Even if you’re not currently under a RAC Audit, you might be wondering just how to stay out of trouble or not be “flagged” for an audit. As much as you might have heard about the random nature of an audit, experience tells us that this is not usually the case. In this article, we will discuss some of the more obvious red flags in a RAC audit for Physical Therapy Clinics (PTC).
One thing to keep in mind is: who is going to pay the bill? It is the government. That is why erring on the side of caution is the way to go. However, that does not mean you should work and not get paid. The red flags outlined below are cautionary areas and service methods that tend to cause overbilling.
1. Billing for Excessive Durations
Is there an end in sight? Billing for excessive durations is common when the PTC uses an approach that mirrors chiropractic care that calls for “keep on coming until it goes away.” However, this does not work for PTCs.
A proper program/protocol for care will never be so open-ended that the care program does not change and/or the patient never gets better. If that is the case, there needs to be a reevaluation and/or a new plan that needs to be implemented.
2. Reevaluations
The reevaluation or re-examination code 97164 is completely different than a progress note and should not be billed for a progress note. You should only ever bill for a reevaluation if one of the following situations apply:
- The PTC’s assessment indicates significant and unanticipated improvement, decline, or change in the patient’s condition or functional status.
- The clinical findings come to light.
- The patient fails to respond to the treatment outlined in the current care plan.
3. Copay Collection
You must collect copays. It is illegal not to do so, unless:
- The PTC applies the same criteria to all cases
- It is a last resort due to failure to pay
4. Double Dipping
This occurs when two different PTs are billing the same patient at the same time.
You cannot bill separately for the same or different service provided to the same patient at the same time.
The PT must limit billing time to the exact length of the session.
5. Frequent Use of the KX Modifier
Excessive use of the KX modifier may trigger a red flag. Use it only when clinically justified and well-documented.
6. Billing Under One PT Provider Number
Avoid billing under one PT provider number rather than each separately enrolled PT’s provider number. Each therapist must bill under their own enrolled number.
7. Excessive Number of Billing Codes Per Session
Submitting an excessive number of billing codes per session is another common trigger. Always ensure that the codes reflect actual services provided and are properly documented.
Frequently Asked Questions
What are the most common red flags in a RAC audit for Physical Therapy Clinics?
The most frequent red flags include excessive treatment durations, improper use of reevaluation codes, failure to collect copays, double billing (double dipping), overuse of the KX modifier, billing under a single PT’s number, and using too many billing codes per session.
Can I bill for a reevaluation during a routine progress update?
No. A reevaluation (CPT code 97164) is only billable under specific conditions such as a significant change in the patient’s condition, new clinical findings, or when the patient isn’t responding to the current care plan. Routine progress updates do not qualify.
Is it ever acceptable not to collect a patient’s copay?
It is only acceptable to waive a copay if the Physical Therapy Clinic applies the same standard to all patients and only as a last resort due to the patient’s failure to pay. Otherwise, it is illegal to skip copay collection.
How does double dipping occur in a PT billing scenario?
Double dipping happens when two PTs bill for treating the same patient during the same timeframe. This is not allowed, even if they provide different services, because only one session can be billed for the actual treatment time.
Why is frequent use of the KX modifier a concern?
Overusing the KX modifier may indicate abuse of billing privileges. It should be applied only when treatment exceeds therapy thresholds and must be supported with clear, clinical justification and proper documentation.