So Many Rules

stacks of books

Which ones do I follow?

By Paul J. Welk, PT, JD

Loyal readers of Impact magazine and other physical therapy publications may from time to time feel overwhelmed with the number of compliance issues that must be considered by a practice on a daily basis. Oftentimes a practice will find itself subject to multiple, and sometimes inconsistent, regulatory and contractual obligations from a variety of sources in connection with the same activity. Determining what action to take under these circumstances and identifying what requirements are relevant can be difficult. This article will use a short case example to illustrate a number of compliance issues that may warrant consideration in connection with one patient interaction.

Consider a scenario in which a patient is scheduled for a visit in a physical therapy private practice. The patient was referred by a physician who is a partner in an orthopedic practice that is located next door to the physical therapy clinic and is also the owner of the building in which the physical therapy clinic is located. At the start of the patient’s visit, which is scheduled as the last visit of the day, the only physical therapist working in the clinic had left for a personal obligation and the treatment was performed by a physical therapist assistant. Under this simple scenario, there are a number of material compliance issues to be considered in assessing whether the physical therapy services have been provided in a compliant manner and can be billed.

Initially, let us assume that the state in which the practice is located permits physical therapist assistants in the outpatient setting to provide services without the on-premises supervision of the physical therapist; therefore, the services are in compliance with the state’s physical therapy practice act. Too often, practitioners end their analysis at this point. But in this particular circumstance, consideration must also be given to the supervision requirements of the payor source. For example, under the Medicare program, in the private practice setting physical therapy services must be provided under the direct supervision of the physical therapist, which is generally defined to mean that the supervising physical therapist is present in the office suite at the time the service is performed.1 Therefore, if the patient in question was a Medicare beneficiary, compliance with the state’s physical therapy practice act would be insufficient to satisfy the requirements necessary to bill Medicare for the service provided given that the physical therapist was not in the office at the time of the treatment. However, if under otherwise similar circumstances, the patient was insured through a private insurance product, the practice would need to examine the reimbursement policies of the payor to determine whether the services would be reimbursable. Adding another slight twist to the original fact pattern, if the practice instead was a certified rehabilitation agency, a certified rehabilitation agency is required to have qualified personnel provide initial direction and periodic observation, a more relaxed requirement for supervision than is applicable in a private practice setting.2 As illustrated by these examples, while each of these scenarios may be treated similarly under the state’s physical therapy practice act, it is clear that other compliance requirements may be materially different.

As to the practice’s receipt of a referral from a physician who also holds an ownership interest as the practice’s landlord, a number of additional issues may also be implicated. Initially, it would be important for the practice to consider compliance with the Stark Law,3 which prohibits a physician from making a referral of a Medicare patient to an entity providing a designated health service (which is defined to include physical therapy services) if the physician has a financial relationship with the entity unless an exception applies. In addition to the federal Stark Law, it would be important to consider whether or not there may be similar state-level requirements. When physical therapy services are provided as a result of a referral prohibited by Stark, the physical therapy provider is not permitted to bill for services performed in connection with such referral.

Finally, the practice would need to confirm whether the real estate leasing relationship with the physician-affiliated landlord complies with the anti-kickback statute and, if not, what appropriate actions need to be taken.

This article is not intended to provide a comprehensive review of a compliance topic, but rather to illustrate the fact that one specific scenario may implicate multiple compliance issues that require consideration. In the author’s experience, all too often a practitioner who is practicing in compliance with one requirement, in this example the state practice act, fails to consider his or her other obligations. This issue is sometimes compounded when a practitioner attempts to model his or her practice after that of a colleague or competitor without giving consideration to the full scope of issues that require consideration. It is important to remember that all of the compliance obligations that affect a particular scenario must be considered, with the result often being that the strictest standard must be followed. When considering any aspect of practice, be certain to consider an appropriately broad scope of issues and avoid the common trap that complying with the most readily apparent compliance obligation is sufficient. As illustrated in the example with the physical therapist assistant, compliance is certainly achievable but cannot be assumed.


1 See Use of Physical Therapist Assistants (PTAs) under Medicare. www.apta.org/Payment/Medicare/Supervision/UseofPTAs. Accessed March 7, 2018.

2 Use of Physical Therapist Assistants under Medicare.

3 42 USC §1395nn (2018).

Paul Welk

Paul J. Welk, PT, JD, is a Private Practice Section member and an attorney with Tucker Arensberg where he frequently advises physical therapy private practices in the areas of corporate and health care law. He can be reached at pwelk@tuckerlaw.com.

*Please note that this article is not intended to, and does not, serve as legal advice to the reader but is for general information purposes only.