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A Medley of Compliance Questions

By Mary R. Daulong, PT, CHC, CHP

Q: Does Medicare require all outpatient therapists, billing Part B, to be enrolled in Medicare and to have a Medicare Provider Transaction Access Number (PTAN)?

A: Yes, I believe that Medicare mandates that a physical therapist be enrolled in the Federal Program when billing Part B Medicare. The rationale for my “yes” is based on the following regulations:

Therapist refers only to a qualified physical therapist, occupational therapist, or speech-language pathologist. TPP refers to therapists in private practice (qualified physical therapists, occupational therapists, and speech-language pathologists).

To qualify to bill Medicare directly as a therapist, each individual must be enrolled as a private practitioner and employed in one of the following practice types: an unincorporated solo practice, unincorporated partnership, unincorporated group practice, physician/NPP group or groups that are not professional corporations if allowed by state and local law. Physician/NPP group practices may employ TPP if state and local law permits this employee relationship.1

For purposes of this provision, a physician/NPP group, practice is defined as one or more physicians/NPPs enrolled with Medicare who may bill as one entity. For further details on issues concerning enrollment, see the provider enrollment Website at www.cms.hhs.gov/MedicareProviderSupEnroll and Pub. 100-08, Medicare Program Integrity Manual, chapter15, section

This CMS Program Integrity Manual specifies the resources and procedures Medicare fee-for-service contractors must use to establish and maintain provider and supplier enrollment in the Medicare program. These procedures apply to carriers, fiscal intermediaries, Medicare administrative contractors, and the National Supplier Clearinghouse (NSC), unless contract specifications state otherwise.

No provider or supplier shall receive payment for services furnished to a Medicare beneficiary unless the provider or supplier is enrolled in the Medicare program. Further, it is essential that each provider and supplier enroll with the appropriate Medicare fee-for-service contractor.2

Q: Is it true that Medicare is using a Fraud Prevention System (FPS) to identify aberrant billing by providers and suppliers? If so, how do I know what they consider aberrant?

A: Yes, Medicare introduced this system about three years ago, and it has been very successful. The system allows Medicare to identify atypical or aberrant billing behavior. This predictive analytic technology is used to identify the highest risk claims for fraud, waste, and abuse in real time; and it stopped, prevented, or identified $115 million in payments, resulting in an estimated $3 for every $1 spent in its very first year.

A few examples of aberrant billing that would could be identified by the FPS for therapists are:

  • Redundant coding (e.g., using the same code sets for each date of service and/or for all patients regardless of their diagnosis)
  • Excessive use of the therapy cap exceptions (exceeding the peer average with no evidence of co-morbidities or complexities to justify the coding behavior)
  • Billing up to the therapy cap and never attesting to a therapy cap exception need
  • Abnormally high units of service under one National Provider Idenitifier (NPI)
  • Abnormally high billing with Advanced Beneficiary Notices (ABNs) noting “not medically necessary or statutorily non-covered services”
  • Disregard of Local Coverage Determination requirements and/or restrictions

Q: I know one of the seven recommended elements of a Compliance Program is monitoring and auditing. What should I be monitoring and auditing?

A: You are very prudent to be concerned about the “monitoring and auditing” element of a Compliance Program as this is how you prove its effectiveness. Compliance Programs are dynamic and require regular monitoring to determine if a policy, procedure, or process is current and reflects present day regulations. Many practitioners use a question process which, while revealing, can be less than comprehensive. Questions such as:

  • Is there a risk of internal fraud or theft?
  • Is there a risk of a protected health information (PHI) breach?
  • Is there a risk of hiring a person who is excluded from providing services to federal beneficiaries?
  • Is there a risk of exposing an employee to Bloodborne Pathogens?
  • Is there a risk of filling inaccurate or fraudulent claims?
  • Is there a risk of non-compliance with federal and/or state supervisory requirements?
  • Is there a risk of a patient abandonment claim?
  • Is there a risk of patient and/or staff harm due to a fire in the facility?

