Physical Therapy Billing Compliance | How to audit-proof your practice

physical therapy billing compliance audit-proof your practiceThat was definitely NOT money well spent. Shannon felt red-hot anger building up inside her like boiling lava in a volcano right before its eruption. She still had a hard time accepting that Blue Insurance fined her $30,000 for failing the audit and made her refund the payments she had received for all failed claims. She promised herself that she would do whatever it takes to reduce her audit risk from now on.

“Given the volume of claims, an automated monitoring system may be the only practical way to detect suspicious conduct or potential flagging for audit,” Shannon read out loud from the book Medical Billing Networks and Processes. That made perfect sense to her. She had been racking her brain for ways to implement her friend Ariana’s advice of tracking the notorious red flags for insurance companies: unsigned notes, unbilled visits, missed re-exams, and denied claims. An automated monitoring system sounded like a life saver to her.

“Does your physical therapy software help you stay compliant?” Shannon asked Ariana. Ariana was a successful PT who had been through several audits, but always seemed to emerge unscathed.

“Absolutely,” Ariana said. “There are just not enough hours in the day to help my patients and track all potential compliance issues manually.”

“But how exactly does it help you?” Shannon said. “I wonder what kind of system would be the right choice for me since I’m not exactly a tech whiz.”

“Oh, don’t worry,” Ariana responded. “Just find a system that is based on a workflow engine with multiple features. You should be able to build it around your workflow, not the other way around. It’s supposed to make your life easier, not more complicated.”

Shannon pondered that for a moment. Easier would definitely be better. But the most important part was staying compliant. “Could it also cut down my error rate?” Shannon asked.

“Yes, look for physical therapy software that has automated alerts and built-in claims scrubbing,” Ariana said. “That way you can fix any mistakes before you submit a claim to the insurance company.”

“So you are saying that the software alerts you of compliance issues and helps you manage your entire practice workflow,” Shannon said in stunned disbelief.

“It sure does,” Ariana said and smiled. “I use the software to assign tasks to my staff with tickets and complete my notes while I’m still with my patients. This makes my life so much easier and saves me so much time. My favorite thing is the Radar on the homepage, which gives me a quick overview of my practice stats so I know what is going on in all areas at all times.”

How would you advise Shannon?
Is there a way to audit-proof her practice?

Physical Therapy Billing Compliance | Can you reduce your audit risk?

physical therapy billing compliance managmentShannon could have thought of better ways to spend those $30,000 with her husband, Mike, and their two small daughters, Heather and Laurie. Like taking that vacation to Europe as they had always wanted. Or buying a new family car so Mike would not have to drive the old, rusty van anymore.

It seemed like failing that audit last month caused a wound that just would not heal. After paying her fine, she also had to return the money she had already received for her failed claims, pushing her further down the proverbial rabbit hole. Unsure what the future would bring for her physical therapy practice, she held on to the hope that she could emerge from this audit nightmare with a better way to stay compliant. She just did not know yet how to go about it.

“Have you been worried about compliance since you got audited last year?” Shannon asked her friend Ariana, whose physical therapy practice was thriving after last year’s brush with disaster. “I am trying to figure out how I can improve my compliance so that I can avoid another failed audit.”

Ariana smiled and said:”Yes, of course, but I have learned that we really can’t avoid an audit. So I decided to cut down my error rate to reduce my audit risk. PTs can absolutely not afford to have any unsigned notes, unbilled visits, missed re-exams, or denied claims as number one rule. So you have to find a way to track these meticulously.”

“Ok, but it seems impossible to even remember all the different insurance protocols for each patient,” countered Shannon. “It is so confusing to keep track of all the requirements, and just when you think you get it, they change everything again.”

“That’s true,” Ariana admitted. “I also realized that many of those so-called compliance experts give advice that is really difficult to implement, not to mention that they all tell you something different.”

“So how can we get it right then?” Shannon asked. “I can’t gamble with the future of my practice and need a bulletproof process to stay compliant.”

