Compliance 2.0


Rebooting your compliance program.

By Nancy J. Beckley, MS, MBA, CHC

The compliance landscape for outpatient therapy looks remarkably different entering 2016 than it has for the past few years. For a lot of practices an “out of sight, out of mind” attitude has gravitated to an “I cannot sleep at night” feeling. So what has happened over the past year? What are steps a private practice should take to mitigate compliance risks? How does a provider reboot its compliance program to be sensitive to the risks that are unfolding in the market?

Profiling: Big Data, Public Databases and Transparency

In 2014, the Centers for Medicare & Medicaid Services (CMS) released calendar year (CY) 2012 data regarding reimbursement for physicians and other providers billing under the Medicare Physical Fee Schedule. This data release was part of the bigger picture of CMS transparency creating an opportunity for the public at large to get a glimpse at Medicare dollars and statistics.

CMS gave an advance copy of the data on provider Medicare reimbursement to the Wall Street Journal (WSJ), which in turn created “Medicare Unmasked: Beyond the Numbers,” a publicly available lookup tool1. Other publicly available lookup tools soon emerged, including ProPublica. Much of the early buzz and publicity focused on physicians and other providers, including physical therapists in private practice, receiving high reimbursement from Medicare. Feedback from the provider community at large prompted CMS to be more comprehensive in the release of the 2013 data. The WSJ lookup tool includes a comparison of 2012 data to 2013 data.

The entire database can be downloaded at CMS in the public use files section. After you download the database, you will be able to research the data. For example, you could determine top group therapy payments by state, the numbers of ultrasound procedures by state, or determine the ratio of evaluations to reevaluations, or any or all procedure codes. What you will not be able to tell by analyzing the data is how many physical therapist assistants (PTAs) contributed to an individual therapist’s billings and payments. You will not be able to tell which therapists are potentially allowing their Medicare provider number to be used by providers not enrolled in the Medicare program.

Have you profiled yourself? Have you profiled all the enrolled providers in your practice? Where do you sit in terms of Medicare codes billed in your state and in the country?

Table 1 shows a high-level summary of the top physical therapists in Florida that was researched with the WSJ lookup tool with respect to total Medicare payments in 2013. Note that the last column provides a comparison to 2012. What do you know after looking at this table?

Policy in the Making: Office of Inspector General (OIG) Opines in Audit Reports on Therapy Policy and Statutory Requirements

The 2016 OIG Work Plan once again includes a review of physical therapists in private practice and is captioned as “Physical therapists—high use of outpatient physical therapy services.” Per the Work Plan:

“We will review outpatient physical therapy services provided by independent therapists to determine whether they were in compliance with Medicare reimbursement regulations. Prior OIG work found that claims for therapy services provided by independent physical therapists were not reasonable or were not properly documented or that the therapy services were not medically necessary. Our focus is on independent therapists who have a high utilization rate for outpatient physical therapy services. Medicare will not pay for items or services that are not “reasonable and necessary.”2

The OIG notes reference the Medicare documentation requirements for therapy services in CMS’s Medicare Benefit Policy Manual, Pub. No. 100-02, Ch. 15, § 220.3. The OIG also included physical therapists in private practice in the 2011, 2012, 2014, 2014, and 2015 Work Plan under the Office of Audit Services (OAS). In addition to audits under the Work Plan the OIG initiated a widespread audit of 400 physical therapy claims nationwide in 2014 out of the OIG Chicago office. The findings as a result of that audit have not been published.

The OIG has published several reports on physical therapists in private practice pursuant to the OAS initiatives under the Work Plan. A report on a New Jersey provider was released in 2013, followed by an Illinois provider in 2014 and reports regarding providers from New York and Puerto Rico were released in 2015. Additional audits are under way so expect to see further audit reports in 2016.

