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

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




RACs and PT New Announcement
11/16/2011 9:51:00 PM
In its 2012 Work Plan, OIG published a new issue examining whether admissions to inpatient rehabilitation facilities are appropriate. “Patients must undergo preadmission screening and evaluation to ensure that they are appropriate candidates for IRF care,”  as stated by the OIG in its Work Plan.  Connolly plans to evaluate documentation in patient records to ensure that patients:
  • Meet  active and ongoing therapeutic intervention standards, one of which has to be physical therapy or occupational therapy;
  • Require intensive rehabilitation therapy
  • At admission to the IRF must reasonably be expected to be actively participating to significantly benefit from the intensive intervention.
  • Require rehabilitation physicians to conduct visits with patients at least three days per week during their stay in the IMF.
  • Need intensive and coordinated interdisciplinary approach to providing rehabilitation.

For those in patient facilities that employ MediGraph, we continue to implore you to nuse the functional loss documentation as previously discussed, including outcome questionnaires and functional measurements that are the result of measured impairments.  Obviously, functional documentation standards apply to outpatient facilities as well.  As always, if there are any questions regarding the best way to use MediGraph to satisfy Medicare and the RACs, please call me.


Tom Kane, PT

800-804-6334  ext. 210
Aetna Follows Medicare
11/16/2011 9:27:00 PM
As mentioned in a previous post and in casual conversation with subscribers, private insurance follow Medicare's lead with audits, fee reduction attempts, documentation demands, billing,basically anything that makes treating patients more difficult.  Aetna insurance has announced and implemented the multiple procedure payment reduction (MPPR) policy to private PT practices. Aetna is following CMS who implemented the MPPR policy change on January 1, 2011. For Aetna,  reimbursement for the first unit/CPT code with the highest expense (PE) value at 100%. All other units of that code and any other codes billed on that day will have their fee reduced by 20%.  The final
impact to providers is expected to be 4-6% dependent on number and combination of CPT codes billed. 
Also as previous mentioned, PT Medicare providers that enrolled in the Medicare program prior to March 25, 2011 is that you  will have to revalidate their enrollment. You should receive a notice between now and March 23, 2015.   PTs must wait to submit the revalidation until asked by your Medicare contractor. For additional information, click here. https://www.cms.gov/MLNMattersArticles/downloads/SE1126.pdf 
Tom Kane, PT
CMS Sets 2012 Fee Cap
11/2/2011 1:44:00 PM

The Centers for Medicare and Medicaid Services (CMS) has released the final fee schedule rule for 2012.   The therapy cap on outpatient services has been set to $1,880 beginning January 1, 2012.   The therapy cap exceptions process expires on December 31, 2011, unless Congress acts to extend it.  The cap does not apply to outpatient hospital departments. Future decisions will determine if the therapy cap extension will continue, and if the proposed 27.4% cut in Medicare payments will go into affect.  http://www.ofr.gov/OFRUpload/OFRData/2011-28597_PI.pdf.


Tom Kane, PT


Money Down the Drain
11/1/2011 11:53:00 AM
If I asked you to take your wallet, remove11% of the cash and flush it down the drain, would you comply with my request?  Why not?  If you are not employing the MediGraph Visit Reminder the end result is the same (probably worse).  Our data collection shows that the average facility that employs the Visit Reminder service has reduced missed appointments by 11%, which can alter your bottom line significantly:
Visits scheduled per week:                  80
Normal cancellation rate:                    15.3%                                                                     
Cancellations afhte Visit Reminder:        4.2%                                                               
Total visits gained per week:                 8.88 visits
Fees per visit                                      $80                                                                       
Revenue gained per week                    $710.40  ($80 x 8.88 visits = $710.40)
Revenue gained per year                      $36,940  ($710.40 x 52 = $36,940)
At $.15 (fifteen cents) per call, the MediGraph Visit Reminder is the most cost effective solution to increase patient vists.  To Find out more, call Dave Naples at ext. 211, or call me at ext. 210. 
Tom Kane, PT
MediGraph Software