A risk assessment is a more thorough method to monitor effectiveness. The risk assessment is often divided into regulatory categories so it can be managed in separate time frames. These categories, typically, have many subsections which identify specific requirements or risk areas associated with the regulations; the detail of this method assists in the monitoring or auditing process. An example of some regulatory categories would be:

  • Fraud & Abuse
  • Office of the Inspector General List of Excluded Individuals & Entities
  • Payor Regulations
  • Human Resources/Labor Law

Health Insurance Portability and Accountability Act (HIPAA)/Health Information Technology for Economic and Clinical Health Act (HITECH)

  • Occupational Safety and Health Administration
  • Americans with Disabilities Act
  • State Practice Act
  • Town, City & Municipality Ordinances

In addition, I recommend using a compliance calendar to provide guidance regarding the timing of required activities mandated by payers, agencies, and other regulators. The use of a compliance tracking system is, also very helpful in verifying the status of functions completed, as well as corrective action plans.

Q: What is the difference between a HIPAA security incident and a HIPAA security breach?

A: HIPAA security standards define a “security incident” as an attempted or successful access, use, disclosure, modification, or destruction of information on a system without appropriate authorization. The incident need not involve “protected health information” to qualify as a security incident, as many security incidents occur because they compromise the security of the system and are attempts to bypass security controls.

Some examples of security incidents that would be germane and/or of potential risk are:

  • Shared passwords
  • Unlocked screens and/or extended log-off times
  • Worm, virus, and/or malware infections
  • Access and/or attempts to access applications or the Internet without authorization
  • Social browsing (employees/students without E-PHI access rights)
  • Unauthorized software downloads (e.g., screen savers)
  • Saving data to the local drive verses the server
  • Unprotected laptops used in or in transit to remote sites

On the other hand, a “security breach” is any impermissible use or disclosure of PHI that is presumed to be a breach, with a subsequent requirement to provide a breach notification, unless the covered entity or business associate, as applicable, demonstrates that there is a low probability that the PHI has been compromised. Importantly, the covered entity or business associate, as applicable, has the burden of demonstrating that all notifications were provided or that an impermissible use or disclosure did not constitute a breach, and they must maintain documentation sufficient to meet that burden of proof.

In determining whether notice of a breach is required, a covered entity or business associate must consider at least the following factors:

  • The nature and extent of the PHI involved, including the types of identifiers and the likelihood of re-identification
  • The unauthorized person who used the PHI or to whom the disclosure was made
  • Whether the PHI was actually acquired or viewed
  • The extent to which the risk to the PHI has been mitigated

Q: What audits that should be performed to comply with HIPAA/HITECH/Affordable Care Act Security Regulations?

A: Some of the typical security audits that you should conduct to be proactive are:

  • Network or Local Drive Audits (e.g., patches and ports)
  • Baseline Security Analyzer Audits (e.g., Security Update Status)
  • Back Up Logs or Reports (verify reproducibility)
  • Electronic Medical Records Access Audits
  • Practice Management Program Access Audits
  • Web Access Audits
  • Company and Personal Device Password Compliance
  • Remote User Security Measures (e.g., firewalls, antivirus software).

Mary R. Daulong, PT , CHC, CHP, is a PPS member and the owner of Business & Clinical Management Services, Inc., a consulting firm specializing in outpatient therapy compliance, including documentation, coding and billing, enrollment and credentialing, and Health Insurance Portability and Accountability Act and Occupational Safety and Health Administration regulation education. She is also the author of both The Private Practice Compliance Manual and The Third-Party Biller Compliance Manual. She can be reached at daulongm@earthlink.net.




1. CMS Benefits Policy Manual, Chapter 15 Section 230.4, Services Furnished by a Therapist in Private Practice (TPP),(Rev. 179, Issued: 01-14-14, Effective: 01-07-14, Implementation: 01-07-14).

2. CMS Program Integrity Manual, Chapter 15 Section 15.1, Introduction to Provider Enrollment, (Rev. 347, Issued: 07-15-10, Effective: 07-30-10, Implementation: 07-30-10).

The Peak of Change


Navigating through the ceaseless changes in health care.

By John Sievers, MPH, MHA

This spring, I vacationed with my family in Mesa, Arizona, where we took advantage of the numerous hiking trails winding through Superstition Mountains. Our most story-worthy adventure involved a trail that leads to the top of Flat Iron Mountain and boasts a varied difficulty rating between “moderate” and “intense.” Getting to the top required that we leave behind a clearly marked trail—because it ended halfway up the mountain—and navigate the rest of our journey by trial, error, and instinct. More than once my family and I had to back-track and pursue another path, but the reward was well worth the effort; the view of Phoenix from atop Flat Iron Mountain and the sense of accomplishment that came from making the journey was truly unbeatable.

