supervising therapist must be in the office suite. In all other settings, therapy assistants must be under general supervision, meaning the therapist must be available but not necessarily physically present in the clinic when the therapy assistant provides services.

Note that modifier -GP indicates services delivered under an outpatient PT plan of care. But providers should not report this modifier to indicate that a physical therapist personally performed the service. Any other qualified provider (e.g., physician, physician’s assistant) may render PT.

Modifier -GP does not affect incident-to billing. Providers should append it when the provider delivers the services under the patient's plan of care regardless of who provided the service.

So why then is the OIG looking at incident-to services when it all seems so clear cut? The MedPAC audits referenced above have shown that many times providers are billing and receiving reimbursement for services that they actually did not provide themselves nor supervise properly. There are also instances when aides have provided therapy services, but these services are billed incident-to, as if a physical therapist had provided the service. As a result, the OIG has sharpened its gaze on these types of services and is looking to recoup improper payments.

Consider a case in point

One PT network paid $1.88 million to settle allegations that on numerous occasions, the network billed for direct, one-on-one care when it did not actually provide such services. In this case, the government stated that therapists for Carlson Therapy Network (CTN) in Connecticut would routinely provide therapy services to multiple patients at the same time, but would bill government healthcare programs, such as Medicare and Tricare, as if the therapists were providing direct, one-on-one care.

The government alleged that through this practice, from October 2002 to December 2005, CTN defrauded the government of approximately $943,417. To settle allegations under the False Claims Act, CTN agreed to pay double damages, in the amount of $1,886,834.

So in this case, CTN was providing group therapy services (CPT code 97150), but billed services for each patient in the group as if they had provided one-on-one therapy with direct supervision (e.g., reporting CPT code 97110).

Most physical therapists realize that accurate documentation of clinical services is paramount. The main deficiencies that I have seen in PT records are when the therapist documents in the record after the patient has already left, presenting a challenge for the provider to remember that encounter accurately. It is imperative that providers document at the time of service to maintain a clean and accurate record that properly reflects the services provided and bulletproofs your documentation in the event of an audit.

Editor’s note: For more information, consider information provided by WPS Medicare (the Wisconsin Medicare FI) about how to properly code and for PT services. And be sure to check with your state’s FI for specifics on their policies. In addition, consult CMS’ Physical, Occupational & Speech Therapy Billing Guide. E-mail questions to Holly Cassano, CPC, at

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