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.

physical therapist adjusting patient's shoulder
Source: Shutterstock

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.

BCMS billing presentation example A
Source: BCMS

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.

BCMS billing presentation example B
Source: BCMS

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.

physical therapist with senior testing techniques
Source: Shutterstock

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.

2022 medicare reimbursements and guidelines

CMS Releases the 2022 Fee Schedule and Final Rule

Earlier this month, CMS published the final 2022 fee schedule and complete final rule for Medicare payment policies. Chad Madden, Breakthrough co-founder, teamed up with Mary Daulong, President and CEO at Business & Clinical Management Services (BCMS) to discuss the new rules shortly after they were finalized, on a Live Q&A with hundreds of private practice owners and therapists. 

This article summarizes a number of questions and answers that came up around the fee schedules and the new 2022 Medicare rules. We have been inundated by questions on Medicare PTA reimbursements, Medicare PT guidelines, and more upcoming cuts and implications. 

If you’re in the process of planning for the impacts of the 2022 Medicare cuts, check out Breakthrough’s 2022 Planning Tool for Private Practice Owners. As private practice owners, it’s important to regularly assess the financial health of your practice and identify strategies to increase top-line revenue. Use this tool in your annual planning process to develop strategies that will boost profitability in spite of declining reimbursements. 

We held a webinar recently that covered a number of user questions and had a really great turnout. Take a look at the replay below:

Q: What are the key changes in the 2022 fee schedule and final ruling?

A: Here’s the big picture:

  • PTs will see a ~3.7% reduction in payment and OTs will see a ~3.9% reduction in payment.
  • PTAs using the CQ modifier and OTAs using the CO modifier will see a 15% payment reduction
  • PTAs and OTAs may be virtually supervised using A/V communications until 2023.
  • Remote Therapeutic Monitoring (RTM) codes can be billed by physical & occupational therapists, nurses, etc.
  • Therapy KX Modifier Threshold = $2,150 PT/SLP & $2,150 OT.
  • Medical Review Threshold = $,3000. Hitting the threshold does not provoke an audit automatically – they are looking for aberrant billing behavior.
  • MIPS changes Multiple adjustments to the program, but they re-established Q 154 Falls Assessment.

Q: What is the order of payment reductions on a claim with the CQ or CO modifier? 

A: For the therapy services to which the 15% reduction applies, payment will be made at 85% of Medicare’s (80% payment). This is based on the lesser of the actual charge or applicable fee schedule amount for claims with a CQ or CO modifier. The beneficiary’s co-insurance is deducted after the application of the MPPR to the PE Payment for all “always therapy” codes. The 2% sequestration reduction is always applied last.

Q: Regarding Remote Therapeutic Monitoring…can patients self-report their medical data? What about non-physiological data? 

A: Yes, patients can log their own data into RTM portals using a medical device. Patients can report non-physiological data such as their home program compliance, pain level, medication, etc.

Q: Do we still have the direct supervision rule where a PT has to be present in an outpatient private setting? 

A: The physical therapist is required to be onsite with the PTA as part of the Direct Supervision rule in a private practice under Medicare. During the pandemic, therapists were granted a form of “general supervision” which allows audio-visual supervision as an alternative to direct supervision. General supervision is expiring at the end of 2022, meaning the A/V supervision option will be eliminated and therapists in private practice will be required to utilize “direct supervision” i.e., on-site. Changing this rule would require legislative action. 

Follow and support the bill for PTA/OTA General Supervision, called the HR 5536 “SMART” ACT. Write and talk to your congressman about it. It makes no sense for therapists in private practice to be held to the direct supervision requirement, while other comparable settings have general supervision prerogatives.

Q: How many evaluations can we bill in a year? What length of time? ex: every 30 days, 60 days etc. 

A: There are multiple considerations to keep in mind, including:

  • What does your Practice Act state regarding the therapist’s responsibility/requirement for evaluating new patients and/or conditions? If it stipulates specific requirements, those must be followed regardless of payment for services.
  • An evaluation or reevaluation is required by Medicare if the patient presents with new conditions or diagnoses. These can impact the Plan of Care Goals and Treatment Plan and should be performed and billed accordingly. Medicare typically expects a change/modification in an existing Plan of Care if an Evaluation or Reevaluation is billed. Of course, recertification of the new Plan of Care is also required.

Q: We’ve noticed that the G0283 CPT code is being denied as not medically necessary. Is this a trend for the future? Is there some other way we should be billing this code? 

A: The G0283 modifier is not a bundled code, so that is not the problem. Have you affixed the appropriate other modifiers i.e., GP or KX, if applicable?

