As the President and CEO of BCMS, Mary Daulong has dedicated more than 30 years to helping physical therapists make sense of the complexities of billing and compliance. Physical therapy billing and compliance is anything but simple. But it’s incredibly important. Especially today, with reimbursement rates declining, costs increasing, and profit margins slimming.
In a recent Breakthrough Patient Demand Summit presentation, Mary Daulong shared important compliance strategies. Implementing these best practices can prevent unnecessary financial loss and increase profit.
3 Compliance Strategies BCMS Recommends for Increased Profit
Read on to discover three key compliance strategies for boosting profitability.
1. Changing Payment Methodology
Navigating Medicare’s payment system can be challenging, but it’s important to have a good understanding of your options in order to maximize your reimbursement rate.
Daulong advises changing your enrollment status from “participating” to “non-participating” supplier between mid-November and December. This lets you collect more payments.
Specifically, you can collect more total allowable money as a non-participating provider. In addition, you can collect payment directly from the beneficiary at the time of service, similar to cash-based practices. This may require some consideration, as collecting cash from patients can be difficult. However, there’s an incentive to make this change—you can collect 115% of Medicare’s normal allowable fee for physical therapy services as a non-participating provider.
The BCMS CEO says that implementing this approach can significantly improve your cash flow because you no longer have to wait for payment. Instead, you receive payment at the time of service.
It’s important to understand that Medicare will pay the patient directly instead of reimbursing you since you’ve already collected payment. Also, Medicare will pay the patient 75% instead of the usual 80% of the allowable fee schedule. So, collecting from the patient is crucial to make this system work effectively.
As you can see, there are some risks involved in this change. Medicare reduces the fee schedule for patients by 5%, which means they’ll have to pay more. Additionally, Medicare pays the patient directly for their co-share. If you’re not willing to collect payment at the time of service, then don’t switch to a non-participating status.
2. Evaluate Your Unit Counting Methodology
Medicare’s 8-minute rule often stumps physical therapists. It determines how units are counted and reimbursed for service. The BCMS CEO breaks down how it’s calculated and how you can use it to increase revenue:
- 8 to 22 minutes: 1 unit
- 23 to 37 minutes: 2 units
- 38 to 52 minutes: 3 units
- 53 to 67 minutes: 4 units
- Each additional 15 minutes: add 1 unit
However, the American Medical Association (AMA) has a different rule: anything over 50% of the total 15 minutes per unit can be billed as one unit.
Whether you use the Medicare or AMA methodology, you must utilize the most up-to-date version of the Current Procedural Terminology (CPT) codes (with a few exceptions). You should also determine which methodology your payer follows. Do a thorough review of their coverage policies. If Medicare is mentioned but there’s no explicit information, it’s generally safe to assume they adhere to the 8-minute rule.
BCMS Examples: How the Billing Methodologies Differ
The key difference between the Medicare and AMA methodologies is how minutes are counted. Medicare calculates the total minutes and then determines the number of units. However, AMA counts minutes per CPT code and expects at least 50% of the 15-minute allowance for each unit. To receive two units of the same CPT code under AMA, you must reach the full 15 minutes plus an additional eight minutes.
BCMS illustrates some examples in this presentation. We’ll look at two of them.
In the first example, AMA would allow three units based on a total of 24 minutes, while Medicare would generate two units because the total minutes do not meet the required threshold.
In the next example, AMA would only allow one unit because the total minutes don’t meet the minimum requirement. But Medicare would provide two units based on the total minutes.
You must understand the differences between the Medicare and AMA methodologies to bill units accurately and maximize your revenue. Carefully analyze the minutes for each CPT code and ensure compliance with the specific requirements of your payer to optimize your billing process.
3. Utilize ICD-10 Codes To Tell the Story on the Claim
Another key to increasing your revenue is to utilize ICD-10 codes (International Classification of Diseases). According to the BCMS CEO, the right codes can help convey the complexity of the patient’s condition.
Suppose you have a patient with a total hip replacement who also presents with other significant comorbidities. In this case, it’s crucial to include this information, supported by the referral or medical provider’s documentation. When you add the relevant impairment diagnoses to the claim, it illustrates the intricate nature of the case. The reader then understands the complexity involved.
It’s also essential to progress beyond basic exercises and range of motion activities for your patient to help them achieve functional independence. Diversify the exercises throughout the entire episode of care.
When you incorporate therapeutic activities, utilize action words such as bending, lifting, and pivoting. These activities indicate the involvement of multiple joints and muscle groups, providing a challenging workout for the body.
By accurately documenting the complexity of a patient’s condition and incorporating varied therapeutic activities, you can effectively convey the challenges and progress achieved throughout the treatment. This comprehensive approach ensures your procedure encompasses the multifaceted nature of the patient’s needs and can be billed higher.
4. Avoid Redundant Coding: Use Progressive Coding
Many practitioners resort to redundant or convenient coding practices, which can be problematic. The BCMS CEO says compliance with Medicare guidelines and HIPAA regulations is essential and requires utilizing the appropriate codes and their definitions.
Use progressive coding instead, where patients start with basic interventions and gradually progress to more advanced activities that promote independence and functional improvement. Make sure your coding aligns with the specific activities performed and their intended purpose.
Inaccurate coding can have financial consequences for your practice. Most notably, you won’t receive the full entitled amount. It may be small, but it can cost you thousands of dollars in lost revenue over time. So, always ensure accurate coding protocol to keep your practice compliant and protected.
Don’t Stop at These BCMS Tips—Increase Revenue With Breakthrough
To manage your revenue cycle efficiently, you must code and document every procedure to ensure appropriate reimbursement. The goal is to get paid 100% of what’s allowed quickly and efficiently.
Breakthrough’s program: Profitability Under Pressure: A Program Exclusively for Physical Therapy Practice Owners, provides eight weekly group calls, access to online resources, and the ability to attend in-person events to support you in some of the daily challenges you face within your practice.
Click here to learn more and apply for Profitability Under Pressure.