Physical Therapy Billing
Fuctional Limitation Reporting (FLR)
G-Codes, KX Modifier,
(12 Things Every Biller Must Know!)
What is the Therapy Cap Amount for 2013?
In 2013, the annual per beneficiary therapy cap amount is $1900 for physical therapy and speech language pathology services combined, and there is a separate $1900 amount allotted for occupational therapy services. After $1900, if medical necessity is properly supported, therapists may request an automatic exception (using the KX modifier) for claims that are between $1900 and $3700 in Medicare allowable.
Medicare defines medical necessity as services that are: Reasonable and necessary, for the diagnosis or treatment of an illness or injury or to improve the functioning of a malformed body member, and, that are not excluded under another provision of the Medicare Program.
What is the Purpose of Functional Limitation Reporting?
G Code data is for informational purposes and not linked to reimbursement.The therapist's projected goal for functional outcome at the end of treatment needs to be reported on the first claim, then again at ten visits, and again at the end of treatment.
Functional limitations and goals are to be reported at:
1. Initial evaluation
2. Every 10 visits
3. At discharge
Modifiers indicate the extent of the severity and complexity of the functional limitation.
What Happens When the Therapy Cap is Exceeded?
If treatment exceedes the $1900 threapy cap, and the additional treatment is supported by medical necessity, an automatic exception using the KX modifier is used. No specific documentation is required to process automatic exceptions. The clinician alone is responsible for making sure the patient qualifies according to the Medicare Manual Guidelines.
By attaching the KX modifier (to a therapy procedure code that is subject to the cap limit), the provider is attesting that the services billed:
1. Qualified for the cap exception
2. Are reasonable and necessary services that require the skills of a therapist; and
3. Are justified by appropriate documentation in the medical record.
What Happens when the Maximum $3700 Threshold is Exceeded?
Treatment after $3700 requires a manual medical review for exemption and reimbursement. As of April 1st, 2013 Medicare Administrative Contractors (MAC) will work through Recovery Audit Contractors (RAC) to establish medical necessity. RACs are allowed 10 days to respond to documentation detailing medical necessity.
What are Advance Beneficiary Notices of Noncoverage (ABNs) and When Do I Need One?
Once the $1900 therapy cap is exceeded, in order to receive any CMS reimbursement whatsoever, a signed Advance Beneficiary Notice (ABN) is required from your patient with an explanation that services beyond the cap amount may not be covered. This protects both you and your patient, and it allows you to submit the claim to Medicare with the KX modifier for a denial pending RAC medical review. The modifiers that can be used are GA/GY/GX.
Functional Limitation Reporting and G-codes
The reporting of the functional limitations on the claim form will be implemented on January 1, 2013. To assure smooth transition, CMS sets forth a testing period from January 1, 2013, until July 1, 2013. After July 1, 2013, claims submitted without the appropriate G-codes and modifiers will be denied.
How to use all the new G codes and modifiers
- G8978 Mobility: Walking & moving around functional limitation, current status, at therapy episode outset and at reporting intervals
- G8979 Mobility: Walking & moving around functional limitation, projected goal status, at therapy episode outset, at reporting intervals, and at discharge or to end reporting
- G8980 Mobility: Walking & moving around functional limitation, discharge status, at discharge from therapy or to end reporting
Changing & Maintaining Body Position
- G8981 Changing & maintaining body position functional limitation, current status, at therapy episode outset and at reporting intervals
- G8982 Changing & maintaining body position functional limitation, projected goal status, at therapy episode outset, at reporting intervals, and at discharge or to end reporting
- G8983 Changing & maintaining body position functional limitation, discharge status, at discharge from therapy or to end reporting
Carrying, Moving & Handling Objects
- G8984 Carrying, moving & handling objects functional limitation, current status, at therapy episode outset and at reporting intervals
- G8985 Carrying, moving & handling objects functional limitation, projected goal status, at therapy episode outset, at reporting intervals, and at discharge or to end reporting
- G8986 Carrying, moving & handling objects functional limitation, discharge status, at discharge from therapy or to end reporting
G8987 Self care functional limitation, current status, at therapy episode outset and at reporting intervals
- G8988 Self care functional limitation, projected goal status, at therapy episode outset, at reporting intervals, and at discharge or to end reporting
- G8989 Self care functional limitation, discharge status, at discharge from therapy or to end reporting
Other PT/OT Primary Functional Limitation
G8990 Other physical or occupational primary functional limitation, current status, at therapy episode outset and at reporting intervals
- G8991 Other physical or occupational primary functional limitation, projected goal status, at therapy episode outset, at reporting intervals, and at discharge or to end reporting
- G8992 Other physical or occupational primary functional limitation, discharge status, at discharge from therapy or to end reporting
Other PT/ OT Subsequent Functional Limitation
G8993 Other physical or occupational subsequent functional limitation, current status, at therapy episode outset and at reporting intervals
- G8994 Other physical or occupational subsequent functional limitation, projected goal status, at therapy episode outset, at reporting intervals, and at discharge or to end reporting
- G8995 Other physical or occupational subsequent functional limitation, discharge status, at discharge from therapy or to end reporting
It Is necessary to assign at least 2 modifiers to each G-code line.
