Medicare Compliance & Reimbursement

But are therapists taking the blame for other providers' mistakes? 

Physical therapists top the list of providers who have trouble billing correctly, according to new payment error rate data from the Centers for Medicare & Medicaid Services. That means therapists can expect more scrutiny of claims from here on out.

CMS Nov. 14 announced its national Medicare improper payment rate findings for fiscal year 2003. The results: Overall, the error rate is holding steady with a 5.8-percent rate in 2003. That's comparable to the 6.3-percent rates in 2001 and 2002, and down dramatically from the 13.8-percent rate in 1996.

This year's data, for the first time, includes provider-specific, contractor-specific and service type-specific error rates. And some classes of providers are making more mistakes than others. CMS charges physical therapists with making the most errors in FY 2003, at 18.2 percent.

"Now that CMS has detailed error rates, we can aggressively target our efforts by strengthening the management of our contractors and ... concentrate on the problems indicated by the error rate," said then-CMS Administrator Tom Scully. "Our goal is to bring about a dramatic reduction in the Medicare payment errors in the next 24 months."

This promise makes physical therapists worry about scrutiny directed at them that they might not deserve. "We're concerned by the numbers in the summary," says Dave Mason, vice president for government affairs with the American Physical Therapy Association. But APTA can't draw any definitive conclusions before examining the complete error rate report, Mason says.

Physical therapists are concerned about this error rate, and the possible resulting fall-out, because while the rate is based on claims for physical therapy services, PTs aren't the only ones billing these codes.

"It's hard to say if the report is painting a fair picture, because it doesn't break out" which kind of provider is billing the PT codes, notes Vicki Tilley, president of ElderFit Physical Therapy and Consulting in Hillsborough, NC.

Only about half of the services CMS reimburses as "physical therapy" are billed by physical therapists, notes Ken Mailly, with Mailly & Inglett Consulting in Wayne, NJ. "So when they say PTs have an 18-percent error rate, is that 18 percent for PTs or for physical therapy services?" Mailly asks. "There's a big difference there."

And most private payers will attest to the fact that most mistakes and abuses of therapy codes come not from therapists, but from physicians' offices, Mailly reports. Mistakes also vary among physical therapy settings, says Tilley. For example, more mistakes are made in hospital settings than in others, she notes. That's not necessarily the fault of the therapists, according to Tilley - it's simply a matter of hospitals not being as quick to train therapists on coding, and hospitals being able to afford to let more denied claims stand.

But that's not to say PTs are blame-free, experts agree. Many mistakes stem from physical therapists who don't fully understand Medicare's medical-necessity criteria, says consultant Pauline Watts, with Encompass Education, Inc. in Palm Harbor, FL. Compounding the problem is a continuing lack of complete documentation to "substantiate the skilled services provided," she points out.

The bottom line: While it's not yet clear how CMS will use the findings of this report, its very existence sends a message to PTs and other providers that the agency is serious about billing errors and providers must do all they can to ensure they're billing correctly.

Editor's Note: The short version of the CMS report is at www.cms.hhs.gov/providers/psc/Medicare-Error-Rate-Short-Report.pdf.