As a PT, you might not rank proper billing practices very high on your “what I love most about my profession” list. However, whether you like it or not, accurate and honest billing practices are crucial to the health of your practice. Even if you have the best intentions, it’s easy to fall into the habit of committing common billing bad behaviors. Furthermore, once you’ve locked yourself into a bad billing routine, it can be that much harder to break the habits that got you there. This is especially true if your sins are paying off—literally. But chances are, these habits are more deadly than you believe them to be. And that means you need to change your ways—and soon—if you want to save your clinic from an untimely demise. Here are seven common PT billing sins—and how to correct them:
There are several scenarios that can lead to overbilling. Here are some examples:
- Upcoding and charging for services that you didn’t provide.
- Booking unnecessary appointments for the sake of increasing revenue.
- Overcharging—which is similar to upcoding—by tacking on additional and unnecessary codes or billing for treatments that weren’t performed.
The fix for overbilling isn’t complex: Bill for the services you provide—period. Furthermore, the services you provide should be medically necessary and follow your patients’ treatment plans.
2. Dropping the Ball on Contracts
If you aren’t well-versed in the details of your third-party payer contracts, then your ignorance could lead to some serious consequences. Usually, these consequences come in the form of claim denials. But if you understand your contracts, then you have the power to uncover—and dispute—any wrongly denied claims. So, when you review your contracts, closely review the following details:
- Filing schedule
- Terms of reimbursement
- Treatment authorization process
- Length of claim submission and denied claim appeal periods
- Interest accrual for late payments
- Requirements for adding new services or providers to the plan
- Amount of advance notice required for proposing changes to the contract
- Cancellation requirements and associated penalties
If, after reviewing your contracts, you find some details you’d like to change, it might be time to renegotiate. Contract negotiations aren’t something to be taken lightly, though. Need a few tips on how to get started? Check out part one and part two of our contract negotiation blog series.
3. Offering Patient Favors
“Who loves a good lawsuit?” Although Judge Judy might make for some great daytime TV, if you’re giving away your PT services, you really don’t want to find out how your clinic holds up in a court of law. In addition to the legal ramifications of waiving fees and copays, you could face further penalties and even business closure. This is one sin that, in my mind, is simply inexcusable—and completely avoidable. Here’s how to put the kibosh on granting patient favors:
- Create a copay collection policy—and follow it.
- Get your staff up to speed on the policy, and ensure they have everything they need to adhere to it.
- Monitor staff compliance, and provide coaching when necessary.
- If you offer discounts, offer them fairly.
- Build a pro bono amount into your clinic’s budget, and monitor its use.
If you’ve made a habit of waiving copays, you risk HIPAA violations and fraud accusation from commercial payers. Furthermore, Medicaid and Medicare generally prohibit providers from waiving copays, because this practice misappraises the value of your services. The bottom line is that you’re running a business; get paid what you’re worth.
If your claim denial rate is above 4%, timing problems, manual errors, and input oversights could be to blame. Because a smooth billing process depends heavily on clean documentation, billers aren’t the only staff members to blame for dirty claims. Here are some ways to clean up your act:
- Always use the most accurate modifiers (when applicable).
- Make sure your claims aren’t missing any key information, like prior authorization and place of service.
- Check for any typos during the data entry process.
- Use the most accurate and up-to-date CPT and diagnosis codes. This will be especially important as we transition to ICD-10 and specificity becomes the name of the game.
- Conduct an internal billing audit.
You can avoid most manual claim errors with a little time and effort. Take a look at your processes, evaluate your billing software, and communicate openly with your staff when problems do occur. When you run into mistakes and claim denials, review the reason, and don’t be afraid to appeal the denial if it was due to a mistake.
5. Mismanaging Overpayments
If a patient or an insurance company has overpaid you for your services, you shouldn’t brush it under the rug—or into your bank account. Overpayments are serious business, and you’re responsible for promptly repaying them. And what happens if you don’t? You leave yourself vulnerable to fines, lawsuits, or even jail time. Here’s what to do if you find that you’ve been overpaid:
- Contact the patient immediately upon discovering the overpayment. Then, discuss repayment options. You could apply an account credit for future treatments, but only if the patient gives his or her consent. If he or she wishes to receive a refund, you must provide one without delay. When you mail a refund check to the patient, be sure to include a written explanation as to why you’re returning the funds.
