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Physical Therapy Fraud

Physical therapy is the treatment of functional limitations to prevent the onset or to retard the progression of physical impairments following illness or injury.  Medicare pays for physical therapy in at least two contexts:

(1) Through the Part A hospital insurance benefit, Medicare pays for physical therapy as a component of skilled nursing care, in either the acute care setting or in a post-hospital skilled nursing facility.   In order to qualify for reimbursement, such therapy must meet the criteria for skilled nursing care.

Additionally, through Part B supplemental insurance, Medicare reimburses for physical therapy under limited circumstances.  In order to qualify for reimbursement, outpatient physical therapy services must: (1) be reasonable and medically necessary; (2) be furnished to a Medicare beneficiary under the care of a physician; (3) be furnished under a plan of care periodically recertified by a physician; and (4) be furnished by or under the direct supervision of qualified personnel.

Medicare regulations require that physical therapy services be performed either (1) by a State-licensed physical therapist or (2) by or “incident to” the services of a physician or other medical professional licensed to perform such services under State law.  See 42 C.F.R. § 410.60.  Under the “incident to” rule, a physician may bill for physical therapy services performed by non-physician personnel so long as those services are (a) commonly furnished in a physician’s office and integral to a physician’s covered services; (b) included in a treatment plan designed by the physician and in which the physician is actively involved; and (c) furnished under the physician’s direct supervision.

In order to bill directly – rather than through a physician – a physical therapist must be State-licensed.  Physical therapy services performed incident to a physician’s services may be performed by personnel without a license – however, such personnel must otherwise meet all qualifications of a licensed physical therapist including graduation from an approved physical therapy education program.

Regardless of who performs physical therapy services to be billed to Medicare or Medicaid, such services must be furnished in accordance with a sufficient plan of care established by a physician or by the licensed physical therapist who performs the services.  The plan must “prescribe[] the type, amount, frequency, and duration of the physical therapy . . .  to be furnished to the individual, and indicate[] the diagnosis and anticipated goals.”  42 C.F.R. § 410.60.

Fraud in physical therapy is rampant. In 1994, the Office of Inspector General, Department of Health and Human Services published a report finding that 78% of physical therapy billed by physicians did not constitute true physical therapy. In 2006, OIG published another report, stating that a staggering 91% of physician physical therapy bills submitted in the first half of 2002 were deficient in at least one regard. Frohsin & Barger has identified and uncovered the following types of physical therapy fraud:

(a) billing for physical therapy services performed by unqualified personnel;

(b) billing for physical therapy services that were never performed or only partially performed;

(c) billing for physical therapy services when, in fact, the service performed was unskilled, or amounted to maintenance therapy, or both, and did not constitute physical therapy;

(d) billing for physical therapy services performed under a deficient plan of care;

(e) billing under individual therapy codes for group therapy services;

To report Physical Therapy Fraud, contact Frohsin & Barger.

38 Comments
  1. eli morales permalink

    Worked in Homehealth as a Physical Therapist and became aware of company policies that I believed did not comply with Medicare guidelines.

  2. derek dollenger permalink

    i recently broke my ankle and after surgery and a cast i was given a prescription for physical therapy. i found a place near my house in florida and went for a consultation. my prescription was for balance exercises, weight bearing, and mobilization of the ankle and achillies areas. the physical therapist layed me down and took some measurements then left. after, a massage therapist hooked me up to an electro machine and then he left. after a while, a lady came in and showed me how to use the laser machine on myself and then she left. i started to get the feeling this was a scam so i found a new therapist who agrees that it probably is…what can i do? who can help me put that place out of business before the seriously hurt someone?

    • christine permalink

      call the state licensing board. and you insurance company. most insurance will not reimburse for services provided by techs or non licensed individuals. Massage therapists can not bill inder physical therapy or occupational therapy . it is considered fraud and misrepresenting a licensed professional. also contact th American physical therapy association. ask for a copy of the licenses of the individuals who treated you.

  3. Thank you so much for sharing information about Physical Therapy. i found more and relevant information. Wonderful !

  4. Jimmy horn permalink

    I broke my leg skiing and required surgery to put in a plate to repair it. Returned to work 9 weeks later, to a very physical job. (Beverage delivery). No physical therapy. The surgeon asked if I needed PT and I declined. I believe the whole business is just a money making fraud utilizing people’s desire to not return to work.

