Medicare Physical Therapy Billing Regulations for 2016

by | Last updated Mar 1, 2023 | Published on Apr 1, 2016 | Specialty Billing

Physical Therapy
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Using the right physical therapy codes and adhering to the latest physical therapy billing regulations is crucial to maximize reimbursement. Proper documentation is also necessary to justify services provided and to avoid scrutiny later.

The Centers for Medicare and Medicaid (CMS) has made changes to fee schedule payment rates that are effective for physical therapy and other rehab services provided on or after January 1, 2016. The physical therapy billing regulations for 2016 are as follows:

Therapy Caps

Medicare Part B (Medical Insurance) helps patients pay for medically necessary outpatient physical and occupational therapy, and speech-language pathology services. When provided by outpatient providers, there are therapy caps” or “therapy cap limits” on these services.

The therapy cap amounts for 2016 are:

  • $1,960 for physical therapy (PT) and speech-language pathology (SLP) services combined
  • $1,960 for occupational therapy (OT) services

Providers may obtain an exception to the therapy cap until December 31, 2017.

For medically necessary services that go above the outpatient therapy cap limits, the physical therapist must

  • Establish the patient’s need for medically reasonable and necessary services and document this in the medical record
  • Indicate on the Medicare claim for services above the therapy cap limit that the therapy services are medically reasonable and necessary

Payment Rate Increase

CMS has implemented an update factor of 0.5% which is effective for services provided on or after January 1, 2016. The 2016 conversion factor is $35.8043. The actual impact of other changes in the rule on outpatient physical therapy services on individual practices depends on the mix of services provided.

New Medical Review Process

As a result of the Medicare Access and CHIP Reauthorization Act, a new medical review process has replaced the manual medical review process at $3,700. Under this new process, CMS will determine which therapy services to review by considering the following factors:

  • Providers with patterns of aberrant physical therapy billing practices compared with their peers
  • Providers with a high claims denial percentage or who are less compliant with applicable Medicare program requirements
  • Newly enrolled providers

Physician Quality Reporting System (PQRS)

The 2016 PQRS requirements-and penalties-are nearly the same as they were in 2015. PQRS will contain 281 measures. Physical and rehab therapists that participate in the program as individuals must report on nine measures across three NQS domains for at least 50% of their Medicare Part B fee-for-service (FFS) patients. Physical therapists that do not satisfactorily report data on quality measures for the January 1, 2016-December 31, 2016 reporting period will be subject to the 2.0% adjustment in their fee schedule amount in 2018.

Group practices will be able to report quality measures via the Qualified Clinical Data Registry.

Potentially Misvalued Physical Therapy Codes

CMS has also published a list of 103 “potentially misvalued codes,” frequently billed by physical therapists. The list includes the following 10 CPT codes:

  • 97032 attended electrical stimulation
  • 97035 ultrasound
  • 97110 therapeutic exercise
  • 97112 neuromuscular reeducation
  • 97113 aquatic therapy with therapeutic exercise
  • 97116 gait training
  • 97140 manual therapy
  • 97530 therapeutic activities
  • 97535 self care home management training
  • G0283 unattended electrical stimulation (non-wound)

The American Physical Therapy Association (APTA) is working with the American Medical Association (AMA) on a new list of therapy codes based on severity and intensity, rather than time and procedures.  This is scheduled to come into effect during 2017 and 2018. CMS has indicated these codes will remain on the list until they receive relevant information from AMA.

Relying on a professional medical coding company that provides physical therapy billing and coding services will help therapists adhere to all Medicare documentation and billing regulations. This will ensure optimal payment and more time for patient care while avoiding penalties, denied reimbursements for provided services, and audits.

Natalie Tornese

Holding a CPC certification from the American Academy of Professional Coders (AAPC), Natalie is a seasoned professional actively managing medical billing, medical coding, verification, and authorization services at OSI.

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