Orthopedic Coding Alert

Ever since CMS changed the physician -incident-to- guidelines for servicing Part B outpatient physical therapy services in June 2005, many orthopedic practices are asking themselves if they should hire a physical therapist in order to be compliant with the new requirements.

However, some of the issues that are holding them back are A) What would be the best business relationship to have? B) What would be the benefits of this relationship? and C) What do I need to know when hiring a therapist?

The purpose of this article is to clarify these questions and assist physicians in making the decision that would be right for their practice.

Issue A: What would be the best business relationship to have?

There are two different relationships a practice can have with a licensed physical therapist: the first relationship is as a direct employee of the practice, and the second is as an associate of the practice. So what is the difference?

Relationship 1: As an employee of the practice, the PT will be working under the incident-to regulations. This means that -therapy services must be provided by or under the direct supervision of a physician (a doctor of medicine or osteopathy) who is legally authorized to practice therapy services by the state in which he or she performs such function or action,- according to chapter 15 of the Medicare Benefit Manual Pub. 100-02.

-Direct supervision requires that the supervising physician be present in the suite and immediately available to assist during the procedure.-

Responsibilities of the physician: Direct supervision means that the physician cannot leave the office suite during the time that the PT is performing services, according to Medicare guidelines. The physician must also demonstrate that -the physician's initial service, direct supervision of therapy services, and subsequent services must be of a frequency which reflects their active participation in and management of the course of treatment,- according to the Benefit Manual.

The physician is also responsible for reviewing the plans of care (POCs) and certification/recertification of treatment. The physician can, if he chooses, perform the evaluation and develop the POCs; if they do this, they must follow all of the guidelines for documentation as listed in the Section 220 of the Benefit Manual.

Responsibilities of the therapist: The PT does not have to have his own National Provider Identifier (NPI) number, because the Medicare services he will provide will be billed under the associated physician's NPI and assigned to the group practice if applicable. The therapist must follow the guidelines for documentation of services as identified for all other sites of service, including evaluation, daily notes, progress reports, and updated POCs.* 
 
Relationship 2: As an associate of the practice, the PT is practicing as a therapist in independent practice (PTPP) and has his own NPI and Medicare contract. Here the therapist assigns the benefits to the physician practice and receives payment from the practice and not directly from Medicare.

Responsibilities of the physician: Under this relationship, the physician is responsible for the referral, reviewing the POC and certifying/recertifying need of skilled care. The surgeon does not need to be on-site while the treatment is being performed.

Responsibilities of the therapist: Here, the therapist is the supervising therapist and as such can have physical therapy assistants (PTAs) perform treatment. The therapist has to provide the direct supervision of the assistants (because assistants cannot have an NPI) or to other therapists if they do not have their own provider status. When the therapist is unavailable, it is his responsibility to find a replacement therapist to provide the appropriate supervision and/or services. He must write a progress note each interval of treatment, update the POC if required and provide at least one treatment during the interval if using PTAs.*

Issue B: What are the benefits of each type of relationship?

Relationship 1: Under the incident-to relationship, the only real benefit would be that the physician is able to closely follow the treatment the patient is receiving. The disadvantages are that the supervising physician needs to be on-site while the therapist is performing treatment; the therapist must perform all of the treatments because the services of a physical therapy assistant cannot be used (only a therapist can supervise an assistant) and, when the therapist is unavailable, the physicians must either perform the treatment themselves or hire another therapist to substitute.

Relationship 2: Under this relationship, one benefit would be that, as in the incident-to relationship, the physician can be closely involved with the patient care, and the other benefit would be elimination of the disadvantages related to incident-to requirements.

In both relationships, the physician practice would be responsible for providing the treatment facilities (space and equipment), billing Medicare and reimbursing the therapist.

Issue C: What do I need to know when hiring a therapist?

The main requirement for both relationships is that the therapist be knowledgeable in the rules and regulations for the coverage of therapy services under Part B. This is absolutely vital in order to ensure compliance with Medicare. Another requirement is that the PT have a good knowledge of the services they will be providing and the appropriate CPT coding.

If you are looking at the relationship as a PTPP and the therapist does not have this provider status, it is easy to rectify. Obtaining the NPI number and Medicare provider status usually takes a few weeks depending on the contractor. During this time, the physician may bill incident-to until the NPI number is obtained and then, once the Medicare Provider Application and Assignment of Benefits paperwork has been received by the carrier, the therapist can provide services as a PTPP, but the claims are not billed until the confirmation of provider status is received.

These are the basics that you should be aware of and that can assist you in making the appropriate decision for your practice.

Pauline Franko, MCSP, PT, is owner and principal lecturer for Encompass Consulting & Education LLC, a rehabilitation consulting and education company based in Tamarac, Fla. The company's -Direction on Demand- service specializes in providing the rehabilitation professional with a clear, easy way to understand how to provide Medicare-compliant services to their patients in the SNF and outpatient settings. As a principal in Comprehensive Medicare Consultants LLC, she is responsible for assisting with and directing compliance to rehab agencies.

*Medicare Benefit Manual Pub. 100-02 Chapter 15, -220 -- Coverage of Outpatient Rehabilitation Therapy Services (Physical Therapy, Occupational Therapy, and Speech-Language Pathology Services) Under Medical Insurance.