Find news and solutions for healthcare payers and providers. Recognize and avoid potential fraud, waste, and abuse scenarios. Real-time clinical claim editing are analyzed to maximize provider reimbursements.

Avoid Overpayment - Review Documentation for Outpatient Therapy Claims

  • by Cindy Gallee, JD, RHIA, CHC
  • Sep 11, 2014, 15:12 PM

Outpatient physical therapy claims present an area that has long been fraught with the potential for billing fraud, waste and abuse. The Office of Inspector General (OIG) has issued several reports in past years concerning outpatient physical therapy claims that were not reasonable, not medically necessary and / or not properly documented. Most recently, the OIG has reviewed several high billers of physical therapy according to Medicare and determined one such high biller had a 99% error rate in a sample the OIG reviewed. Because of a high error rate in these type of claims, payers should regularly review physical therapy claims documentation against their requirements and clinical policies in order to avoid potential overpayment.


 Five categories of errors identified in the OIG report include:
  1. Plan of care requirements not met
  2. Treatment notes requirements not met
  3. Progress reports untimely or not contained in the medical record
  4. Medical necessity requirements not met
  5. Physician certification requirements not met

Under the treatment notes category, timed HCPCS codes were identified as a problem in 75% of the claims reviewed. Physical therapy timed codes are billed for certain procedures in increments of 15 minutes. Each increment of 15 minutes is billed as 1 unit. A code of this type mistakenly billed as 15 units rather than 1 unit represents 225 minutes instead of 15 minutes and would cause the payment to be incorrect. Examples of this type of timed physical therapy code are the following:

  • 97032  Application of a modality to 1 or more areas; electrical stimulation (manual), each 15 minutes
  • 97033  Application of a modality to 1 or more areas; iontophoresis, each 15 minutes
  • 97035  Application of a modality to 1 or more areas; ultrasound, each 15 minutes
  • 97110  Therapeutic procedure, 1 or more areas, each 15 minutes; therapeutic exercises to develop strength and endurance, range of motion, and flexibility
  • 97112  Therapeutic procedure, 1 or more areas, each 15 minutes; neuromuscular re-education of movement, balance, coordination, kinesthetic sense, posture, and/or proprioception for sitting and/or standing activities
  • 97113  Therapeutic procedure, 1 or more areas, each 15 minutes; aquatic therapy with therapeutic exercises
  • 97116  Therapeutic procedure, 1 or more areas, each 15 minutes; gait training (includes stair climbing)
  • 97124  Therapeutic procedure, 1 or more areas, each 15 minutes; massage, including effleurage, petrissage, and/or tapotement (stroking, compression, percussion)
  • 97140  Manual therapy techniques (e.g., mobilization/manipulation, manual lymphatic drainage, manual traction), 1 or more regions, each 15 minutes
  • 97530  Therapeutic activities, direct (one-on-one) patient contact (use of dynamic activities to improve functional performance), each 15 minutes
  • 97535  Self-care/home management training (e.g., activities of daily living [ADL] and compensatory training, meal preparation, safety procedures, and instructions in use of assistive technology devices/adaptive equipment), direct one-on-one contact, each 15 minutes
  • 97750  Physical performance test or measurement (e.g., musculoskeletal, functional capacity), with written report, each 15 minutes

A payer can review these codes throughout all submitted claims and determine variances in billing, such as a provider billing a high number of units for these codes that may actually represent minutes. Once variances are found, clinical correlation with the medical record would determine the validity of the claim.

Safeguard your plan assets with Context’s FirstPass™ claim editing solution. Our solution identifies non-compliant professional and facility claims through a robust editing engine containing millions of rule combinations. FirstPass™ is a key component of a payer’s cost containment and financial auditing process.

FirstPass™ FWA module supports identification of FWA situations before you pay the claim. This saves you and your customer time and money, eliminating or greatly reducing the expense of the traditional “Pay-and-Chase” model that’s so prevalent today.

FirstPass™ is pre-integrated with a number of commercial claim systems and can be easily and seamlessly integrated into your existing adjudication software.

Subscribe to Our Blog:

Connect With Us


Proudly Affiliated with:

Proud_Members_Logo_250X100Affiliate with FedRAMP and AWSNational Association of Dental Plans Member