Best Practices in Medicare Billing

Posted By: Gail Heather Zitterkopf Practice & Advocacy,

You may recall reading an article published in the New York Times on April 28, 2014 regarding fraudulent billing practices of a physical therapist. Based on newly released Medicare data this therapist appeared to have treated approximately 1950 Medicare patients in 2012 resulting in 183,000 treatments in a year and over $4 million in Medicare reimbursement.  Assuming a physical therapist works a 40 hour work week for 50-weeks per year, it would equate to 2,000 possible billing hours.  The practice owner explained that these high numbers attributed solely to him were a result of billing forapproximately 2 dozen physical therapist and physical therapist assistants working in four offices and all of their charges were billed under his Medicare billing number.

There are many areas in outpatient physical therapy that increase the likelihood of a Medicare audit. A guideline to assist therapist in writing documentation to decrease the risk of audit is located at:   Practices which increase the likelihood of Medicare audit include the following:

  • Accepting cash from patients for services covered under the Medicare benefit and/or without ABN on file.
  • Billing excessive one-on-one units of service at each visit (4-6 units/direct contact services) or excessive frequency of services.
  • Billing for “not medically necessary” services without ABN and/or services are not medically necessary.
  • Billing for maintenance care.
    • Maintenance doesn’t require skill; however maintenance that requires skilled care and is documented appropriately maybe reimbursable.
  • Billing for one-on-one codes when not supported in documentation.
  • Billing for services provided by students, aides/techs or other non-qualified providers.
  • Billing under one individual’s NPI (often a private practice owner) rather than individual NPI’s of PT who provided the care (triggers high utilization trend audit)
  • Duration/Frequency is not consistent with that identified in the Local Coverage Determination (LCD). ***Check your LCD website for coverage determination. ***
  • Fraudulent modifications of documentation post denial or request for records.
  • Frequent use of KX modifier that is greater than the norm.
    • 19.5% of Medicare patients require services beyond the 2014 Medicare cap limit $1920 for physical therapist (PT) and speech-language pathology (SLP) service combined.
      • Patients may qualify to get an exception to the therapy cap limits so that Medicare will continue to pay its share for your therapy services after you reach the therapy cap limits. Your therapist must:
      • Document your need for medically reasonable and necessary services in your medical record
      • Indicate on your Medicare claim for services above the therapy cap limit that your therapy services are medically reasonable and necessary
      • A Medicare contractor will review your medical records to check for medical necessity if you get outpatient therapy services in 2014 higher than these amounts:
        • $3,700 for PT and SLP combined
        • $3,700 for OT
      • In general, if your therapist provides documentation that your services were medically reasonable and necessary, you won’t have to pay for costs above the $1,920 therapy cap limits.
  •  Insufficient documentation and/or billing for services not provided or not documented. Use APTA’s
  • Omitting total and direct contact time.
  • Plan of Care not signed and/or not recertified by a physician.
  • Routinely waiving copays and deductibles under Medicare or private payor agreement.
    • Waiving copays as standard practice is only acceptable for patients who demonstrate financial hardship and is documented in the medical record.
  • Signatures are not legible.
    • Includes physical therapist on documentation and physicians on plan of care.  Possible solution could be use of a signature log.
  • Stamped signature on Plan of Care and/or therapist notes.
  • Upcoding or unbundling.   An example of upcoding would be billing ‘x’ over ‘y’ due to improved provider payment.   Unbundling occurs most frequently with codes such as e-stimulation where a practitioner would like to recoup the electrode expense and bills for this separately whether to Medicare or requests the patient for a cash payment; when the cost of the electrode has already been rolled into the e-stimulation code.


Gail Zitterkopf, PT, DPT, CLT– earned her Bachelor of Science degree from The University of Arizona, and her Doctorate of Physical Therapy degree from Northern Arizona University. She is presently in Texas Woman’s University PhD program. She works for Memorial Hermann, a hospital based outpatient woman’s health program in Houston, TX. She enjoys teaching Les Mills classes including Body Pump and Body Flow as well as competing in endurance events. In her spare time she enjoys volunteering with her Golden Retriever with Caring Critters in the Animal Assisted Therapy Program