Let's Help Each Other

Physical therapy is changing rapidly. As a PT with more than thirty years of experience, the changes observed in the last ten years triple those of the first twenty years. The pace of change is not slowing down. The Medigraph Blog will serve as a forum that will enable us to exchange ideas and assist each other. This blog will be used to share billing, documentation, and any other ideas to improve any aspects of our profession. If we share what we have learned, we can develop a resource that enables our collective understanding to advance our careers.

As profit margins grow smaller and expenses grow larger, we need to assist each other to survive and prosper. If we share our experiences we can help each other to grow professionally, administratively, and financially. Our professional lives, our livelihood, and our personal lives are intertwined. Our resources individually are limited. Together we can accomplish more than we can individually. Let's help each other


Tom Kane, PT
MediGraph Software

Aetna MPPR
4/14/2012 4:46:00 PM
Payment issues remain a focal point of every practice.  Usually, the two trendsetters for medical reimbursement are the Blues and Aetna.  Of particular interest for PT is Aetna’s methodology for the MPPR (application of its multiple procedural payment reduction ) policy.  Aetna varies from the policies inforced by the CMS (Centers for Medicare and Medicaid Services.  CMS has 1 payment rate and payment structure that is based on geographic areas.  Aetna has  different payment structures for the same area, which means that  does not apply exact CMS calculations to determine a final payment amount.  Aetna reduces the fees based on second and subsequent therapy services on the contribution of the practice expense relative value unit (RVU) to the total RVUs for a given procedure. Unlike CMS, Aetna does not use geographic cost indexes (GPCIs) in calculating its reduction. An example of Aetna’s methodology can be found below.
As most have now heard, the ICD 10 implementation has been delayed until 2014.
Tom Kane, PT

5010 Saga Continues
3/15/2012 3:17:00 PM

CMS has announced that it will postpone enforcement through June 30, 2012 for any covered entity that is required to comply with updated HIPAA.   Though MediGraph was compliant for the initial start up date, many health care providers were not ready.  Furthermore, the bureaucrats  themselves were not ready to enforce their own standards.  The billing for all health care has become a cumbersome process that government has made worse.  For this reason, if a MediGraph subscriber wishes to employ a full service billing company.  Please call for a referral to such a company.



Tom Kane, PT  

CMS Audit Guidelines; Minimize Your Risk
2/4/2012 11:50:00 AM

CMS has recently released a fact sheet that outlines the steps that PTs should take to avoid an audit.  Comprehensive Error Rate Testing (CERT) found that the error rate for PT is high.  The primary cause for a PT audit is insufficient documentation.  The specific issues that contributed to this finding included:

    1.  Missing or incomplete plans of care.

    2.  Missing physician signatures and dates for plan of care and certifications.

    3.  Missing total treatment times.

    4.  Missing certification and re-certification.

    5.  KX modifier.

    6.  Billing for services under one PT provider number instead of billing under each PT.

To minimize audit risks, additional suggestions include:

              1.  Billable services must be provided by a PT ot PTA.

              2.  Proper supervision of PTAs. For Medicare, private practice settings require direct on premise supervision.
                  (Always follow State laws as well). 

              3.  If 1 on 1 codes are employed, the patient contact must be direct.

              4.  Co-treatment is not billable in outpatient settings.

              5.  Comply with the 8 Minute Rule (8-22 minutes = 1 unit, 23-37 minutes = 2 units, etc.).

              6.  Treatment is Medically Necessary.

              7.  Billed services are not up-coded or unbundled.

              8.  Do not bill for student services.

              9.  Notes and signatures are legible.

              10.   Only written or electronic signatures (no stamps).

              11.  Every PT is enrolled in Medicare and has a provider number.

These topics have been covered in previous posts on this website, especially from the RAC perspective. The most succeptible area remains establishing mecially necessary treatment.  However, though RACs can be more aggressive, there are other auditing entities for which concern is warranted.  The entities include:

    1.  CERT- random post payment audits.

    2.  MASc- Targeted pre and post payment audits.

    3.  ZPIC/PSC-targeted post payment audits.

    4.  OIG- targeted post payment audits.

If you need a quick refresher of the steps that will remove you from harm's way please review the posts on this website.  If I can be of service, please call.