It is important to know that in a recent report the OIG disallowed plan-of-care delayed Medicare certifications that were obtained per the statutory guidance and manual instructions contained in the Medicare Benefits Policy Manual. They also provided different interpretation to the element required in the plan of care than the CMS manual guidance. When the OIG presents its audit findings and report to CMS for recommended actions (contained in the report recommendations), there is an opportunity for the provider to plead their case with the CMS official assigned to the case. Following this step, the provider has a chance to stave off the “extrapolated” payment with timely filing of the first level of appeals. If unsuccessful at redetermination, timely filing at the second level of appeals (reconsideration) can stave off recoupment once again. Unfortunately, recoupment begins if the reconsideration is unsuccessful even if an appeal to the third-level Administrative Law Judge (ALJ) is initiated.

So what is in this for other private practices? If the providers that have taken their OIG audit findings through the appeals process on OIG findings and with their rationale are unsuccessful, there will be “new policy” that other contractors can use with respect to plan of care elements, delayed certification, and provider supervision. Note to readers: None of this had to do with medical necessity. In fact, the New York provider with an extrapolation payment demand had a 4 percent error rate on medical necessity. Stay tuned for further updates. And by the way, ensure compliance with timely certifications!

Love Letters on Billing: Comparative Billing Reports

December saw the release of the fourth comparative billing report (CBR) for 8,000-plus physical therapists in private practice. The purpose of this comparative billing report was to highlight “providers with a specialty of physical therapy and contains data-driven tables with an explanation of findings that compare these providers’ billing and payment patterns to those of their peers in their state and across the nation.” Per eGlobalTech, the CBR contractor for CMS, the goal is to “offer a tool that helps providers better understand applicable Medicare billing rules.”3

Physical therapists selected to receive the CBR report received an analysis of their Medicare fee-for-service for Current Procedure Terminology (CPT) codes 97001, 97035, 97110, 97112, 97140, 97530, and G0283 with dates of services in CY 2014. The individual physical therapist receiving the CBR were compared to a group of other “rendering National Plan & Provider Enumeration System (NPIs) in their state as well as to national peer groups.”3 The CBR information is only available to the therapist receiving the CBR, and the data is not publicly available in aggregated form, so there is not a summary of the findings. Individual therapists received the following comparative information:

  • Table of summary utilization of each of the codes that includes allowed charges, allowed services, beneficiary count, and visit count.
  • Percentage of beneficiaries with the KX modifier in CY 2014 and comparison with state and national peer groups.
  • Average allowed minutes for the selected codes for CY 2014 and comparison with state and national peer groups. (Note: Each unit was configured at 15 minutes, even though therapists bill per 8 minutes with the number of codes constrained by time.)
  • Average allowed charges per beneficiary for CY 2014 and comparison with state and national peer groups.

As noted, this was the fourth comparative billing report for physical therapists in private practice. Previous reports were issued in 2010, 2011, and 2012. CBR001 was issued to the top 5,000 physical therapists billing with the KX modifier in 2009. CBR008 was issued to the top 5,000 physical therapists billing with the KX modifier in 2010 who had not received a CBR in 2010. So by the second CBR report 10,000 of the “top” private practitioners billing with the KX modifier had been profiled. CBR018 was issued in 2012 to the original 5,000 individuals receiving CBR001. The first 3 CBRs profiled the same CPT codes as the current CBR with the exception of 97001 and 97035.

The previous CBR reports were completed under a CMS contract to SafeGuard Services, and the associated materials including the sample documents and webinar materials are no longer publically available due to the change in CBR contractors.

As noted, the therapy landscape has changed with respect to data transparency, provider profiling, and technical audits. Have you completed a compliance risk assessment? Have you profiled the providers in your group practice? Have you adjusted your compliance monitoring and auditing activities based on these risks?


1. Medicare Unmasked: Behind the Numbers: Accessed November 2015.

2. 2016 OIG Work Plan: Accessed November 2015.

3. eGlobalTech Comparative Billing Report:


Nancy J. Beckley, MS, MBA, CHC, is certified in health care compliance by the Compliance Certification Board and is a frequent speaker and author on outpatient therapy compliance topics. She advises practices on compliance plan development and audit response. Questions and comments can be directed to

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