Neurology & Pain Management Coding Alert

Having a physical therapist as part of your neurology practice is a great convenience to patients, allows the physician to exercise more control over a treatment plan and affords the opportunity to bill at higher incident to rates.

Incident to rates allow the practice to bill as if the physician performed the service, although it was actually performed by another clinician in the physicians employ, in this case, a physical therapist.

But those higher billing codes for physical therapy services can also attract the attention of auditors, so its important to be sure that your neurologist/physical therapist relationship meets Medicare and provider requirements.

There are five basic areas that deserve special attention if your practice employs a physical therapist.

1. The physical therapist must be an employee. The most basic requirement is the employer-employee relationship. First of all, under Medicare rules you need to bring the physical therapist up under his or her own provider number to be part of the practice, says Mary Jean Sage, CMA, senior consultant with the Sage Consultants in San Ramon, CA, who often lends advice to specialty practices, such as neurology, that want to maximize profits while being careful to adhere to compliance standards. She adds that the physician must provide Medicare and other payers with the physical therapists provider number in order to make them part of the neurology practice. They then have the same eligibility for reimbursement as any other practitioner employed by the practice.

The test is whether or not the practice issues the physical therapist a W-2 and pays payroll taxes. If that requirement is met, the practice can be creative in how the work is structured. For example, the physical therapist might be part time, sharing his or her time with other practices, or even on call.

While a subcontractor relationship might be economically efficient, Sage strictly advises against it. If a physical therapist absorbs any part of their overheadfor facilities, medical supplies, marketing or anything elsethe relationship could be defined as a subcontract. To meet the employer-employee test, the physical therapist should work for the physician practice under the same basic employment terms as a nurse, office manager or office administrator. Again, the best test is whether or not the physician files a W-2 and pays payroll taxes for the physical therapist.

Jim Nugent, director of reimbursement for the American Physical Therapy Association, warns that physicians who employ physical therapists should be wary of violating federal rules against self-referrals for profit. If the doctor refers to his own PT to make a lot of money, we frown on that type of relationship, he says.

But I can understand that an on-site PT is [...]