This experience is not unlike navigating the ceaseless changes in health care, specifically as they relate to the many business models for physical therapy service delivery. There are stretches of time when it seems like we are on a clearly marked trail, headed in a sure direction—then without warning the trail disappears, and we are left to find our own way to the top.

As frustrating as this may seem, we have only just begun the climb. Physical therapy delivery models face a wealth of change in the near future, including payment methodology, physician alignments, development of provider networks, and the consolidation of health care systems.

The general agreement is that the health care industry’s current state is not sustainable, and while most recognize that the next five years will look nothing like the last five, how to position and pursue the best course of action is still not a clearly marked path. With the specific details and timing of change unknown, physical therapy owners are hesitant to craft a clearly defined strategy. They recognize that they are facing huge decisions for the future of their company, but are reluctant to act amidst so many fluctuating variables.

Looking ahead, three industry trends are likely to take root in the coming months, which will affect the future environment for nearly all physical therapy centers.

Changing Trends in Health Care

  1. Payment will decline. Medicare and commercial payors face increased rate regulation, tougher medical loss ratio requirements, and the establishment of health insurance exchanges, which increases transparency and forces premiums downward. Given these pressures across the major payor classes, payments to facilities will suffer.
  2. Alternatives to fee-for-service payment will become more prevalent. Commercial payors, Medicare, and state agencies will continue to refine alternative payment concepts that transition from fee-for-service towards pay-for-performance, episode-based bundled payments, and population-based reimbursement.
  3. Increased availability of provider-specific information on the price for a specific health care service. As health care costs continue to rise, purchasers will focus on strategies that can bring costs under control. These pressures have facilitated a movement by many purchasers to engage consumers more fully in their health care decisions, including taking on a greater share of their health care costs. In their efforts to manage costs, health care purchasers—including large employers—recognize consumers need information on both health care price and quality.

As these trends evolve and begin to affect practice owners, the most critical change may be the degree and pace of transition from volume-based payment schemes to value-based alternatives.

Even facing this change, many facilities will choose to stay the course and hope for the best, especially in markets where net payment is favorable and owners are still enjoying strong profit margins. Regardless, the options you elect to implement or reject will go a long way in determining the future sustainability of your company. As you consider what route to take for yourself and your facility, keep in mind the market variables, which change as frequently as the market itself.


Payment Rates in Your Market
  • Analysis of net revenue per visit both current and trending
  • Evaluate payor mix and individual contractual fee schedules
Current Profit Margins
  • Review of year-over-year patterns and future forecasting
  • Determine potential to reduce expenses—both fixed and variable
Consolidation among Physicians & Health Systems
  • How will organizational restructuring of referral sources affect your facilities?
  • Assess potential impact of Accountable Care Organizations (ACOs) and bundle payment arrangements
Ability to Capture Market Share
  • Your ability to maintain and grow same store volume
  • Effect of high deductible insurance plans and Health Savings Accounts (HSAs)

Fortunately, despite the changes and the variables within them, you have many options to position yourself and your physical therapy facility to gain a competitive advantage. While every possibility needs to be weighed against your long-term personal and business objectives, I recommend that independent physical therapy facilities consider expansion and growth strategies, mergers and acquisitions, integrated network alignment, or succession planning.


Expansion & Growth Strategies
  • Focus on increased case volume and payment
  • Determine cost/benefit of offering new service lines
  • Offer carve-outs with self-insured and commercial insurers
Mergers & Acquisitions
  • Target local/regional market competitors
  • Potential to create greater value for future monetizing transaction
  • Leverage economies of scale with respect to billing, software, and human relations.
Integrated Network Alignment
  • Evaluate various options available in your market
  • Determine competitive advantages that local networks could offer
  • Assess Professional Services Arrangements (PSAs) with health systems
Succession Planning
  • Determine best course of action to monetize ownership
  • Target current employees for potential succession strategy
  • Develop 2 to 3 year plan of action to transition

The bottom line is to prepare for everything. You cannot know when your paved trail will end, you cannot determine which obstacles will cross your path or when, and you cannot always know the variables you will have to address when considering how to position (or reposition) your facility. Take time to review market trends and studies and align your practice with a group that has in-depth understanding of what is going to affect health care change and how it will wind its way to you.

