CLIFTNOTES©                               

PHYSICAL THERAPY FRAUD: Part 2 in the “F” Word Series. This installment of the fraud series will focus on physical therapy fraud, abuse and waste provided in skilled nursing facilities. Future installments will address, home health care, workers’ compensation, automobile liability, group health and outpatient. 

• “No physical therapist should be placed into a situation by an employer to provide excessive or unwarranted services to Medicare beneficiaries or any other patient. Physical therapists are licensed professionals and those practicing inappropriately should be reported to their state licensure boards.” 

• Scott Ward, PT, PhD, APTA President

This quotation connotes a shared risk and responsibility between the physical therapist/PT and their employer for instances involving fraud and abuse. For me, this dilutes the real message that the PT ultimately assumes responsibility and accountability for abusive practice. At the end of the day, it is the PT’s license which is at-risk. Ward speaks to this in his quote. However, just reporting a PT to the licensing agency is not enough.  Some state licensure boards are aggressive while others are not. All must protect the publics’ health and trust. In California, the board considers fraud to be an urgent complaint which may possibly be referred on to the Office of Attorney General’s Office for further investigative and a formal charge.

Perhaps, the most common complaint by therapists who work in SNFs is that the administrator and/or rehab director places excessive pressure on them to rack up minutes of billing. I have seen some instances in which, treatment minutes exceed 480 minutes which constitutes an 8hr shift yet, the therapist’s time clock is punched out after an 8 hour shift or less.  It is quite common to see “productivity quotas” anywhere from 85% to 100%  in SNFs.

This essentially means the therapist never went to the bathroom, took a break, walked between patients/down hallways to patient rooms, completed clinical documentation or ate a meal.  These quotas are published in job vacancy notices or stated by healthcare recruiters and, should be considered a “red flag” for review. As long as PTs continue to work under these conditions and many do, unscrupulous SNF administrators will continue to press them into servitude.

Ultimately, therapists must make some difficult decisions; 1) stop taking these positions (I get 10-15 calls or emails /wk. from healthcare recruiters trying to fill SNF slots), 2) become a whistleblower under Qui Tam/False Claims Act, 3) go undercover for the FBI, Office of Inspector General, Dept. of Justice or 4) “sell out” and collaborate in what may very likely comprise fraud.  Lose your license, get a strike against your National Provider ID/NPI, go to jail, pay restitution and do further damage to patients, American taxpayers and the PT profession.    

Physical therapists/PTs choose where they work, subscribe to the policies & procedures of their chosen facility and if they disagree with them, they are free to leave. PT is perennially listed by the federal Department of Labor as one of the fastest growing professions and jobs are plentiful. Even in times of job scarcity, this is no excuse for fraudulent practice and billings, which are both unethical and in many cases, illegal. When PT’s blame the skilled nursing facility for pressuring them to bill for greater time (minutes), upcoding to achieve higher reimbursement (RUGs) or to bill as individual vs. group billing; the responsibility rests with the therapist.

Projection of culpability to others is inexcusable and as specious as faulting a referring physician for over-utilization of physical therapy services, which I should note is the number one excuse that I have heard from providers reviewed over my thirty-six year career in PT peer review; “the doctor keeps referring the patient." Readers should note that physical therapists strive to preserve autonomous practice and in every state enjoy some degree of “direct access” wherein, a patient can be evaluated without a so-called “prescription” or referral from a physician.

When therapists concurrently proclaim professional autonomy and then fault referring physicians when things go wrong they act unprofessionally because “you can’t have it both ways”. No one holds a gun to the therapists’ head. However, under Medicare a physical therapist must follow a certified plan of care signed by a physician. Although, on a personal level I disagree with this policy because I strongly believe that therapists are educated and trained for autonomous practice, it is the federal law. 

COMMON EXAMPLES OF FRAUD & ABUSE:

Medicare Part A insurance benefit reimburses for physical therapy that is a component of skilled nursing care/SNF. These services are provided in the acute care setting or in a post-hospital SNF.  

Medicare Part B or supplemental insurance reimburses for PT under defined circumstances in order to receive reimbursement:

1. Be provided to a patient under a physician’s care

2. Care must be recertified by the physician

3. Meet medical necessity and reasonable criteria

4. Be provided under the direct supervision of qualified personnel

WWW.STOPMEDICAREFRAUD.GOV

Resource Utilization Groups or RUGs:

“The Perfect Storm”

There are 66 RUGs with physical and occupational therapy involved in one-third of them. SNF’s attempt to admit patients/residents who have complex needs requiring therapy. Physical therapy utilization rates and billings are critical to SNF profitability. For years PT has been considered a cash cow. Many SNF owners do not like to directly employ rehabilitation providers substantially due to the fact that they assume greater risk for aberrant billing. By independently contracting with rehab providers, SNF’s transfer a great deal of risk to the contractor. Contracting organizations subcontract physical therapy to individuals similarly in order to transfer risk to the actual treating therapist, whose license is ultimately at risk in situations of Medicare fraud and abuse. The PT can be excluded from future Medicare inclusion, lose their license, pay restitution and face incarceration.  Physical therapists when compared to many professions are younger and with less business acumen. Of course, there are many excellent business-minded therapists however, PT curriculum is so rigorous because it must cover all body systems, has a high degree of hands-on or didactic training that, in general, lightly covers issues such as contract law, 1099 vs W-2 status etc. Training and education in this regard is dramatically improving.  However, ignorance is never an excuse under the law.