The first modifier is the functional severity modifier which will reflect either the current status or projected goal status of the limitation, depending on which code is used. A seven-tier percentage scale (see below table) will be used for this particular reporting.
The second modifier will be the familiar GP, GO or GN depending on the appropriate discipline (physical therapy, occupational therapy or speech therapy).
Modifier Impairment Limitation Restriction
CH - 0 percent impaired, limited or restricted
CI - At least 1 percent but less than 20 percent impaired, limited or restricted
CJ - At least 20 percent but less than 40 percent impaired, limited or restricted
CK - At least 40 percent but less than 60 percent impaired, limited or restricted
CL - At least 60 percent but less than 80 percent impaired, limited or restricted
CM - At least 80 percent but less than 100 percent impaired, limited or restricted
CN - 100 percent impaired, limited or restricted
Physical Therapy Billing
[ Article ]
Physical Therapy Billing is unique in that one is billing for the modalities and therapy treatment rendered by the Physical Therapist. A Physical Therapist is unique in that they access, prescribe, and render their own treatment plan. As they are not doctors themselves, they do so under the supervision of a referring physician. The goal of the Therapist is the rehabilitation of the muscular system that was injured; and as there are over 300 muscles throughout the body all of them connected to tendons and soft tissue, the Billing of physical therapy treatment can become complex.
Furthermore, the practice of Physical Therapy can be broken down into specialty emphasis consisting of Acute Care, Aquatic-PT, Cardiovascular and Pulmonary PT, Clinical Electrophysiology and Wound Management, PT Education, Geriatrics, Hand Rehabilitation, Home Health, Neurological, Oncology, Orthopedics, Pediatrics, PT Research, Sports PT, and Women's Health. And the field of Physical Medicine and Rehabilitation or Physiatry of which Physical Therapy is a part of is also shared by Occupational Therapy (OT) and Speech Therapy (SP).
In Physical Therapy Billing one must take into consideration that as many as four different payers can be involved in a single payment scenario, and that a single individual could have several simultaneous cases open due to multiple injuries such as an auto accident, which would be covered by auto insurance; a work related accident, which will be covered by Workman’s Compensation; and an ordinary strain brought on by a sporting event which may be covered by the person’s private insurance or their spouse’s (or both).
Then whatever is not covered by health insurance will ultimately become the patient’s responsibility, (referred to in billing circles as ‘the patient portion’), which can take the form of Co-pays, Deductibles, along with any treatments that were not covered under the patient’s insurance benefits. Physical Therapy Billing does not touch on prescription medications, as pharmacies bill out their own prescription claims separately. Only the services rendered by the Physical Therapist and their assistants are billed under Physical Therapy Billing.
PT Billing Process Step by Step
Following is a Step by Step map of the Physical Therapy Billing process in detail:
Step #1: CREATE CHARGES
- Enter Patient
- Create Case
- Enter Billing Info
- Print Claim or Batch Charges
Step #2: SUBMIT CLAIMS
- Batch Claims
- Upload Batch
- or Print Paper Claims
Step #3a: POST PAYMENTS (EOBs)
- Enter Check
- Search Patient
- Apply/Post Payment
- Adjustments / Write Off or Transfer Balance
- Submit any SECONARY Claims / Repeat Step #3
Step 3b: PATIENT PAYMENTS: Adjust, Write Off, Trans Bal
Step 3c: ELECTRONIC REMITTANCE ADVICE (ERAs)
- Download ERAs
- Review Payment
- AutoPost Payments
- Review Posting Report
Step #4: - INSURANCE FOLLOW UP & COLLECTIONS
- Search Aging Claims
- Review Claim History
- Call Payer
- Set Reminders
- Correct Claim
- Rebill Claims
Step #5: - MONTH END RECONCILIATION & CLOSE
- Generate Charges-Payments Report
- Reconcile Month
- Close Month
- Generate Financial Reports
The Patient Encounter
Checking Insurance Benefits
Before a patient arrives for their physical therapy, Best Practices dictate that the patient’s insurance is validated and that it is verified to include Physical Therapy treatment. Verification of Insurance eligibility also reveals any patient’s Co-pay and any Deductible they may have. Hounding down payments after a patient has left the office can be time consuming, expensive, and highly ineffective, so it is imperative that patient responsibility be determined and collected before the patient leaves.
