Accurate billing and coding are crucial to revenue optimization for your practice. However, insufficient documentation and common billing errors can lead to denied claims and lost revenue. Understanding the specific documentation requirements for physical therapy services, common billing errors to avoid, and strategies for maintaining CMS compliance will reduce your risk of improper payments, audits, and penalties.
Let’s dive into the details and learn how to bill Medicare correctly and minimize claims denials.
CMS Documentation Requirements
Insufficient documentation is one of the most frequent errors healthcare providers make when billing Medicare, particularly when certifying the care plan for physical therapy services.You must follow specific documentation requirements to receive Medicare reimbursement for physical therapy services.
Compliance with CMS regulations begins with the Plan of Treatment (POC). You must establish a POC before beginning treatment and include the following elements:
- Diagnoses: The specific medical conditions or diagnoses that require rehabilitation therapy
- Long-term treatment goals: The expected outcomes of rehabilitation therapy, including functional improvements and increased mobility
- Rehabilitation therapy service types: The types of rehabilitation therapy provided, such as physical therapy (PT)
- Type of therapy: A specific description of the therapy or intervention, such as therapeutic exercises or manual therapy
- Therapy amount: The number of treatment sessions per day
- Therapy frequency: The number of treatment sessions per week
- Therapy duration: The total number of weeks or treatment sessions
Include the signature and professional identity of the person who created the plan and the date it was established in the POC. This helps Medicare evaluate whether the physical therapy services are medically necessary.
If a review is requested, you must obtain the proper supporting documents from the referring doctor’s office that back up the medical necessity or from an inpatient facility.
Common Medicare Billing Errors
Even if you follow all the documentation requirements for Medicare reimbursement, common billing errors can lead to denied claims. The AMA identified the following coding errors that can result in lost revenue:
- Unbundling codes: Medicare and Medicaid payment rates are set by law, not negotiation, and are currently below the costs of providing care, leading to underpayment. Unbundling involves using different CPT codes for other parts of a procedure to increase reimbursement and profits for providers at the expense of Medicare and Medicaid.
- Upcoding: Providers sometimes submit codes to Medicare, Medicaid, or private insurers for diagnoses or procedures that are more serious or expensive than they performed. According to the False Claims Act, submitting incorrect billing codes, such as upcoding, can result in false claims and carry severe consequences, including criminal fines of up to $250,000 and jail time of five years.
- Reporting multiple codes without checking NCCI edits: Failing to check National Correct Coding Initiative (NCCI) edits may result in denied claims due to incorrect coding. NCCI ensures proper coding methods and prevents improper payments for Medicare Part B claims by analyzing code pairs automatically for edits and denying one code if an edit is detected.
- Inappropriate or incorrect modifiers. Billing errors and reimbursement issues can result from the incorrect use or omission of specific modifiers. An example of failing to include the appropriate modifiers or appending improper modifiers for a physical therapist could be submitting a claim for a 60-minute physical therapy session using the modifier 52 intended for a shorter session.
- Insufficient documentation for modifier 22: To use modifier 22, you must explain why extra time and work were needed and provide details of the tasks performed. For example, you must document the specific exercises and any modifications to the treatment plan if a complex patient requires extra work during a therapeutic exercise session.
Billing and Coding Best Practices for Medicare Reimbursement
In addition to analyzing common billing errors and applying correct coding, there are other steps you can take to improve your Medicare reimbursement rates and minimize claims denials.
- Keeping accurate records: According to a 2019 study, 1 in 5 patients detected errors in their health records, such as incorrect diagnoses, medications, and tests. You must maintain accurate patient records reflecting medical necessity to avoid billing errors and past-due payments.
- Double-checking your claims: Billers in your practice can run a line-by-line review of each claim using software that allows them to examine each code on a claim to ensure that it is accurate and meets the payer’s requirements. They can also check for coding errors, such as mismatched diagnosis and procedure codes. Your practice management software can also include a verification tool that ensures patients have proper coverage and identifies the correct CPT codes.
- Checking for NCCI edits. Billing for multiple codes without checking NCCI edits can lead to denied claims and lost revenue for providers.
- Encouraging transparent pricing and patient-centered payment options. Only 7% of practices ask for payment for deductibles and copays when scheduling an appointment. You can offer payment options such as mobile and credit card payments and payment plans to patients when they schedule their appointments. Price transparency and convenient payment options help ensure that patients know the costs associated with their care and make it easier to create a compliant, patient-focused payment plan.
Overview of CMS Compliance Rules
The AMA and CMS oversee HCPCS and CPT codes to report medical procedures and services and can only be used for purposes related to CMS programs. Other insurance companies may have their own rules for using these codes.
