Avoiding Red Flags: Finding the Right Productivity Balance

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Author: Guest Author

The following is a guest article by John Wallace, PT, OCS, Senior Vice President of RCM at WebPT.

When it comes to the number of patients providers can see in a day, some might think that more is more. After all, more patients should generate more billable services—and thus, more payments. But as organizations balance productivity goals with payer policies, sometimes their version of “enough” patient volume is actually too much.

The number of Medicare TPEs and commercial payer take-back audits alone is skyrocketing. Providers who have timed codes for billing may be putting themselves at risk if they do not optimize their treatment schedules. Payers have vastly improved data intelligence on therapists and practices, and OIG even has a dedicated section on issues in outpatient rehab. It’s important to know what types of audits exist, what to be aware of, and how productivity goals can affect clinics and culture.  

Understand the Different Types of Audits

Not all audits are created equally. Since forewarned is forearmed, it’s best to have a general understanding of what types of audits might apply to your clinic.

Medicare’s Targeted Probe and Educate audits use data analysis to identify clinics who have high claim error rates or unusual billing practices. They also look to flag “items and services that have high national error rates and are a financial risk to Medicare.” If clinics aren’t found to be compliant, they are selected for TPE participation to increase the accuracy of their claims. If, after three rounds of education sessions, there isn’t enough improvement, they are referred to CMS for next steps. 

Meanwhile, Medicare also has a Fee for Service Recovery Audit Program. According to their site, their mission is to “identify and correct Medicare improper payments through the efficient detection and collection of overpayments made on claims of health care services provided to Medicare beneficiaries, and the identification of underpayments to providers so that the CMS can implement actions that will prevent future improper payments in all 50 states.”

Finally, payers of all stripes may send documentation requests. For example, medical record reviews can be initiated by an auditor, which typically state the reason for the audit, what will be reviewed, the relevant timeframes, and what available appeal options. An Advanced Document Request (ADR) is then followed by a list of beneficiaries and dates of service to be reviewed. Auditors may also perform technical audit reviews, medical necessity compliance reviews, and medical policy reviews.

What Triggers Audits? 

There are only so many hours in the day. So the fastest way to trigger an audit is billing more hours than what is available for timed-codes. Let’s take an eight-hour day as a physical therapist as an example. If you saw 100% Medicare patients, you could bill 32 units (480/15). If you saw CPT patients exclusively, you could bill 60 units (480 min/8). In reality, of course, most practices have a mix of financial classes: Medicare, commercial, casualty, Workers’ Compensation, and possibly other unique local payer contracts. A good rule of thumb: if you average more than four times units or five total units per visit for a payer, you can probably expect a review. 

Another surefire way to trigger an audit is the improper use of assistants. Again, there are varying rules across medicare, private payers, and company rules that determine if assistants can provide one-on-one care. Licensed assistants in all 50 states can see patients—with varying degrees of supervision determined by state. Keep in mind that payers can require higher levels of performance than the law (e.g., Tricare and Medicare). It’s therefore crucial to stay abreast of the rules that apply to your practice. 

What are the Consequences of Audits?

What if an auditor finds overbilling in your clinic? In a best-case scenario, they can deny payment or ask to be repaid for the visits they found were overbilled during the audit. The payer could also take a valid statistical sample and ask for a percentage repayment on all visits within the last three years. The payer could also recoup the overpayments from future visits. 

If overbilling happens with a commercial biller, the clinic could get a letter sent to the licensing board and be put on probation. In an absolute worst-case scenario, overbilling can end in criminal prosecution if it involves Medicare, Tricare, or the Department of Labor, and the amount is over a million dollars and a settlement cannot be reached. Thankfully, this is a very rare outcome. 

Finding the Right Balance

Despite the real risk involved tied to potential overbilling, nearly 35% of rehab therapy organizations saw an increase in patient volume over the past year as compared to years past. “While patient visits per therapist per day does have a ceiling,” John Brickley, Vice President, Ambulatory Operations and Network Development at MedStar Health Physical Therapy, commented in the 2022 State of Rehab Therapy Report, “Unfortunately, payer restrictions, limits to reimbursement and other factors limiting net revenue per visit does not seem to have a limited basement. Relying on ever-escalating per-therapist patient volume per day will negatively impact patient satisfaction, therapist satisfaction, and outcomes.”

Juggling patient volume, productivity goals, and profit can be very challenging—especially as high patient volumes and intense productivity goals can contribute to burnout. The average number of patients seen per therapist/per day is 12.9. This number rises to 17 patients in organizations with more than 50 providers. According to WebPT’s 2022 State of Rehab Therapy report, “Educational institutions and inpatient hospitals top the patient volume charts, with each of its providers seeing approximately 20 patients per day.” 

Start by creating a culture with realistic productivity goals. A practice that establishes a universal productivity goal invariably fails to account for the individual differences between clinicians, which can lead to frustration and misinterpretation. By contrast, variable compensation models allow a provider to set his or her own productivity goal and to be paid according to their relative contribution to the company. Doing so helps company culture and safeguards from overbilling.

With declining reimbursements, providers are doing everything they can to make up the difference. But therapists must be mindful as they navigate the productivity versus payment-per-visit dilemma. The goal? Optimize billing while navigating payer rules and maximizing payments. Stay audit-ready with good documentation and a watchful eye on units of treatment bill in a day. 

About John Wallace

John Wallace, PT, MS, has more than 35 years of experience in private practice orthopedics as well as acute hospital, acute rehab, home health care, skilled nursing, sub-acute care, and sports medicine. He currently serves as the Senior Vice President, Revenue Cycle Management at WebPT. He has been invited to speak at numerous national healthcare events on the topics of payment policy, compliance, practice management, and rehabilitation economics.

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