The Initial Evaluation
The patient encounter begins with a referral from the primary care doctor or specialist, and it begins with a comprehensive review of systems related to the injury. This exam is performed by the Physical Therapist. Physical Therapy is a specialty field and Doctors rely to a great extent on the assessment of the Physical Therapist to the severity of the injury, on the prospects of rehabilitation, and for a rehabilitation treatment plan referred to as a Plan of Care (POC)
Unless the referring doctor is also a Physiatrist or Doctor of Osteopathy (an MD who specializes in muscular and soft tissue, and who is able to give injections and prescribe medications), it is almost always the case that a PT’s assessment, recommendation, and plan are subscribed to without second thought by the referring physician.
PT Treatment Codes
The current set of treatment codes are ICD-9, which stands for the International Classification of Diseases, 9th Edition published by the World Health Organization for health management and clinical purposes. This is being currently replaced by the far more comprehensive ICD-10 which expands by ten times the existing codes. IDC-10 is to take effect in January, 2015.
“Superbill” is the nickname typically given to a Therapist’s cheat sheet of most commonly used Diagnosis and Procedural Codes. This document is often handed or faxed to the Biller as the primary source document used by the Biller to determine the proper level of coding for each patient encounter (See an example of a Physical Therapy Superbill here).
Billing The Initial Eval
An initial evaluation by a Physical Therapist is billed out to insurance as CPT Code 97001. In addition to the examination, if any modalities or treatments are also rendered, it will require a 25 modifier.
Treatment could include therapeutic massage, electronic muscle stimulation, ice therapy to reduce swelling, stretching, muscle reconditioning, therapeutic exercise, and any other rehabilitative activities prescribed by the Physical Therapist in the Plan-of-Care signed off on by the referring physician.
Although there can be hundreds of diagnosis for all potential injuries, Physical Therapy and Physical Therapy Billing focuses on the dozen or so rehabilitative treatment procedures and activities that can be rendered by the Physical Therapist and staff. There are more, but the most commonly used Procedural Codes for Physical Therapy Billing are as follows:
- 97001 Initial Evaluation
- 97002 Re-evaluation. Used when a significant change in the patient's condition or treatment plan occurs,
such as a
patient suffers a stroke or serious fall which changes their Plan-of-Care (POC) [almost requires
a 25 modifier in order to be paid]
- 95852 Range of motion measurements not part of an examination
- 97750 Physical performance test
- 97014 Electronic Muscle Stimulation (EMS)
- 97035 Ultrasound Treatment
- 97010 Ice Therapy
- 97110, 97112 Therapeutic Exercise
- 97545 Work Hardening/Conditioning (after initial 2 hours +97546 each additional hour)
- 97150 Group therapy
- 97116, Gait Training
- 97110 Balance Activities
- 97010-97028 Supervised service that does not require the presence of the therapist (eg. Stretching, walking,
other non-specified therapeutic activities required by the POC)
- 97542 Wheelchair management / instruction (each 15 minutes, 1 unit)
- 97535 Self-care/home management
- 97032- 97039 Functional Maintenance Program/Home Exercise Program
Occasional, Less Commonly Used PT Codes:
- 97760 Splint fabrication: Orthotic management and training, including assessment and fitting of upper extremity,
lower extremity, and/or trunk, each 15 minutes
- 97597, 97598, and 97601, 97602: Physical Therapy Wound Debridement. Used when treatment is delivered under
a Therapy Plan of Care (POC). (The patient’s medical record must show documentation supporting the necessity of
a therapist’s skills as well as objective measurement of significant patient improvement).
- Code 97601 is defined as the removal of tissue from wound; selective debridement without anesthesia by scissors,
scalpel, tweezers, high pressure water jet, billed per session.
- 97602 is non-selective debridement, without anesthesia with wet-to-dry dressings, where enzymatic abrasion may
be present, billed per session
- Do not assign both 97601 and 97602 for the same wound
Group Therapy Codes
- 97150 Therapeutic procedure, group with two or more individuals
- Requires constant attendance of physician or therapist
- Simultaneous treatment of two or more patients who may or may not be performing same activities where
therapist is dividing attention among patients.