How do you manage your: 
Unsigned notes
Unbilled visits
Missed re-exams
Claim errors

Physical Therapy Billing Compliance | Can you afford to fail an audit?

physical therapy billing compliance audit penaltiesWhen it rains, it pours. Just when Shannon thought it could not get any worse for her physical therapy practice after failing a recent audit, she received another letter from Blue Insurance. This time they wanted her to pay back the money she had already received for the claims that failed the audit in addition to paying a hefty penalty of $30,000.

“Maybe you should contact a compliance expert,” Mike said. “He might be able to help you navigate through this audit-aftermath without losing your practice.”

Shannon was trying to fight back the tears as she responded: “I guess it’s worth a shot.” She was not sure anyone could help her make it through this audit fiasko in one piece, but she had to at least try to save her dream of having her own physical therapy practice.

When she met the physical compliance expert, David, later that week, she did her best to stay composed as he prepared her for the worst case scenario.

“My biggest concern right now is that Blue Insurance will blacklist you,” David explained. “Because once they do, all the other insurance companies will come after you like a pack of wolves, and you will be dealing with even more audits.”

“I have a feeling that is not even the worst that can happen,” said Shannon.

“Unfortunately, it’s not,” David admitted. “You could also lose your license, not to mention the legal fees you would incur if they take you to court. In case you are convicted for fraud, you could also serve time.”

Shannon swallowed hard. She started thinking about her patients. What were the chances of her patients staying loyal throughout these fraud accusations? It’s not like they would understand how difficult the insurance companies made it for PTs to stay compliant. Would anyone believe that she really was not trying to cut corners?

“Is there any way to do damage control so that I don’t lose my patient base?” she asked as her voice quivered with fear. “I realize I probably won’t get any referrals until this is over. But I can’t afford losing my current patients, too.”

David sighed. He felt Shannon’s pain and wanted to reassure her. But he had to avoid giving her false hope. She had to be ready for an uphill battle, no matter how ugly it might get, if she wanted to prevail.

Have you ever been audited or do you know anyone who was audited?
What was the worst part about it?

Leave your comments below!

Physical Therapy Billing Compliance | Can you avoid getting audited?

physical therapy billing compliance_auditShannon just received a penalty letter after failing an audit of her physical therapy documentation a few weeks ago.


She shook her head in disbelief as she kept looking at the letter and said:”Where am I going get this kind of money?” Her husband, Mike, looked up from his morning newspaper and saw the dark circles under Shannon’s eyes as testament to her many sleepless nights this month. He wanted to comfort her, but didn’t even know where to begin. This fine only added to their already serious money problems since he lost his job last year. He could not even offer any helpful business advice in spite of his MBA. He felt helpless and powerless as he watched his wife crumble under this new burden.

It all started three weeks ago when Shannon received a notice from Blue Insurance to review the notes for claims that she was paid in 2012. Apparently some of her patients had received inaccurate information due to sloppy accounting and complained, which raised red flags with the insurance company. Next thing she knew, the auditor was knocking on her practice door to inspect all of her physical therapy documentation.

Mike suddenly had an idea:”Why don’t we meet your friend, Ariana, who had to go through an audit last year? Maybe she can give you some pointers on how to deal with this situation.”

Ariana owned a physical therapy practice in the same neighborhood and was happy to meet them for lunch. “I’m so sorry you have to go through this, too, Shannon,” she said compassionately. “Being audited and fined is no walk in the park, but don’t beat yourself up over it. I have learned that the insurance companies come after all PTs because they simply do not want to pay us. In fact, the fewer providers they have to deal with, the better. So they just try to blacklist as many of us as possible.”

Shannon was shocked and relieved at the same time: “What do you mean? Are you saying that anyone can get audited?”

“Pretty much,” Ariana responded. “For insurance companies the audit penalties are pure revenue and they want to grow it as much as possible. Add to that the notoriously high error rates by PTs and it’s a no-brainer for the insurance companies to go after each and every one of us.”

“So audits are pretty much a fact of life,” Mike said flatly. “I just wonder if there is any way Shannon can reduce her error rate so that we still have money for groceries and the electric bill after the next audit,” he added half-jokingly.

What do you think? Can you avoid getting audited,
or is there at least a way to reduce your error rate as PT?

Leave your comments below!