Tom Kane, PT

800-804-6334  ext.210

April 1, 2012 5010 Deadline
1/18/2012 11:11:00 AM

April 1, 2012 5010 Deadline

The 5010 changes are alive and well, and they now impact all HIPAA covered entities and transactions.  This major change can impact reimbursement.  According to CMS, you must be compliant by April 1, 2012 or you will be subject to fines. 

For those subscribers that emp-loy the MediGraph Billing Software, you are protected.  For those sunscribers that do not employ the MediGraph Billing Platform, please be cetain that your billing manager is ready for this change.  



Tom Kane, PT

Updated ABN Form in Effect
1/9/2012 1:55:00 PM
  • As mentioned in a previous post, effective January 1, 2012, all medicare providers must use the revised ABN form for services provided in all out patient settings except for services provided by a home health agency. SNF Part A and home health agencies will continue to use their respective ABN forms. The the old ABN form will not be accepted by  Medicare contractors. For more information and to download a revised copy of the ABN form, click on the link below.




Tom Kane, PT

Pre-payment Reviews on Hold
1/5/2012 7:19:00 PM
On Dec. 28, 2011,  a CMS announcement stated that it was delaying the prepayment review demonstration.  The pre-payment review was a contentious issue and receive a great amount of push back from many sources.   For now, we have dodged  a RAC procedure that would have been, at best, horrible.   Let us hope that future actions do not impair our ability to provie the intervention that our patients deserve.
Tom Kane, PT
Senate Passes Two Month Extension
12/23/2011 3:07:00 PM

The House of Representatives and Senate have passed a bill that provides a two month extension on the scheduled 27.4% reduction in payment for Medicare services.   This bill also extends the therapy cap exception through February 2012. The haouse and senate will  reconvene in January and they will begin work on a compromise bill for a longer term extension on these issues.  I encourage everyone to join the PTeam of the APTA who represents pysical therapist interests in these matters. http://www.apta.org/pteam/


Regards and Happy Holidays,

Tom Kane, PT

MediGraph Software

Goal Statements
12/5/2011 11:12:00 PM

The use of pre-established functional measurements and outcome questionnaires satisfy the objective-evidence based criteria that RACs employ to determine medically necessary.  Another important component of writing a RAC audit proof note is to include ADL functional goals. 

 Goal Statement Examples:

  1. Increase patient’s independent stair ambulation to 12 steps, enabling the patient to access the second floor of his home by increasing lower extremity strength and ambulation training.
  2. Increase functional range of motion of the involved shoulder to enable the patient to independently engage a seat belt while driving.
  3.  Increase the patient’s lower extremity strength to enable the patient to transfer from sitting to standing safely to avoid a reoccurrence of falling during this process. 


  1. Measure diagnosis related impairments:  objectively measure  strength (hand held dynamometer),  ROM (bubble inclinometer), sensory deficits (Moberg, Semmes Weinstein). etc. 
  2. Employ peer reviewed diagnosis related outcome questionnaires (Oswestry, Knee Outcome Survey, Shoulder Disability Scale, etc.) and functional tests (Six Minute Walk, TUG,  Box and Block. Etc.) that have pre-established norms against which the patient’s performance will be measured.
  3. Employ specific goal statements that relate to these impairment measurements, questionnaires, and functional measurements as illustrated above under Goal Statement Examples.
As always, please call to discuss this or any other matter.


Tom Kane, PT

Defining "Medically Necessary' for Physical Therapy
11/30/2011 9:53:00 PM

Defining “Medically Necessary” for Physical Therapy

 We at MediGraph are in a unique position.  As Physical therapy software providers, we are presented with ongoing opportunities to interact with our subscribers and receive feedback when updating our program.  However, another area of important feedback comes from potential subscribers.  We often receive calls from therapists that are looking for documentation software because of a bad experience with a RAC audit.  These therapists experience the hard way what we at MediGraph have been addressing for years; objective standards are required to satisfy the ‘medically necessary’ component of intervention.  It does not matter if your treatment was appropriate.  It does not matter if your skills enabled the patient to overcome a physical impairment.  It does not matter if you increased the patient’s functional ability.  What matters is your ability to prove that what you provide is ‘medically necessary’. 

