Physical Therapy Billing Examples: 5 Little Mistakes That Cost A Physical Therapy Practice $634,837

5 Common Processing Mistakes You Can Check Right Now…


In August 2014, the Office of Inspector General (OIG) released a report of the audit that had been conducted on an Illinois physical therapist. Their review sampled 100 random claims out of the 4,298 Medicare outpatient physical therapy services, totaling $645,966, that had been provided between January 1 and December 31, 2011.

The audit found that 99 of the 100 claims in their random sample contained more than one deficiency. Therefore the government extrapolated the failure rate from the sample and applied it to the entire paid claim population.  They are now seeking a refund of $634,837. In other words, the government does not seek a refund for the 100 claims survey but rather for all the claims submitted assuming that they have the same error rate.

Moreover, these sample claims were subjected to a very high level of scrutiny.  The report details the deficiencies as follows:

  • 97 claims did not meet Medicare’s plan of care requirements (Goals not measurable, invalid or missing Therapist’s Signature, and incomplete or no Plan of Care)
  • 95 claims did not meet Medicare’s treatment note requirements (Missing specific Skilled Intervention, unsupported number of Units Billed, Invalid Therapist’s Signature, and Billed Code not in Plan of Care)
  • 49 claims had progress reports that were untimely or not contained in the medical record (Progress Reports not made at least once every 10 Treatments, and No Progress Reports)
  • 44 claims had therapy services that were not medically necessary (Goals in Plans of Care were unmeasurable, Invalid or Missing Certification of Plan of Care, Did not meet Medicare’s Physician Certification requirements, Documentation failed to support Medical Necessity, and PT was repetitive/no evidence that Skilled Therapy Services were needed)
  • 39 claims did not meet the Medicare physician certification standard (Plan of Care not signed by Physician, Physician Certification not dated, and Untimely Physician Certification)

To review the full OIG report go to

To improve your chances of surviving an OIG audit, make sure to clearly establish medical necessity, prove that skilled therapy services are performed, and that those services are both reasonable and necessary. Studying physical therapy billing examples, expert guidance, and periodic self-audits in tandem with an automated professionally built and ONC-certified documentation system will help you achieve this goal effectively and efficiently.