The journey ahead will transition facilities to compete and there will be difficult stages along the trail. But it is still possible to reach the top. There is always an alternate route—find one that makes it possible for you to keep pressing forward.

John Sievers, MPH, MHA, is vice president of Physical Therapy Business Development at Nueterra. He can be reached at jsievers@nueterra.com.



Share your passion and celebrate your business during National Physical Therapy Month

By Don Levine, PT, DPT, FAFS

As we gear up for October, the Marketing and Public Relations Committee urges you to celebrate your profession by sharing your passion! October is National Physical Therapy Month, and we champion you to make it your own and share your passion with your community. Ask yourself: Why did you open your doors? What makes your motor run? What is your purpose? Share these answers with your clients and community!

“To be successful, the first thing to do is fall in love with your work.”1 While few may love the ever-increasing administrative burdens, we cannot deny that we have one of the most rewarding professions. Learning the skills necessary to help alleviate patients’ pain and improve their function should humble us every day. It is truly a gift to help those in our community live better lives. Now, let’s celebrate and educate!

How you share your expertise is important—but first you must decide what you would like to share. Some companies have already developed their mission statement, and this may be a great tool from which to build your message. If you have a management team, bring this group together and discuss the message you want your community to receive next month. What makes your practice valuable to the members of your community, and what most excites you and your staff about your profession? Narrow the information down to one or two concepts and then hone your message. In a smaller practice, bring key staff together to perform this task—get input from team members. Sharing their passions will heighten their desire to be a part of the process.

Sharing is caring!

Getting the word out can be done in many different ways:

  • Website: List information on your website regarding any events your practice may be holding.
  • Facebook: Easy and free. Not only can you post events, but you can take advantage of posting pictures that demonstrate your passion and your involvement in your community. Engage your audience so it is not just a one-way street.
  • E-newsletter: This is a great way to get your information out to your fan-base!
  • Media placements: Placing ads in newspapers and in magazines or on radio and on television can be expensive, so it is up to each practice to decide if the cost is worth the exposure. Do not forget to seek out free press opportunities when you invite groups to cover your event!
  • Referral sources: Dropping off information to your referral sources can be more effective than mailing. Think outside the box for this group. Medical doctors easily come to mind, but remember other targets such as massage therapists, personal trainers, nurse case managers, and area coaches, too.

What’s a physical therapist to do?

The ideas should come from your practice to make it your own. Some ideas may be as simple as hosting an event to celebrate your patients or referral sources, and other events may be as elaborate as developing a road race or an obstacle course challenge. Holding a legislative open house provides lots of exposure (featured in Impact September 2013 issue). Hosting your local and state representatives is a sure way to bring in the press, so think about combining this event with something to really set your practice apart.

Physical therapists understand the health care issues that our society faces today. We cannot take this knowledge for granted, but instead should spread our knowledge and understanding to our communities. Every day that our clients place their wellness in our hands is truly a gift.

As Theodore Roosevelt stated, “Far and away the best prize that life offers is the chance to work hard at work worth doing.”2 Celebrate your profession and your passion!


Don Levine, PT, DPT, FAFS, is chair of the marketing and PR committee and co- owner of Olympic Physical Therapy with five locations in Rhode Island. He can be reached at dlevine@olympicpt-ri.com.




1. www.oneweekjob.com/blog/2010/11/09/the-50-best-work-and-passion-quotes-of-all-time/ Accessed July 2014.

2. http://idealistcareers.org/12-quotes-that-will-encourage-you-to-follow-your-passion/ Accessed July 2014.

Build a Career Worth Having


Nathaniel Koloc, Harvard Business Review Blog

Reviewed by Kelly Sanders, PT, DPT, OCS, ATC

Author Nathaniel Koloc opens his article with some staggering statistics to illustrate what he describes as “chronic dissatisfaction in the workplace.” He cites Gallop’s 2013 State of the American Workplace study, which found that as many as 70 percent of working Americans were not fulfilled in their work.1 The more staggering statistic revealed that 18 percent of those working who were unfulfilled in their jobs, were actively undermining their co-workers.1 And these statistics are on the rise. In 2010, the Conference Board reported that in their study 55 percent of working Americans were dissatisfied with their jobs.2

Koloc hypothesizes that a key reason for high American worker dissatisfaction is lack of clarity in how one builds a satisfying career in today’s work culture. The author offers three key pearls of advice:

