Medicare recognizes that PT documentation errors are not fraud

In a somewhat refreshing tone the Government Accounting Office issued a report that showed the US government made $18.6 billion in erroneous payments to Medicaid providers in 2008 but admitted that most of these payments are due to 'procedural glitches' and not fraud.

Deborah Taylor, acting director and chief financial officer of the Centers for Medicare & Medicaid Services at HHS told a panel of the Senate Homeland Security and Governmental Affairs Committee on April 22...

"Most of the improper payments... are generally not due to willful fraud... Rather, most of these errors are the result of documentation and processing mistakes.

Some physical therapists may not understand the money flow involved when Medicare pays a claim for PT services, in any setting...

"The law requires Medicare to pay claims within 14 days of receiving them,"

...explained Peter Ashkenaz, deputy director of media affairs for the Centers for Medicare and Medicaid Services to CNSnews.com.

"Given so little time to verify the services of the doctor or hospital performed before paying for them, Medicare often makes the payments first.

After the fact, they look for possible problems."

90% of the improper payments are due to 'inadequate documentation'. Of the $72 billion in estimated improper payments in 2008, Medicare and Medicaid Services accounted for 50% of the total.

Get the full report here (pdf).

What can physical therapists do to help?

Recognize that Medicare and the federal government are in a pinch: they need to provide mandated benefits and needed services to American citizens and others who qualify but they don't want to get ripped off.

Physical therapists and physicians are in the audit cross hairs not because PTs and MDs are fraudulent or dishonest but because costs are climbing uncontrollably.

How can you protect yourself?

Some of the tips I use in my own Medicare compliance plan (may be different for you) include the following:

• Get a baseline measurement


1. Self-report measures such as the OPTIMAL scale (self-report measures may be more reliable than performance measures and other, so-called, 'objective' tests.)


2. Performance measures - such as the Functional Reach Test to gain predictive information on falls.


3. Impairment measures - 'old school' measures like Straight Leg Raise and ankle dorsiflexion ROM, that still have predictive value.


4. Classification measures - powerful, predictive tools that summarize and assign patients to special treatment groups.


• Use a disablement model - physical therapists should avoid treatment decisions based on pathology. Instead, base your decisions on the ICF model to help you help your patients more.


• Use a compliance template - the Office of the Inspector General (OIG) has shown small practices how to incrementally implement a compliance template with breaking your bank.

There are more points to mention - many of which I discuss in my Bulletproof PT Tutorial you can get for free by signing up below with your first name and e-mail.

A physical therapist can remember when $650 billion was a lot of money for health care

Hearing about health care reform in the news all day long, I felt compelled to educate myself about some of the facts.

I turned to a trusted source, McKinsey & Company, to understand how all the pieces fit together.

Accessing this slide show may require a free subscription.

The 17-slide Flash demonstration tries to explain why the US spends $650 billion more than expected (compared to peer-nations) even though our disease prevalence is lower than average.

I can remember when $650 billion was a lot of money.

Key points:

• Most (2/3) of the $650 billion is spent on outpatient care, which more than offsets increased utilization by improved cost-effectiveness over inpatient and long-term care.


• US health administration costs are 5 times higher than peer average.


• Our multi-state regulatory system creates inefficiencies and waste.


• Public spending (Medicare et al) accounts for almost 50% of total spending.


• Private spending only accounts for 13% of total spending.


• Private payer reimbursement grows when Medicare price growth slows.

My takeaway from this centers on the next-to-the last point, the out-of-pocket (OOP) expense (at 13%).

How can private spending be expected to grow (think...

• larger co-pays,
  
• alternative medicine,
  
• cash-based physical therapy practices.)

...when comparable OOPs, like Japan, for instance, are in the 2-3% range?

The McKinsey report is sweet eye candy for the hardcore policy wonk but it's conclusion offers little that is new, different or hopeful for those of us with boots on the ground in the American health care trenches.

Are you physical therapy 'Audit Bait'?

Are you physical therapy audit bait?

How can you tell?

Well, are you an 'outlier' - that is, a high cost user of Medicare physical therapy services?

Physical therapists in private practice should look at their physical therapy patients to see how many have exceeded the physical therapy caps and by how much.

Also, see how many patients have gone over the average payment for a Medicare physical therapy episode.

Data Drilling

Medicare auditors will look first at billing outliers - those episode charges that exceed some threshold, say two standard deviations above the average (mean).

What is the mean and what is one standard deviation?

Data for this table comes from the Outpatient Therapy Alternative Payment Study 2 (OTAPS 2) Task Order - Utilization Report.

Outpatient Physical Therapy
	2004	2006	Per cent change
Mean dollars paid per user	$864	$788.06	-8.8%
Mean dollars paid per episode	$748	$682	-8.9%
Standard deviation paid per episode	$1,047	$782	-25.4%

"The Balanced Budget Act of 1997 enacted financial limitations (therapy caps) on outpatient physical therapy (PT) and speech-language pathology (SLP) combined... In 2006 the Automatic Exceptions Process to the caps began, enacted by the Deficit Reduction Act of 2005."

The result of the caps has been the observed decrease in per user and per episode dollars paid.

Note that the standard deviation also decreased - substantially.

One of the take home messages from this chart is that the caps work for cost savings.

From the OTAPS 2 report...

"... the payment reductions were incurred by providers tapering services for higher cost users that tended to skew mean payments upwards."

Do the caps restrict access to physical therapy services by Medicare beneficiaries?

Beneficiary Access

"The utilization analysis in this report clearly demonstrates that the outpatient therapy caps, as implemented in CY 1996 with the exceptions process had little or no impact on beneficiary access to outpatient therapy services. This is in sharp contrast to CY 1999 when the caps were implemented without an exceptions process."

So, the caps decrease costs by decreasing therapy services to 'higher cost users' - that is outliers.

Finally, the exceptions process seems to work to preserve access for those beneficiaries (patients) who need physical therapy the most.

What do you do if you are an outlier?

Some physical therapists may be legitimate outliers.

In other words, their patients need physical therapy services more intensively or more frequently than the general population.

In my area of the country, I could be a geographic outlier because some local health care providers (doctors and physical therapists) have told their patients that the Medicare cap is a 'hard cap' that cannot be exceeded.

If I apply the cap based on medical necessity then my average charges will be higher than my local peers.

Some physical therapists are afraid to append the -kx modifier and exceed the cap.

What do you do?

Show your work

Remember in high school you could get partial credit on a math test if you showed how you got to the final answer? Well, Medicare is like that.

You can be an outlier on costs if you show your work.

Show that your patients need physical therapy and that they qualify for the -kx modifier on your charge slip (medical necessity).

Show that you are getting your patient better (expected improvement in a reasonable time frame).

Show that your services are skilled (physical therapist decisions and physical therapist assistant judgments).

If you are not sure how do some or all of these Medicare criteria go and download some of the free resources at www.BulletproofPT.com.