 As previously stated for our subscribers, RAC audits resemble IRS audits.  Both of these government sponsored hunting expeditions are poorly defined.  When the unstated goal is recapturing revenue, vagueness helps the RAC auditor to establish cause for obtaining a refund of your fees, just as the ambiguity found in the thousands of pages of the IRS code helps the IRS agent to extract their pound of flesh.   

 While there is case law to establish that physical therapists’ judgments are based on their ability to evaluate the patient’s condition (not based on the referring physician), this degree of autonomy does not satisfy the medically necessary standard for CMS or for RACS.  In a recent APTA podcast, the Stanford University Center for Health Policy: Model contractual language for medical necessity was mentioned as the model for determining what is medically necessary.   Five pillars were mentioned as the basis for satisfying the necessity standard: authority, purpose, scope, evidence, and value.  While these five pillars should be the components of sound clinical decisions, it is the last two categories, evidence and value, that the RAC auditors utilize to define medically necessary and are the two areas that require the most attention.

 Evidence that intervention was necessary is easily established, yet the most susceptible area where PTs fall short in their documentation to RACs.   Value, as stated in the Stanford model, is defined as the likelihood of the intervention to “Improve function, minimize loss of function, or decrease risk of injury and disease.”  Evidence and value are easily measured.  Unfortunately, in today’s environment,  if we do not consider proper  documentation that satisfies evidence and value of our treatment  we leave ourselves vulnerable to the RAC auditors’ axe.  The best way to provide evidence and value is with peer reviewed functional tests and impairment measurements that eliminate subjectivity and doubt.  To accomplish this task, MediGraph PT Software includes more than 300 tests and measurements with references.  Are you using these tools? 

 As always, please call if I can assist you with this process.

Be well,

Tom Kane, PT

Stanford University Center for Health Policy: Model contractual language for medical

necessity. Developed at the workshop, Decreasing Variation in Medical Necessity Decision

Making. 1999 Mar 11-13; Sacramento (CA). Available at

RACs to Audit Documentation Prior to Claim Submission
11/22/2011 8:57:00 PM

As of January 1, 2012. Recovery Audit Contractors (RACs) will be abble to examine claims before they are paid.  CMS states that these 'prepayment audits' will be conducted on certain types of claims that historically result in high rates of improper payments.”  Want to know what those claims are?  So do we.  Because these claims have not been  defined, everything is fair game. The program will begin in areas with high populations of fraud- and error-prone providers.  These states include California, Florida, Illinois, Louisiana, Michigan, New York.  The pre-payment reviews will also be conducted in “high claims volume states including Missouri, North Carolina, Ohio,and Pennsylvania.  Pre-payment review threatens PTs because it significantly impacts cash flow.  Sadly, there are no substantive criteria or procedures in place to determine placement on or removal from pre-payment review.  Because RACs  are finically incentivized, and the harsh impacts that pre-payment review can have on providers, we continue to forewarn you of the potential hazards of improper documentation and billing.

As stated many times in this blog, Medicare's goal is to reduce  overpayment, fraud, and abuse.  By CMS' outsourcing to RACs and providing them will the most motivating of incentives (financial gain) the RACs have been successful.  The RAC reimbursement incentive is they receive a percentage of the refund obtained from the medical provider.  As also stated many times in this blog, please employ MediGraph properly to prevent becoming an audit victim.  Documentation of impairments (ROM loss, strength loss, pain, etc.) alone will not satisfy the 'Medically necessary' requirements for CMS and the RACs.  Satisfying medically necessary is where the RACs have been most successful.  You must employ the functional testing components and outcome questionnaires built into MediGraph to overcome the RACs.  For more info, the link to CMS is below.  As always, if I can help, please call.



Tom Kane, PT