PTs Take Heed: The OIG Might Want to Look at Your Records, Too

By Lynn S. Berry, PT, CPC

When Medicare published the Medicare Provider Utilization and Payment Data: Physician and Other Supplier Look-Up Tool earlier this year (with data from 2012), we advised our physical therapy (PT) clients to go to the website, put in their NPI numbers or names, and see where their Medicare billing stood in relation to other providers. Although there is controversy regarding the accuracy of the claims cited, this is still good advice.

Some providers report that they recently have received calls from government agencies regarding their billing statistics, and that audits are being carried out, as a result. Providers that have not received such notices nevertheless should be more aware of the danger of incomplete documentation and use of incorrect codes. They also should consider conducting self-audits.

Problem Areas to Look for

To illustrate where documentation falls short, consider an audit that the Office of Inspector General (OIG) conducted of a therapy practice in Illinois in August, 2014 that found only a single claim (out of 100) with no deficiencies. In this audit, five main problems were found:

1. Plan of Care did not meet Medicare requirements

2. Treatment Notes did not meet Medicare requirements

3. Untimely or missing Progress Reports

4. Services not Medically Necessary

5. Physician Certification did not meet Medicare requirements

Although we will not defend or oppose the statistical methods used to determine the settlements based on extrapolation (as that is not our expertise), and although we generally feel that the health care community is overrun by audits (some of which lack merit and are based solely on contractors seeking contingency fees), in this instance the OIG makes a strong case that the therapist in question did not follow Medicare requirements for payment and documentation as reflected in the Medicare Claims Processing Manual, Chapter 5, Sections 10.2 and 10.3; and Medicare Benefits Policy Manual, Chapter 15, Sections 220-230; or the signature requirements in the Medicare Program Integrity Manual, Chapter 3, Section The therapist in question through his/her lawyer seemed to make weak excuses for disregarding the rules.

The elements outlined above are main features of the Medicare rules for therapy documentation cited in the Manuals, along with the following:

• Additional rules for clinical supervision, and documentation thereof

• Documentation for evaluations and re-evaluations vs. assessments

• Documentation for discharge notes

• Documentation of rationalization of specific procedures used

• Documentation of the skilled nature of therapy for justifying medical necessity

• Documentation of reasonable and necessary skilled treatment as a primary feature of the Jimmo Settlement

• Additional documentation of medical necessity required when using modifier KX, as is proper use of the new Advanced Beneficiary Notice (ABN)

• Documentation of specific impairment and medical diagnoses, using matching ICD-9 codes

Also important is the 2013 change that requires progress reporting every 10 treatment days or less, along with the additional rules for functional reporting of G codes and severity modifiers, and documentation and rationalization, thereof.

The issues described above have also come up in audits that we have performed on behalf of clients. Many such errors are commonplace among therapists who either have not taken the time to learn the rules, or who believe that it is too much trouble or it takes too much time away from their patients to document all required elements. Or, perhaps some therapists (wrongly) believe that they are not bound by the rules. It is worth noting that omissions in any of the discussed areas can cause denial of an entire claim, and can mean substantial loss for a practice (in the case of the OIG audit cited, the loss to the practice was $634,837.00).

It behooves all therapists to fully understand not only Medicare regulations, but the documentation and payment regulations for all third party payers (which may not correspond to Medicare’s rules). In addition, one should be aware of the Standards of Practice set forth by one’s professional organization—in this case, the American Physical Therapy Association (APTA).

The APTA recently initiated the Integrity in Practice Campaign to “promote high quality of care,” which provides tools, resources, and education on topics such as fraud and abuse, documentation, coding and billing, compliance, and ethics, using real life examples; evidence based practice recommendations through their Choosing Wisely® campaign; and, a new Physical Therapy Outcomes Registry for data collection, benchmarking, and reporting.

Being a professional means not only attaining a degree, but maintaining standards of practice that match that degree throughout your career. This includes self-education regarding not only evidence based clinical practice, but also regarding business and legal issues, as well. I hope that all therapists become more aware of their responsibilities to properly document and code what they perform in the clinic, and would actively seek out the above and other resources to self-audit and demonstrate their great clinical outcomes.


John Verhovshek

John Verhovshek

John Verhovshek, MA, CPC, is Managing Editor at AAPC. He has covered medical coding and billing, healthcare policy, and the business of medicine since 1999. He is an alumnus of York College of Pennsylvania and Clemson University, and a member of the Asheville-Hendersonville AAPC Local Chapter.
John Verhovshek

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About Has 392 Posts

John Verhovshek, MA, CPC, is Managing Editor at AAPC. He has covered medical coding and billing, healthcare policy, and the business of medicine since 1999. He is an alumnus of York College of Pennsylvania and Clemson University, and a member of the Asheville-Hendersonville AAPC Local Chapter.

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