Medicare Compliance & Reimbursement

Take note: New Jersey's revolutionary bill could help you.

You might laugh at the notion of creating -- let alone introducing -- a bill in your state assembly that would mandate a minimum amount that insurance companies could pay you for your services. But a group of physical therapists with the help of legal counsel and lobbying did it -- in less than six months.

The New Jersey Society of Independent Physical Therapists (NJSIPT) created such a bill (A3790) that's currently sitting in the New Jersey State Assembly -- and you might be able to pass some of its wisdom to your state.

Although the bill suggests solutions to several different problems haunting physical therapists today, perhaps the most revolutionary change it proposes is the reimbursement system under which PTs are paid -- the same way auto insurance pays.

How it works: If you're involved in an auto accident, the insurance that pays for your outpatient physical therapy is your personal injury protection (PIP) benefits, explains David Barmak, Esq., legal counsel for NJSIPT and a healthcare attorney for the Law Offices Of David S. Barmak, LLC in Skillman, NJ. "But if you injure yourself playing basketball, for example, other commercial health insurance may cover the outpatient physical therapy you'd receive for that injury," he explains.

The proposal: Bill A3790 proposes that physical therapy benefits in New Jersey should be reimbursed on the same fee schedule as PIP benefits. And the good news is, the state mandates a minimum payment for PIP benefits. So if the state assembly passes this legislation and the governor signs it, "the statute would require health insurance companies to pay no less than what the state has decided is appropriate for PIP benefits," Barmak says. Even better, the mandated fees under New Jersey PIP benefits pay much higher than most other commercial health insurance plans -- on average almost one and a half times the Medicare fee schedule.

The Authorization Process Would See Major Reforms

Another revolutionary change in this bill is that a payer would determine coverage for physical therapy services by medical necessity -- not an arbitrary financial limit. The problem: Most payers authorize only a portion of the care a therapist requests, explains Mark Schwall, PT, president of NJSIPT and owner of Future Physical Therapy PC in Toms River, NJ. 

The argument: A3790 suggests that by authorizing less than the plan of care spells out, "the insurance company is ultimately challenging the plan of care, which is actually a passive accusation of professional misconduct because the payers are basically accusing the therapist of requesting a service that's not medically necessary," Schwall explains.