- Group and individual therapy may occur on the same day
Billing of Post Evaluation Treatments
After performing the initial evaluation, the Billing Code for the Physical Therapy appointment changes from 97001 (initial eval) to billing out just the therapies. The therapeutic treatments and activities performed by the PT or their assistants will follow the treatment Plan-of-Care submitted to the referring physician by the physical therapist. In a Work-Comp or auto accident injury, treatment could go on indefinitely, but under private insurance or Medicare, patients are typically allowed 16 weeks of treatment per incident.
CPT Code Modifiers
Physical Therapy Billing is done by the treatment date of service, but Insurances in order to avoid paying duplicate claims automatically reject identical dates of service. But it is not uncommon for a patient to attend therapy more than once a day due to schedules or whatnot. Because Physical Therapy is billed by date of service and insurances reject same dates of service out of hand, this must be overcome by the use of a 59 Modifier, which tells the insurance payer that it is not a duplicate claim, but a valid claim for two treatments on the same day. Physical Therapy Billing has other Procedural Code Modifiers that are commonly used to communicate variations within the Physical Therapy Billing codes themselves. These include the modifiers 25, 21, 51, and GP. Using the wrong modifier will automatically trigger a red flag and persistent overuse triggers suspected insurance fraud.
- 25 Modifier. Used in conjunction with CPT 97001 for new patients, periodic re-evaluations, re-injuries, and
release from active care discharge counseling.
- 21 Modifier. Used on the occasion that the physical treatment exceeds the highest level of coding for a
procedure, such as prolonged patient counseling. The 21 modifier almost always requires documentation.
- GP Modifier. Used when services are delivered under an outpatient physical therapy care plan (eg. by Home
Health Physical Therapist).
National Correct Coding Initiative (CCI)
Edits are the term used to catch claim errors in electronic claim submissions. The National Correct Coding Initiative (CCI) Edits indicate services that should not be billed together. All Physical Therapy claims that are submitted to Medicare are subject to CCI edits, which include Mutually Exclusive Code and codes that are NOT normally performed together.
Managing The Revenue Cycle
Patient Visit to Final Payment
CLAIM ERRORS & REJECTIONS
The CMS-1500 Form is the standard paper claim form used by health care professionals to bill Medicare. It has been universally adopted by all U.S. Health Benefit Payers except New York State Workman's Compensation, which still uses the C-4 Form. There are 33 fields on the CMS-1500 Form, eleven of which are required, meaning that a claim will automatically be rejected if left blank. See a complete detailed map with a Field by Field Explanation of the CMS-1500 Form.
About 5% of claim errors are the result of Payer-specific edits, meaning that a particular payer wants specific data in particular fields, and that it will reject the claim if noncompliant. This is of little consequence as the claim can easily be corrected and resubmitted minutes after understanding the rejection code that is supplied by the payer.
Research shows that the other 95% of claim rejections happen because of 12 common errors resulting from typos and unconscientiously inputted data; such as wrong date of birth, incorrectly entered policy numbers, or required fields that were left empty. Simply put, it’s a matter of garbage in, garbage out. It should be assumed that all but a small handful of claim rejections are avoidable merely by entering data correctly and making sure that required fields on the CMS-1500 Form are properly filled in.
There are over 4,000 insurance payers in the U.S, so a seasoned Biller has thousands of pieces of knowledge under their belt. The good news is that a Biller normally bills out the same dozen insurances on a daily basis, so for the conscientious Biller, claim errors will occur infrequently such as when an insurance payer changes their rules without telling anyone, or when billing a brand new insurance that come to find out has different rules required to adjudicate the claim.
Denials are different than rejections in that the claim was accepted by the payer as properly filled in, but denied payment due to a number of reasons, such, or medical necessity documentation required. These type of denials are easily handled by understanding the error code.
Then there’s the bad kind of denials –the avoidable kind, when claims are denied due to lack of benefits, or lack of prior authorization, and the Therapists ends up getting the shaft (no payment). Occasionally these happen because of honest mistakes by inexperienced staff. Experienced Billers rarely see benefit denials and numerous benefit denials will eventually get you unemployed. Benefit denials happen when the person in the front office that entered the appointment fails to check insurance eligibility before the patient arrives.
Best Practices in Physical Therapy Billing
It’s very important to understand that although a denied claim can be resubmitted and appealed, this comes at a surprising cost. Hard research tells us that the cost of submitting the initial medical insurance claim is approximately $3.25. But resubmitting the same claim due to a denial costs an average of $57. So making certain that benefits are in place, and that the claim form is correctly filled the first time can mean the difference between the profitability and bankruptcy of a practice.