  1. See your career as a series of stepping stones, not a linear trajectory. Each stone is a project, opportunity, or even a job that can move you in the direction of your career goal. The idea is that you move onto stones that help you get closer to what your purpose is or what is meaningful to you. There is not just one path, there are lots of potential paths to get you to your goal and lead to work place fulfillment. Keep an open mind. It is a process… you generally do not get there in one step.
  2. Seek legacy, mastery, and freedom—in that order. Multiple research studies have found that there are three key attributes to fulfilling work.
    • Legacy: This means having a higher purpose, mission, or cause. Basically stated, you feel that in one way or another, your work matters and someone or something will be better after you have done your work.
    • Mastery: This refers to the acquisition of skills and/or talents that you enjoy using, so much so, that you identify yourself with these skills and/or talents. In the physical therapy world you might equate this with becoming a board-certified specialist and meeting the metrics to mentor in a residency.
    • Freedom: This is choice! You get to a point where you have the ability to choose with who you work, what projects you work on, where and when you work each day, and get paid enough to support your desired lifestyle.
  3. Treat your career like a grand experiment. You cannot control all aspects of the trajectory of your career. There are just too many variables. Consider a few that affect physical therapy: health care industry changes, politics/federal payors, economy, and local demographics. Given that, write your career hypothesis, and then with your experiences, work to validate it via different experiences, researching different avenues available, discussions with colleagues, and volunteering. Use these experiences to understand what brings you fulfillment.

Kelly Sanders, PT, DPT, OCS, ATC, is a member of the Impact editorial board and is president of Team Movement for Life, a 19-location outpatient physical therapy practice operating in California and Arizona. Kelly can be reached at kelly@movementforlife.com.




1. State of the American Workplace. Gallup Website: www.gallup.com/strategicconsulting/163007/state-american-workplace.aspx. Updated April 17, 2014. Accessed April 17, 2014.

2. Survey: More Americans Unhappy at Work. CSB News Website: www.cbsnews.com/news/survey-more-americans-unhappy-at-work. Updated January 5, 2010. Accessed April 17, 2014.

Advanced Class

By Angela Wilson Pennisi, PT, MS, OCS

Have you spent the last few years feeling like the deck is stacked against you in this post-Affordable Care Act era? As a parent of teenagers, I am always surprised by the correlations to be found between parenting and managing my clinic. Both of my sons have played tennis casually since they were children. When my older son started high school last year, joining the tennis team seemed like a natural fit. In preparation, he had begun playing more frequently and participated in some group lessons over the winter. He had a fun season this past spring and learned a lot.

This summer, his coach suggested an advanced training camp, hosted by our local university. With the popularity of competitive sports for children, I am sure many of you can relate to the premium prices these camps command. I signed him up, including a little lecture on how he needed to set aside lots of time to practice over the summer to make it worthwhile.

The first day of camp arrived, but instead of my son coming home to tell me how much he had learned and how excited he was, he was texting me to tell me how it was overcrowded and that he was playing with elementary school children. He was so unhappy that he asked me to talk to the camp director and ask for a refund. Remembering the waiver signed at registration, I knew the likelihood of obtaining a refund was slim, but I contacted the camp to let them know my son was not having a good experience and was not placed in an age-appropriate group.

The camp director called me that evening to follow up and essentially admitted that he had not realized that my son (height, 5’0″) was 15 years old. He was vague about my son’s skill level, but said that he would try him in the advanced group the next day. Taking advantage of this parenting moment, I let my son know the outcome and that he had better have a good night’s sleep and arrive at camp the next day with a fire in his belly to demonstrate that he belonged in the advanced group.

Happily, he was thrilled with his experience the next day and said that he had so much fun, he could not stop thinking about tennis after the camp was over for the day. He chastised me for suggesting he might not be up to the demands of the advanced group and told me how nervous he had been that morning. However, in the end the little guy held his own, surprised those who had underestimated him (including me!), and experienced success.

Is your practice the underdog in your community? Are your competitors underestimating you? Are you underestimating yourself? Can you take advantage of the element of surprise to finish with a strong fourth quarter and use the fire in your belly to prepare for your best year ever in 2015? Just like my son’s tennis game—you have the fundamental skills and preparation. How can you leverage them to compete with the big boys?


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