Some Medicare Administrative Contractors (MACs) have Local Coverage Determinations (LCDs) that limit the frequency of certain modalities. Visit your MAC’s website to see if there is an LCD for Physical Therapy/Therapy Services.

There is no other way to bill G0283, and doing so could constitute a False Claims Act violation. Always bill according to the CPT code’s definition.

Q: If the owner/PT signs all notes, will there be any reductions for PTA’s?

A: An owner or other therapist cannot circumvent the intent of this rule by signing notes for services performed by a PTA/OTA. If the owner is not the person providing the service, that could become a False Claims Act violation. There is CQ or CO exemption by cosigning for services provided by an assistant. 

If the PTA treats the patient, you must comply with the regulation that specifies when the CQ or CO modifiers must be used. There are a number of scenarios that are included in the Medicare Physician Fee Schedule Proposed Rule (July 2021) which you can reference. 

Q: What is Locum Tenens? 

A: Locum Tenens (Fee-for-Time) is the use of a substitute provider to cover for an enrolled provider in his or her absence in specific situations. There is an important bill on the Hill entitled Nationwide PT/OT Access to Locum Tenens, S2612 & HB1611, which we encourage you to support. 

Access to Locum Tenens would give therapists the ability to be in compliance with Medicare rules in situations where they need someone to cover for them. Just like any other type of provider, therapists run into situations where they have emergencies, personal matters, or are short-staffede, and have to get another therapist to provide care to active patients. Today, therapists don’t have that prerogative. If you’re using a PRN therapist who is not enrolled and you choose to bill under someone’s number who is not the providing therapist, you have a potential False Claims Act violation.

If this bill goes through, therapists would be able to utilize another therapist who is not enrolled in Medicare. The clinic would bill under the therapist being replaced and would pay the locum tenens therapist for the time or per visit. If you’re using a PRN therapist who is not enrolled and you choose to bill under someone’s number who is not the providing therapist, you have a potential False Claims Act violation.

Q: If the Access to Locum Tenens bill goes through, will it be available for Medicaid as well?

A: We don’t know. Medicaid has state policies, and those policies have to be dealt with on the state level. Policies can vary from state to state and that may be one area that may not follow Medicare coverage policies.

Q: What is the status of Sequestration going into 2022? Will the sequestration be reinstated?

A: Sequestration is a 2% reduction in payment that has been mandated since 2013. It was suspended during the pandemic, but yes, it will eventually be reinstated. It is legislatively required and would take congressional action before 2022 to be halted. 

Q: What if you choose to go non-par w/ Medicare and/or refuse to see Medicare patients? 

A: You can choose non-participation, but you still must be enrolled in Medicare. Therapists do not have the prerogative to “Opt-Out” of Medicare. You can either enroll or not enroll. If you are enrolled, you can participate by accepting assignments of benefits. If you choose not to participate, you are choosing not to accept assignments, but you still must be enrolled and file claims for the patient. Under non-participation enrollment, you may bill up to the limiting charge, which is 15% more than Medicare. In order for that to work, you have to be prepared to collect cash at the time of service. 

Those therapists with cash-based practices typically have a population of patients that are willing and able to pay cash upfront. In the non-participation situation, the patient will get reimbursed at 95% of the Medicare allowable within a few weeks of claim submission by the clinic. Remember, they will also be paying up to the additional 15% allowable upcharge. 

The success potential of choosing to be a non-participating provider is slim if your practice serves patients on a fixed or limited budget. The result of electing this payment strategy will limit patient access due to financial constraints. 

Q: Is there any update from Medicare and/or other commercial or federal payers regarding covering telehealth (or virtual visits) for PT?  

A: Today, telehealth services provided by therapists are allowed through the end of the year in which the year the pandemic is declared over. Since the Public Health Emergency was extended on October 15th, telehealth services by therapists will be permitted through 2022. If there is no congressional action and the pandemic is declared over in 2022, therapists will no longer be able to provide services via telehealth in 2023. We are not statutorily listed as telehealth providers. 

Q: Does the Emergency Regulation Requiring COVID-19 Vaccination for Health Care Workers apply to outpatient clinic employees, regardless of # of Employees? If so, does it apply to ALL employees, regardless of contact with patients?

A: What we know right now is that OSHA’s COVID-19 Vaccination Emergency Temporary Standard took effect upon its publication in the Federal Register (November 4, 2021). Employers must comply with most requirements within 30 days of the publication and with testing requirements within 60 days of publication. Employees will have the option of vaccination or weekly testing. There are medical, religious and other exceptions. Employer fines for non-compliance are massive.

Unsure how to plan for 2022 given the looming reimbursement cuts?

Download the 2022 Planning Tool for Private Practice Owners.