The Pitfalls of Billing Incident-To Services Provided by Therapists Without Credentials

A recent False Claims Act case highlighted a range of perils.

Scripps Hospital recently paid $1.5 million to resolve a False Claims Act (FCA) case. There are several lessons to be learned from the complaint and settlement.  

First, when an FCA case is first announced or settled, people typically turn to the complaint, which is the first document filed by the relator or whistleblower in court and contains the allegations of wrongdoing. It is easy to assume that when the case settles, the information in the complaint must have been at least a little bit true. That is a bad assumption. 

First, parties to a lawsuit sometimes settle for convenience, even when the allegations are false. But there is a second, less obvious point. If the government identifies another problem through its investigation, a settlement might involve the new problem while the issues identified in the complaint are found to be baseless. The closest you can come to finding out what really prompted a settlement is to find the settlement agreement and look for the paragraph describing the “covered conduct.” The money paid to the government is for the covered conduct, and only those actions will be released from any further claims. While the complaint in this case lists a wide range of topics, the settlement focuses on services provided by uncredentialed therapists.

Medicare allows you to use uncredentialed therapists when the services are provided “incident to” a physician, but apparently this did not occur in this case. There are a number of conditions you must meet to bill “incident to.” Among them, there must be a physician in the office suite able to provide direct supervision; the physician also must perform an initial service to the patient and periodic ongoing services to demonstrate involvement in the course of treatment.

Scripps apparently concluded that one or more of the incident-to requirements was not satisfied, and it had self-disclosed the situation and given a refund to the contractor, but a whistleblower had already filed a lawsuit. The publicly available documents do not make it clear how much of the settlement was a refund of the overpayment and how much of it was penalties. 

Scripps issued a statement indicating that a physician was always on-site, strongly suggesting that the issue was that physical therapists who were not credentialed were seeing new patients without physician involvement. Personally, I am not a big fan of billing physical therapy “incident to.” There is very little upside. The only benefit I see is that under Stark, a group practice may credit physicians in the compensation formula for “incident to” services. 

In my mind, that small benefit isn’t worth the risk. Given that the reimbursement is identical for therapy supervised by physicians or provided directly by therapists, billing under the therapists’ number is generally the way to go. 

A final point: while Medicare allows you to bill for uncredentialed therapists “incident to,” that does not mean that it is always permissible. Don’t forget your state licensure rules and Medicaid and private insurance billing rules. They may also vary from Medicare, and from one another.

Print Friendly, PDF & Email
Facebook
Twitter
LinkedIn

David M. Glaser, Esq.

David M. Glaser is a shareholder in Fredrikson & Byron's Health Law Group. David assists clinics, hospitals, and other health care entities negotiate the maze of healthcare regulations, providing advice about risk management, reimbursement, and business planning issues. He has considerable experience in healthcare regulation and litigation, including compliance, criminal and civil fraud investigations, and reimbursement disputes. David's goal is to explain the government's enforcement position, and to analyze whether this position is supported by the law or represents government overreaching. David is a member of the RACmonitor editorial board and is a popular guest on Monitor Mondays.

Related Stories

Leave a Reply

Please log in to your account to comment on this article.

Featured Webcasts

The Inpatient Admission Order: Master the Who, When, and How

The Inpatient Admission Order: Master the Who, When, and How

During this webcast Dr. Ronald Hirsch delves into the inpatient admission order process including when to get it, when it becomes effective, its impact on billing and payment, who can write it, how to cancel it, the effects on the beneficiary, and more. You’ll leave with a clear understanding of inpatient orders and guidelines for handling improper orders that you can implement immediately.

June 20, 2024
Navigating AI in Healthcare Revenue Cycle: Maximizing Efficiency, Minimizing Risks

Navigating AI in Healthcare Revenue Cycle: Maximizing Efficiency, Minimizing Risks

Michelle Wieczorek explores challenges, strategies, and best practices to AI implementation and ongoing monitoring in the middle revenue cycle through real-world use cases. She addresses critical issues such as the validation of AI algorithms, the importance of human validation in machine learning, and the delineation of responsibilities between buyers and vendors.

