SOURCE: American Physical Therapy Association

May 05, 2006 12:44 ET

Statement Regarding the Office of Inspector General (OIG) of Department of Health and Human Services (HHS) by American Physical Therapy Association (APTA) President Ben F Massey Jr, PT, MA

Report Found That 91 Percent of Physical Therapy Billed by Physicians in the First 6 Months of 2002 Failed to Meet Program Requirements, Resulting in Improper Medicare Payments of $136 Million

ALEXANDRIA, VA -- (MARKET WIRE) -- May 5, 2006 --


The findings in the OIG report (OEI-09-02-00200) released this week are alarming, but hardly surprising. The American Physical Therapy Association (APTA) has been warning Congress, the Centers for Medicare and Medicaid Services (CMS), and the Inspector General for more than a decade that the billing of physical therapy services in physician offices is a major problem for the Medicare program.

Although it is unfortunate that the Inspector General took nearly four years to release this important study, we are encouraged by the fact that the report acknowledges several areas in which Medicare's current regulations continue to fall short of protecting the public and the program's integrity. Even though CMS went as far as it could under current law to rein in this situation, the Inspector General's conclusion clearly recognizes that Congress should change the law to require that only licensed physical therapists provide physical therapy services in all Medicare settings.

At a bare minimum, Congress should take immediate action to accomplish the Inspector General's suggestion that the requirements for physical therapy rendered in physician's offices, including licensure, should not differ with the requirements for physical therapy rendered in other settings, such as independently practicing physical therapists' offices and nursing homes.

However, given the magnitude of the problem, APTA believes that step alone would be inadequate to address this problem. We call on Congress to completely remove physical therapy as one of the services that a physician may bill Medicare for as "incident to" the physician's professional services in the physician's office. Further, Congress must close the loophole created by Medicare regulations that creates inappropriate financial incentives for physicians to profit under the "in-office ancillary services exception to the 'Stark II'" ethics in patient referral legislation. The ability of physicians to control the referral of Medicare patients to physical therapy services in which they have a financial interest is obviously too great a risk to both patient care and the financial integrity of the Medicare program.

We are pleased that the Inspector General intends to conduct additional reviews of Medicare payments for physical therapy services provided in physician offices, but these findings clearly demonstrate that further study is not needed for Congress and the Administration to take strong action immediately. We urge Congress to convene hearings based on this report and the issues it raises as soon as possible and to take action this year to protect the Medicare program and the beneficiaries it serves.

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