If you’re a Medicare provider, you need to collect and maintain patient information to minimize incorrect billing and overpayments. This includes identifying other insurance besides Medicare and determining if Medicare is a patient’s primary or secondary payer. Failure to identify other payers may be considered a violation of your provider agreement with Medicare.
You should do the following at the time of service with a patient:
- Obtain billing information during service using a CMS questionnaire or similar tool. This CMS questionnaire comprises six parts and asks about Medicare beneficiaries to identify the primary payer.
- Provide the designated carrier with all appropriate Medicare Secondary Payer (MSP) information on the Explanation of Benefits form. If submitting an electronic claim, provide the necessary fields and segments to process the MSP claim.
It is also important to follow these specific documentation requirements:
- Physician-approved plan of care: The patient must be under the care of a physician or NPP, who must approve the care plan. Orders, referrals, conferences, meeting notes, and correspondence may be proof of physician involvement.
- Patient-specific services: The type, frequency, intensity, duration, and skills needed to provide these services must be appropriate.
- Documentation for the services: Your documentation should include variables influencing the patient’s condition and progress toward goals through objective measurements.
- Include functional information as required: Document their current status, projected goal, and discharge status using G-codes and severity modifiers for Medicare’s functional reporting for every service date.
CMS Non-compliance Risks and Consequences
Non-compliance with documentation requirements can result in a high risk of improper payments for your practice. According to the 2021 Medicare Fee-for-Service Supplemental Improper Payment Data, the improper payment rate is 15.5%, which could lead to projected improper payments totaling $423 million. Insufficient documentation was responsible for 89.5% of improper payments, while other errors like coding and no documentation also caused improper payments.
Noncompliance also puts your practice at audit risk. Insurance carriers and the federal government regularly perform audits to detect fraud and abuse through the Health Care Fraud and Abuse Control (HCFAC) Program.
Errors such as entering the wrong code, using too few or too many digits, or confusing codes can lead to costly penalties and criminal charges. Excessive use of specific codes can also trigger an audit.
Making a false claim, such as submitting a reimbursement claim containing inaccurate or misleading information, can lead to civil penalties and fines. The penalty amount for each false claim can be up to $11,000 per false claim. You might also need to pay three times the damages suffered by the government due to the false claim.
Strategies for Maintaining CMS Compliance
Your practice needs an effective plan to maintain compliance with billing and coding. The Office of Inspector General (OIG) recommends a step-by-step approach to developing and implementing a voluntary compliance program.
The OIG only requires physician practices to implement some of the seven components of a full-scale compliance program. However, it’s a good idea to tailor a robust fraud prevention and compliance program to reduce your liability for fraud, waste, and abuse.
Consider adopting certain components most likely to provide an identifiable benefit based on your practice’s history with billing problems and other compliance issues.
The following steps can help you establish a culture of compliance within your practice and ensure you meet the requirements for billing and coding:
- Conduct internal monitoring and auditing: Your practice can start by conducting a baseline audit to find areas of non-compliance and improve execution. You should then conduct annual audits, review a random sample of medical records for accurate coding, and review all Medicare claims for accuracy.
- Implement written policies, procedures, and standards of conduct: The policies and procedures should identify risk areas and establish internal controls to counteract them. They can include standards guidelines for document retention and procedures, such as securing medical records and what happens to them if the practice is sold or closed.
- Designate a compliance officer: The officer should have the resources necessary to carry out their duties and enforce compliance. You can ask employees to act as “compliance contacts” if no designated compliance officer exists. They would be responsible for specific compliance tasks, such as preparing written policies and procedures or conducting regular audits.
- Conduct appropriate employee training and education: Employees need to understand compliance standards, policies, and procedures, as well as how to report compliance-related concerns. You should provide training upon hire, covering topics like coding requirements, the claim development and submission process, proper documentation, and billing standards and procedures. The OIG recommends that all employees involved in coding and billing participate in at least an annual training program.
- Establish a process for investigating compliance issues: Your practice should develop its own set of warning indicators and monitors, such as an increase in claim rejections, letters challenging claims, and the frequent use of codes. Following up on these warning indicators is essential for preventing future occurrences.
- Establish effective communication: Notices or compliance bulletin boards can help employees comply with an open-door policy and prevent misunderstandings. Your program should also include provisions for reporting and investigating fraudulent conduct and ensure anonymity for those involved.
- Enforce disciplinary standards through well-publicized guidelines: You must have an appropriate and consistent disciplinary action system. Employees who fail to report violations should be held accountable. The disciplinary actions can range from verbal warnings to criminal prosecution.
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