May 21, 2024
Leveraging the CERT: A New Coding and Billing Risk Assessment Plan

Leveraging the CERT: A New Coding and Billing Risk Assessment Plan

Frank Cohen shows you how to leverage the Comprehensive Error Rate Testing Program (CERT) to create your own internal coding and billing risk assessment plan, including granular identification of risk areas and prioritizing audit tasks and functions resulting in decreased claim submission errors, reduced risk of audit-related damages, and a smoother, more efficient reimbursement process from Medicare.

April 9, 2024
2024 Observation Services Billing: How to Get It Right

2024 Observation Services Billing: How to Get It Right

Dr. Ronald Hirsch presents an essential “A to Z” review of Observation, including proper use for Medicare, Medicare Advantage, and commercial payers. He addresses the correct use of Observation in medical patients and surgical patients, and how to deal with the billing of unnecessary Observation services, professional fee billing, and more.

March 21, 2024
Comprehensive Inpatient Clinical Documentation Integrity: From Foundations to Advanced Strategies

Comprehensive Inpatient Clinical Documentation Integrity: From Foundations to Advanced Strategies

Optimize your inpatient clinical documentation and gain comprehensive knowledge from foundational practices to advanced technologies, ensuring improved patient care and organizational and financial success. This webcast bundle provides a holistic approach to CDI, empowering you to implement best practices from the ground up and leverage advanced strategies for superior results. Participants will gain actionable insights to improve documentation quality, patient care, compliance, and financial outcomes.

June 26, 2024
Advanced Inpatient Clinical Documentation Integrity: Harnessing Technology, Analytics, and Compliance

Advanced Inpatient Clinical Documentation Integrity: Harnessing Technology, Analytics, and Compliance

Join expert Angela Comfort, MBA, RHIA, CDIP, CCS, CCS-P., as she helps you navigate advanced inpatient CDI technologies, regulatory changes, and system interoperability. Angela will provide actionable strategies for integrating AI and predictive analytics into CDI practices, ensuring seamless system interoperability, and maintaining compliance with evolving regulations. Attendees will learn to select and implement advanced EHR systems and CDI software, leverage data analytics to enhance documentation accuracy, and stay audit-ready with the latest compliance updates. Real-world case studies and practical tools will empower you to drive continuous improvement in CDI, improve patient outcomes, and enhance organizational efficiency. Don’t miss this opportunity to advance your CDI practices and stay ahead in this dynamic field.

July 11, 2024
Foundations of Inpatient Clinical Documentation Integrity: Enhancing Accuracy and Compliance

Foundations of Inpatient Clinical Documentation Integrity: Enhancing Accuracy and Compliance

Join expert Angela Comfort, MBA, RHIA, CDIP, CCS, CCS-P, for an insightful webcast on improving inpatient clinical documentation integrity (CDI). Inaccurate documentation can lead to misdiagnosis, improper treatment, and compromised patient safety. High workloads, lack of standardized practices, and outdated EHR systems contribute to these issues, affecting care quality and financial outcomes. Angela will offer practical strategies and tools to enhance accuracy, consistency, and timeliness in documentation. Attendees will learn to use standardized templates, checklists, and advanced EHR systems, while staying compliant with regulations. Improve patient care, ensure accurate billing, and reduce audit risks with actionable insights from this essential webcast.

June 26, 2024
Mastering E/M Coding: Navigating the Evolving Landscape

Mastering E/M Coding: Navigating the Evolving Landscape

Join industry expert, Kathy Pride, RHIT, CPC, CPMA, CCS-P, for an in-depth exploration of Evaluation and Management (E/M) coding, tailored for healthcare professionals navigating recent guideline changes. Dive into advanced topics beyond mere code selection, including shared visits, criteria for selecting E/M levels, and documentation best practices. Gain clarity on complex guideline terminology and ensure compliance with regulatory standards. This comprehensive session is essential for coders, auditors, educators, and practitioners seeking to enhance their proficiency in E/M coding and maximize revenue capture.

June 19, 2024

Trending News

Happy National Doctor’s Day! Learn how to get a complimentary webcast on ‘Decoding Social Admissions’ as a token of our heartfelt appreciation! Click here to learn more →

Honor Memorial Day with Savings! Get 20% off all items using code MEMORIAL24 at checkout. Shop today and save! Offer valid until May 31. Exclusions apply.

Happy World Health Day! Our exclusive webcast, ‘2024 SDoH Update: Navigating Coding and Screening Assessment,’  is just $99 for a limited time! Use code WorldHealth24 at checkout.