"Physical therapy is not a subspecialty of the medical profession and physical therapists are not medical doctors; we are a separate profession that provides a unique service that physicians are unable and untrained to provide."

Letter to the AMA from the APTA, Dec 2009

Tuesday, December 6, 2011

Hospitals Bounce Back but Florida Physical Therapists May Still Get the "Take Back Letter"

Florida physical therapsists may still be on the hook, beginning January 1, 2012, resulting in the dreaded "Take Back Letter" from Medicare for services provided to orthopedic patients who don't meet new Medical Necessity requirements under Recovery Audit Contractors (RAC).
"The physicians will receive a form letter which will be entitled a “Take-Back Letter” requiring return of any funds paid in conjunction with the affected hospitalization. 
This will affect all cardiologists and orthopedists involved in the care – both invasive and noninvasive.  
This may include outpatient reimbursement for follow-up care related to the hospitalization. It’s not clear whether other specialists or primary care physicians will also receive Take-Back Letters."

Peter R. Kovacek, PT, DPT, MSA of PT Manager reported Friday, December 3rd that Medicare was Tightening the Screws on high-utilization providers in high-utilization states, such as Florida, California, Michigan, Texas, New York, Louisiana, and Illinois.

The Financial Times, on Monday December 6th, reported that hospital operators, such as Tenet Healthcare, bounced back from the 11% share price drop on Friday:
"...but analysts remained concerned that government healthcare schemes may limit expensive cardiovascular and orthopedic treatments."
Physical therapists who treat post-surgical patients could see a drop in patient volume, beginning January 2012, from orthopedic surgeons.


  1. Is it based solely on utilization or on medical necessity as well? What if a provider has a larger caseload of Medicare patients?

  2. Thank you for your comment Dr. Religioso,

    There are more UN-knowns about the new Florida RAC audit initiative than there are "knowns".

    Much of the fear may be oversold as evidenced by the 11% drop in Tenet Healthcare, Inc. shares that all but bounced back to their previous levels by Monday, December 5th, 2011.

    I can comment on what is known about the new Florida RAC audit initative:

    Orthopedic surgeons and cardiologists are two providers with some of the highest CERT audit rates. CERT stands for Comprehensive Error Rate Testing and it is calculated and published every year by Medicare. Error Rates are known for many settings, all states, all specialties, all error types and all the Medicare carrier/intermediaries. For example,the national paid claims error rate in the Medicare Fee For Service program for the 2009 reporting period is 7.8% (which equates to $24.1 billion dollars).

    Service volume for orthopedic surgeons will almost certainly decline as hospitals prevent the doctor from admitting patients that do not meet strict coverage criteria. Exactly what those coverage criteria are and how difficult they will be to meet are still some of the unknowns.

    What IS known about the 100% pre-payment RAC audit is this:

    "...the review process is expected to last 30 to 60 days. If the RACs determine that a procedure was inappropriate, the entire hospital stay will be denied and physicians will be required to return any funds that were issued in relation to the hospitalization."

    The specific procedures expected to impact Florida doctors are the following:

    MS-DRG 458: Spinal fusion except cervical w/ spinal curv/malig/infect or 9+ fusion w/o CC/MCC
    MS-DRG 460: Spinal fusion except cervical w/o MCC
    MS-DRG 470: Major joint replacement or reattachment of lower extremity w/o MCC
    MS-DRG 490: Back and neck procedure except spinal fusion w/ CC/MCC or disk device/neurostim

    The other issue mentioned above ("the Take Back Letter") is the possible liability private practice physical therapists may face when treating patients referred by orthopedic surgeons whose conditions are subsequently determined to be Medically Unnecessary for Medicare reimbursable physical therapy benefits.

    If you are a private practice physical therapist who receives a high-volume of referrals from orthopedic surgeons you should take steps to prepare your clinic for possible decreases in referral volume.



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