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Physical Therapy Services Billed by Physicians (PHY) (PT/OT)
Posted October 29, 2007
The Medical Review Department recently conducted a service-specific review (SSR) of physical therapy services (97110-97530) billed by physicians of specialty 11 (Internal Medicine) and specialty 20 (Orthopedic Surgery). A complete description of these codes may be found in the Current Procedural Terminology (CPT) Manual.
The Office of Inspector General (OIG) conducted a study in 2002, based on a simple random sample of 70 physical therapy line items billed by physicians and rendered in the first six months of 2002. They found that 91 percent of physical therapy billed by physicians did not meet program requirements, resulting in $136 million in improper payments. In addition, they analyzed Medicare claims data from 2002 to 2004 and identified aberrances in physicians' billing patterns and unusually high volumes of claims. Finally, based on the review, they identified a number of issues associated with physical therapy billed by physicians under the "incident to" rule.
This SSR (initiated in December 2006 and completed in June 2007) involved review of 100 claims (for dates of service October 1, 2005 - August 31, 2006) chosen at random by our computer system. Medicare contractors conduct these reviews to identify widespread problems by monitoring usage of procedure codes among the provider community.
On completion of SSRs, a provider error rate is calculated. An explanation of how error rates are calculated may be accessed in Pub. 100-08, Medicare Program Integrity Manual, Chapter 3, §3.11.1.5.
The SSR resulted in an overall error rate of 11.6 percent, with a down-coded/denial change rate of 20.8 percent. Below is a summary of the major issues and billing problems that were identified:
- Lack of documentation - Evaluation, re-evaluation or the plan of care was not provided.
- Lack of documenting relevant patient information - Patient goals, the frequency of patient visit, time spent per modality/therapeutic procedure, etc.
- Billing physical therapy services not rendered by a physical/occupational therapist.
- Incorrect reporting of timed procedure codes and/or time spent rendering physical therapy services.
- Service(s) billed are not included in plan of care (POC).
- An incorrect diagnosis or diagnosis not supported in the documentation was reported to Medicare.
- Maintenance therapy.
- Rendering provider unknown.
- Services reported to Medicare under an incorrect billing/rendering provider.
Other notable comments:
- 92 claims were billed "incident to" the physician for services rendered by physical therapists and physical therapist assistants.
- 8 claims were billed "incident to" the physician for services rendered by a non-qualified therapist.
Per the Physical Medicine and Rehabilitation local coverage determination (LCD) (#PM003E08):
"A. Indications and Limitations:
- Intervention with PM&R modalities and procedures is indicated when the diagnosis established by the physician or non-physician practitioner supports utilization of the intervention; there is documentation of objective physical and functional limitations; and the plan of care incorporates those treatment elements that are expected to result in improvement of these limitations in a reasonable and generally predictable period of time. If the clinical response to ongoing therapy is not satisfactory, or fails to produce significant improvement within a reasonable time, the carrier may determine that the services are not reasonable and necessary. New York State Education law (Article 136, section 6731 c.) states that for therapists in New York State, "treatment shall be rendered pursuant to a referral" by a physician or NPP.
- PM&R services in provider's offices and patient's homes (when the patient does not have Medicare covered Home Health services) are covered when reasonable and medically necessary for the treatment of the patient's condition (signs and symptoms). The type, frequency and duration of services must be medically necessary for the patient's condition under accepted medical, physical therapy, and occupational therapy practice standards, and relate directly to a written treatment plan. There must be an expectation that the condition or the level of function will improve within a reasonable (and generally predictable) time, or the services must be necessary to establish a safe and effective maintenance regimen required in connection with a specific disease. If the patient's expected restoration potential would be insignificant in relation to the extent and duration of physical therapy services required to achieve such potential, the therapy would not be considered reasonable and necessary."
When billing Medicare for services rendered, providers are to follow Medicare guidelines which can be accessed on the Centers for Medicare & Medicaid Services (CMS) Web site at www.cms.hhs.gov/Manuals.
Further information can be found at:
- Pub. 100-02, Medicare Benefit Policy Manual, Chapters 12 and 15.
- Pub. 100-04, Medicare Claims Processing Manual, Chapters 5, 12, and 32.
- National Correct Coding Initiative Policy Manual, Chapter 11, §N.
- Physical Medicine and Rehabilitation LCD (#PM003E08) and Coding Guidelines article.
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