- When it comes to insurance overpayment, don’t wait for the payers to come to you. Contact the insurance company to confirm overpayment. Once you’ve gotten confirmation, request that the payer reprocess the claim with the correct payment. Finally, ask the insurance company to send you a formal request. Don’t send any payments until you receive that formal notice.
If the patient—or the payer—doesn’t appear to be the source of overpayment, then you’ll have to do some further investigative work. Find the source of the funds and make sure you repay them. Remember, there’s no such thing as “free money.”
6. Misunderstanding Modifier 59
Modifiers are complicated, and it can be tough to pick the right one in any given billing scenario. This is especially true when it comes to modifier 59. There seems to be a lot of bundled code confusion in our industry—and that leads to a lot of claim denials, rejections, and inaccurate reimbursements. This is why WebPT created an easy-to-use flow chart to help you decide whether you should—or should not—append modifier 59. You can download the chart here. As you review your modifier-application process, consider these examples of situations when you shouldn’t use modifier 59:
- When the main reason you’re using it is to guarantee payment.
- When you’re billing re-evaluation codes.
- When another modifier is more appropriate.
All of that being said, you shouldn’t be afraid to use modifier 59 when necessary. Just apply it with caution.
7. Shoving the 8-Minute Rule Where it Doesn’t Belong
It might be tempting to apply Medicare regulations to all of your patients. You might even think of this practice as a fail-proof safety net. However, the “better safe than sorry” rule doesn’t apply here. You should bill in accordance with each payer’s guidelines. This approach holds especially true when it comes to the 8-minute rule. If a payer doesn’t follow Medicare guidelines, then you shouldn’t automatically bill according to the 8-minute rule. If you do apply it unnecessarily, you risk throwing away potential income. To bill properly, you need to understand the difference between these two types of codes:
- Service-based codes: These codes are often called untimed codes, and they’re typically used in situations where you can only bill for one code—whether the treatment lasted 15 minutes or 45 minutes. Some examples include performing an initial (or re-) evaluation, applying hot or cold packs, or even electrical-stimulation (unattended).
- Time-based codes: These indicate one-on-one treatment. Each code represents a 15-minute increment when the therapist performed modalities. Some examples of timed code modalities include therapeutic exercise, manual therapy, neuromuscular re-education, therapeutic activities, gait training, and ultrasound.
Knowing the ins and outs of the 8-minute rule can be tricky, but an EMR can help you manage the complexities. For example, if you use WebPT, you simply enter the time spent on each modality, and the number of units you wish to bill for those modalities. Then, WebPT does the calculation and will let you know—according to the 8-minute rule—whether you’re on track. If you aren’t, you’ll get a nifty notification to let you know if you are under—or over—billing. This way, you can be sure you’re accurately billing—sans the math-induced headache.
Regardless of whether your billing sins are intentional, it’s crucial that you find your way back to the right path. With some attention to detail—and implementation of better processes—you can avoid these seven deadly billing sins.
About the Author
Heidi Jannenga, PT, MPT, ATC/L, Founder and COO of WebPT
As Chief Operating Officer, Heidi leads the product strategy and oversees the WebPT brand vision. She co-founded WebPT after recognizing the need for a more sophisticated industry-specific EMR platform and has guided the company through exponential growth, while garnering national recognition. Heidi brings with her more than 15 years of experience as a physical therapist and multi-clinic site director as well as a passion for healthcare innovation, entrepreneurship, and leadership.
An active member of the sports and private practice sections of the APTA, Heidi advocates for independent small businesses, speaks as a subject matter expert at industry conferences and events, and participates in local and national technology, entrepreneurship, and women-in-leadership seminars. Heidi is a mentor to physical therapy students and local entrepreneurs and leverages her platform to promote the importance of diversity, company culture, and overall business acumen for private practice physical therapy clinics.
Heidi was a collegiate basketball player at the University of California, Davis, and remains a life-long fan of the Aggies. She graduated with a BS in Biological Sciences and Exercise Physiology, went on to earn her MPT at the Institute of Physical Therapy in St. Augustine, Florida, and recently obtained her DPT through EIM. When she’s not enjoying time with her daughter Ava, Heidi is perfecting her Spanish, practicing yoga, or hiking one of her favorite Phoenix trails.