Best Practices in Physical Therapy Billing require: 1.) An avoidance of common errors. 2.) A knowledge of ‘The Payer Game’ as some payers will deny claims for no legitimate reason, and 3.) A organized, fanatical, daily approach to appealing unpaid claims. Having the right Physical Therapy Billing Software is a strategic component to effectively managing the patient-to-pay revenue cycle.
Billing Commercial Payers
Commercial payers can be notorious for stalling on payments, even to the point where a Biller is dead certain that the claim was denied out of hand for no reason whatsoever. A random study of 14 well managed and unrelated practices showed that over two thirds of their unpaid claims 90 days passed overdue were Commercial payers refusing to pay a claim that had verified benefits, an authorized referral, and where medical necessity was properly documented –and there were still issues getting paid.
Accounts Receivable are the bane of a Biller’s existence, and Commercial payers are their nemesis. The worst offenders are often the big players such as Blue Cross / Blue Shield and United Healthcare. It is commonly expressed among Billers “Medicaid might not pay much, but what they do pay, they pay quickly”. A proverbial bird in the hand verses two in the bush.
Commercial payers are Non-Government/State payers. Examples of Commercial payers would be BC/BS, United Healthcare, Aetna, and Cigna (among thousands of others). Government and State payers include Medicare, Medicaid, Tri-Care (veterans), Railroad (retired government workers), State Worker’s Compensation, Auto Insurance, and Indigent Care –wellness programs for underprivileged children whose funding are often a blend of Medicaid and other state and County sources.
Appealing Denials / Handling Stalling Tactics
The medical industry is the only profession were getting paid for rendered services is optional. In no other profession is a gallon of milk $3.95, and then someone says, oh, “you only get $1.65, take it or leave it”.
The art of managing unpaid claims by a medical Biller is an art of proactive diligence. When claims are submitted electronically, then after 10 days there’s no response from the payer, this needs to trigger alerts to action. This is where effective software plays a crucial role in managing claims. Take for instance if a typical group of Physical Therapists are treating 60 patients per day, then inside of a month the Biller will be handling over a thousand claims. Within a short period of time you’d be working almost 4000 thousand claims. Without excellent Physical Therapy Billing Software, hundreds and hundreds of unpaid claims would go unattended and fall through the cracks. Best practices in Physical Therapy Billing require that organized, fanatical, and daily attention is given hounding down unpaid insurance claims.
From a Physical Therapist’s point of view, below are the top reasons why therapy evaluations are denied by Medicare. Avoid overuse, or routine performance of re-evaluations.
Routine annual or non-mandated evaluations
Routine re-evaluations without documentation of a change in condition or impairment
Evaluation for deconditioning after hospitalization when prior function is anticipated to return spontaneously
Routine pre-operative evaluations to determine post-surgical needs
How to Avoid Claim Reviews!
Observing Physical Therapy Coding Best practices will keep you from being targeted for claim reviews:
- Avoid overuse of High level codes
- Avoid Routine billing of 4 or more services per visit
- No changes in treatment protocol
- Extended care for non-complicated conditions
- Old onset date on claim form
- Unusual diagnostic testing
- Repeat diagnostic testing
- Long term disability
- Preventative or supportive care
Collections / Revenue Recovery
Collections and Revenue Recovery are a matter of last resort; and strong, well-managed practices try to operate with a near zero A/R balance. But in the real world, Insurances refuse to pay and patients may have no money to pay. The elderly for instance, these bad debt balances are generally written down because if Medicare or Medicaid refuses to pay, there is no hope of getting paid from someone who is indigent. If someone has means of paying, then payment arrangement can be made and these arrangements must be managed.
At the discretion of the owners, others can be sent to collections. It is a well-documented fact that claims which remain unpaid for over 120 days, have only a small chance of getting paid, and it represents a significant problem to a practice’s cashflow and viability.
The goal of maintaining best practice in physical therapy billing is to avoid, as much as is possible, ever allowing eligibility to go unchecked, claim error, rejections, denials, or collections. But in the event that they inevitably happen, the Billing Professional steps in and saves the day, making all things right by diligently maintaining best practice in physical therapy billing.
Month End Close
The importance of closing out the month is so that you have a complete reconciliation and accurate accounting of
the month's financial and billing activities. Some Physical Therapy Billing Software such as ours has a flexible Month End close, meaning that you can still post payments but cannot add any new dates of service to the month. This is referred a soft close, which gives you flexible time to finish out the month's payments and adjustments and patient accounting.
Article written by Michael J Sculley who
is solely responsible for it's accuracy.