OIG Releases Report on Physical Therapy Billing

March 29, 2018
Rick Gawenda

The Office of the Inspector General (OIG) has issued a report regarding the findings of a review they conducted on outpatient physical therapy services provided to Medicare beneficiaries between July 1 – December 31, 2013. For calendar year (CY) 2013, the Medicare Part B program paid approximately $1.8 billion for outpatient physical therapy services provided to beneficiaries.

The OIG sampling frame consisted of 9,037,556 outpatient physical therapy service claims with a place of service code of 11 (signifying that the therapist provided the service in an office setting), totaling $635,771,872, of which we reviewed a stratified random sample of 300 claims. A claim consisted of all services provided to a beneficiary on the same date.

Sixty-one percent of Medicare claims for outpatient physical therapy services that the OIG reviewed did not comply with one or more of the following requirements: Medicare medical necessity, coding, or documentation. Specifically, of the 300 claims in our stratified random sample, therapists claimed $12,741 in Medicare reimbursement on 184 claims that did not comply with Medicare requirements. Therapists properly claimed Medicare reimbursement for the remaining 116 claims.

On the basis of the sample results, the OIG estimated that Medicare paid $367,039,705 for outpatient physical therapy services that did not comply with Medicare requirements during the 6-month audit period. Therapists submitted claims that were not medically necessary, contained coding deficiencies, or did not meet Medicare documentation requirements.

The OIG determined 91 claims did not support medical necessity, 145 claims had coding errors and 112 claims did not meet Medicare documentation requirements. Types of medical necessity errors included:

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  1. How can we ever expect to get reimbursed at higher rates from Medicare when our colleagues continue to ignore proper documentation guidelines. We are killing our profession one note at a time. So Frustrating- Amanda

    1. I would not place much weight on this OIG report. First, dates of service reviewed were July 1 – December 31, 2013. FLR had just become mandatory on July 1st and many providers and Medicare Administrative Contractors did not do FLR correctly. We also do not know for sure if the dates of service reviewed actually required FLR G-codes. Was this the initial evaluation or 10th visit note that was reviewed. Secondly, the 2 reviewers were a coder and a rehab physiatrist. In my opinion, not the most qualified people to review physical therapy medical records. Thirdly, some of the denials were due to the patient not improving. Patient improvement is not a requirement for the Medicare program to pay for outpatient therapy services. The requirement is that the services are of such a complexity that it requires the unique skills of a therapist to provide. Fourth, even CMS did not agree with all of the OIG findings and recommendations. I could go on, but I hope you get my point. Do I think we, as a profession, need to get better in documentation showing what we are DOING for the patient and not just what the patient DID in therapy that day; absolutely!

  2. The findings go on and referrance “Medicare Benefit Policy Manual, chapter 15, § 220.3A
    Which state that all billing must be included in the patient documentation as well as on the claim. Does also extend to KX modifiers in any modifiers that would be placed on the claim? Since all of our notes contains CPT coding, time, duration and units for each visit, and the CPT coding and units of service are included on the bill we covered on those, however we have not consistently included KX modifiers or other modifiers in our documentation, it is been consistently reported on claims.