    • Mari permalink

      You are uneducated

  5. Great post! Thank you for your insight and experience into getting in to a physical therapy
    program.

  6. Helen permalink

    Yes, I think they are all frauds: kinesiologists and physical therapists… 6 years ago I got plantar fasciitis in my feet due to martial arts practice, so my traumatologist gave me 1 month of sessions with the kinesiologist. Results: time and money lost. After 6 years I still have the same pain😦

  7. What was not mentioned on the blog is the reality that if you are a therapist, it is your company that will demand your productivity “Billing Medicare” 450-480 minutes in your day. There is only 480 minutes in 8 hours and if you don’t bill while you are walking to the bathroom, going down the hall to see the patient…you WILL BE FIRED! No break time, no talking to anyone in the hall…just 90-100% productivity every day for almost EVERY therapy job in America. Want to feed yourself and pay your bills??? You do what you are told to keep your job. Only the therapists can stop this by going undercover with the FBI to take down the companies that are treating therapists like mill workers and patients like an assembly line.

    • Well said, NM. — FB

  8. Don Siedenburg permalink

    Should a 90 year old woman with late stage Alzheimer’s, along with various other ailments need the following Medicare Paid Physical Therapy while in the nursing home’s Hospice Care: Self Care or home management training and walking training.

    • Don: It is hard to say without more information, but it is worth scrutiny. Under the Skilled Nursing Benefit, nursing homes are paid by a Prospective Payment System that can result in higher Medicare dollars going to the company if they utilities physical therapy, occupational therapy, speech therapy, etc. at high levels — even for people like the one in your example who may not need it. It is a fairly common way to game the Medicare system and can actually be detrimental to the patient. You should probably seek the counsel of an attorney or a second opinion from a physician or licensed therapist not connected with the nursing home. Hope this answers your question — FB

      • Don Siedenburg permalink

        Thank you for your comments!

  9. Matt permalink

    There is a new kind of fraud in physical therapy we have to start watching out for: physical therapists who repeatedly tell their patients they need more therapy while writing reports to the insurance company/doctor that show maximum physical therapy benefit already reached. Then, when the insurance company cuts off payment, the PT company ‘offers’ to continue the services but at the patient’s expense.

  10. Liz permalink

    I’m wondering if a cardiologist/ internal medicine doctor can bill for physical therapy?

  11. Tricia permalink

    Accomplish Therapy is the leader of Medicare fraud and the OIG should investigate them!

    • If you are aware of Medicare fraud by Accomplish Therapy, then you should consider reporting them to OIG and/or pursuing a whistleblower action against them. To do, so you should contact an attorney. See http://www.frohsinbarger.com for potential representation in a whistleblower action.

  12. Jessica permalink

    I work in the state of California as a massage therapist. There are several massage therapists who take physical therapy prescriptions and treat the client with massage and then give the clients a superbill to send to their insurance. The massage therapist will mark 97140 times 4 units for one hour. On top of the superbill an original copy of the Physical Therapy Perscription from the MD will be included. The client then had to send that to their insurance company for reimbursement.
    Is this legal in the state of Cslifornia?

    • Jessica, if the original physical therapy prescription from the MD did not include therapeutic massage and/or if the therapeutic massage was not reasonably and medically necessary, then it may be fraudulent billing. We would need to know more details, such as the particular insurance billed (e.g. Medicare or Tricare or particular private insurer). CPT Code 97140 is the correct code for “Manual therapy techniques,” including connective tissue massage, but it has to be part of the prescription and most importantly, it mud t be medically necessary. Free massages are not the point of 97140. If you are concerned, you should contact an attorney.

  13. Trish permalink

    OIG is well aware of them. They fired me because I refused to illegally bill. I copied every shred of meeting minutes detailing upcoding and med b patients that didn’t need therapy but we were required to eval because it’s the company’s bread and butter as K Edwards stated. I grabbed it all and dashed

    • You should consider contacting an attorney. We would be happy to evaluate your claim if you would like to contact directly. See http://www.frohsinbarger.com for more information and contact info.

  14. Trish permalink

    I made an anonymous report to OIG with all names other than corporate officers showing. I complied with all HIPPA. I named all Florida Corporate all the way down to rehab mgrs that were witnessed illegally billing. I won’t use my name because I was also threatened they would wreck me. OIG needs to look at all of it

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