SNF administrators routinely pressure therapists to maximize treatment minutes (720 mins. in an assessment period) so that the facility can bill for “ultra- high” RUG category. The current system in my view is equally flawed to the traditional fee-for-service system where providers are paid to do more not less. For the record, 68% of all cases of Medicare fraud are for fraudulent billing with complicity for providers at sixty-two percent.

10 Common Acts of Fraud-Abuse-Waste in SNFs:

The following examples do not represent hypothetical scenarios of Medicare fraud but actual situations that have led to the successful prosecution in a multitude of cases nationwide. Actual cases related to each numbered item are available by request.

[1] Billing for physical therapy performed by unqualified personnel.

a) “Incident-to” physical therapy services. Failing to have a license physician on-site at all times when billing for physical therapist services. Physicians can bill for physical therapy if they are on-site and use therapists not, unskilled, unqualified staff. Physicians cannot supervise physical therapist assistants only, physical therapists can.

b) Billing for physical therapist services performed by a non-therapist, untrained, unlicensed staff even though a licensed physician is on-site. I have personally seen clerical staff and van drivers who performed services entitled “physical therapy”.

 [2] Physical therapist inappropriately allowed his/her provider identification number to be used to bill for services provided by someone not, under their supervision.

[3] “Phantom Billings” for services never provided, false, fraudulent, and fictitious.

[4] Physician kick-backs for referrals.

[5] Individual vs Group Billings, billing under individual codes when therapy is done in a group of 2 or more.

[6] Miscoding of physical therapist services.

[7] Physical therapist services provided without an approved/certified physician’s plan of treatment.

[8] Billing for “maintenance” not restorative services.

[9] Forging of physical therapists signatures and use of professional licensure numbers when billing in the absence of the therapist on-site.

[10] SNF administration upcoding of patient minutes to achieve “Ultra High” RUG level (720 minutes of therapy during an assessment period) after the therapist has submitted their billing. This occurs during “window periods” and involves “ramping” up of minutes to generate a higher level of reimbursement.  A patient receiving “ultra-high” minutes must have a severe condition but not too severe that they cannot tolerate therapy. These patients are very rare yet, an increasingly, many SNFs are billing for these extraordinary amounts in order to optimize reimbursement.

SAMPLE HEADLINERS:

Kentucky: “Nation’s Largest Nursing Home Therapy Provider,  Kindred/RehabCare to Pay.25 Million to Resolve False Claims Act Allegations”, U.S. Dept. of Justice, 1/12/2016.  

Michigan: “Novi Physical Therapist Summarily Suspended”, (Dept. of Licensing & Regulatory affairs, 12/18/13), 22 mos. Imprisonment, $2,375,000.00 in restitution for billing PT & OT to Medicare not performed. 

New Jersey: “Owner of Physical Therapy Clinics in Ewing and Cherry Hill Pleads Guilty to Multi-Million Dollar Medicare Fraud” (DOJ, 5.5.2007), billed $6.7 mil., received $3.79 mil. for physical therapy services allegedly provided to patients, unqualified staff, ”incident to” violations, failing to have licensed physical therapists perform the physical therapy on the patients.

Alabama: “HEALTHSOUTH to Pay United States $325 Million to Resolve Medicare Fraud Allegations,” (DOJ, accessed 4/16/2008. 

Texas: “Physical Therapy Clinic Operator Sentenced To Prison in Fraud Case”, (DOJ, 9/12/2006) “incident to” violations, no licensed physicians treated patients, unlicensed/unqualified staff, $4 mil billed/$1.2 mil. collected by operator. 

Florida: “In Florida, two chiropractors were sentenced to six months home detention, ordered to pay a $10,000 fine and pay $400,000 in restitution”, (HHS, 2/2005).

Billed chiropractic services as physical therapy.

Notes:

• Conviction of Medicare fraud involves 10 yrs. in prison and $250,000 fine for EACH guilty count. The 3-yr statute of limitations on overpayment recovery does not apply to cases involving false pretenses or fraud.

• Each violation of the False Claims Act/FCA involves a $10,000 fine plus treble damages even if the ill-gotten amount is as low as $5 dollars.  

• As in previous installments of this series, not all physical therapy is provided and billed by physical therapists. Non-therapists are responsible for a significant percentage/amount of “fraud, abuse, waste” labeled as ‘physical therapy’.  It is critical to ascertain the professional credentials of any/all persons who provide/bill for services entitled “physical therapy” before stereotyping an entire profession. 

Sources:

American Physical Therapy Association, “APTA Reaffirms Commitment to Eliminating Fraud and Abuse”, Oct. 7, 2011

Federation of State Boards of Physical Therapy, Federation Forum: Fraud and Abuse: Part 1, Winter, article derived from a presentation by Gayle Lee, J.D., Senior Director of Health Finance and Quality for the American Physical Therapy Association, 2013

Rooks Franklin J., Jacobson Jared A., Blowing the Whistle on Fraud, in Advance Healthcare Network for Physical Therapy & Rehab Medicine, Nov 30, 2015, accessed: 5/19/2016