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.
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