Group therapy billing confusing for some

Watch how you bill for one-on-one time

Start asking questions about the way Medicare wants physical and occupational therapists to code group vs. individual therapy, and you’ll get a plethora of contradictory answers and some heated opinions to boot. It’s an issue; it’s not an issue. It’s wrong; it’s right. It’s confusing; it’s clear as can be. It flies in the face of traditional therapy training; it’s the way they’ve always done it. It’s a financial blow for providers; it’s not a problem at all.

That’s if you can get people to talk to you at all. Ever since the Baltimore-based Centers for Medicare & Medicaid Services (CMS) issued Carriers Manual Transmittal 1753 last May, many providers have hesitated to publicly discuss their interpretations of group vs. one-on-one therapy. Behind closed doors, however, it’s a hot topic. CMS officials themselves were unwilling to speak on the record, but their official position can be found on the web site, which contains a list — some say a long-awaited list — of frequently asked questions released in January. CMS also held an open-door conference call last September to answer questions on the topic (see an unofficial transcript of the call at

All of this debate stems from Transmittal 1753, which CMS officials say was issued to clarify — not change — the rules. But the effect was to say that many claims for one-on-one therapy actually should be billed as group therapy, which results in significantly lower payment. The transmittal defines group therapy services (code 97150) like this: "pay for outpatient physical therapy services (which includes outpatient speech-language pathology services) and outpatient occupational therapy services provided simultaneously to two or more individuals by a practitioner as group therapy services. The individuals can be, but need not be, performing the same activity. The physician or therapist involved in group therapy services must be in constant attendance, but one-on-one patient contact is not required."

In general, if a therapist is billing for a 15-minute session of a service that is done one on one with the patient, the therapist cannot bill for any other one-on-one or constant attendance service during that same 15 minutes, according to a CMS official. If a therapist treats two or more patients simultaneously, the therapist should use the group code. If the therapist can document the time that he or she worked one on one with each patient, the one-on-one codes may be used as long as the total time billed does not exceed the total time in which services were provided.

"This is a huge issue. CMS’ attempt to clarify a definition has really frustrated outpatient therapists," says Bonnie Breit, MHSA, OTR, president of BRB Consulting Inc. in Media, PA. "It’s not a group in the traditional definition of therapy if you say a group is any two people at any one time doing two different things. For group, therapists generally expect that the patients would be doing the same thing. Imagine what’s happening to all the providers. This discussion not only affects the way patients could get treated, but because of the fee schedule, group therapy is considered less skilled, which translates into less reimbursement."

Therapists know when a patient needs undivided attention and when he or she might be encouraged by working alongside another patient, Breit says. "Physical and occupational therapists make those decisions all the time, and they don’t need someone else defining if they ever walk out of that room from doing a massage or an ADL, now they have to bill group therapy," she says. "It’s a reimbursement issue and a practice issue. This may also reduce access. If therapists are limited to four units per hour, they may not be able to take two patients at a time. They won’t be able to afford the decreased reimbursement."

It’s hard to argue the point with CMS, though, because if a provider admits to having used a different interpretation of individual or group therapy, they may fear retroactive retribution, Breit says. "Nobody wants to be caught on the wrong side of the definition," she says.

Some providers say they disagree with the notion that a therapist is conducting a group session when he or she moves among patients who are in the office at the same time but who may not have the same diagnosis or be performing the same tasks. Given that the approximate amount paid last year for the group therapy code was $17.74 (which is an untimed code that can only be billed once per day) and the approximate amount paid for the one-on-one therapeutic exercise code (97110) was $26.43 per 15 minutes, it’s not hard to see why providers might complain.

HealthSouth blames losses on group code

Perhaps the loudest voice of complaint on this topic comes from HealthSouth Corp., the largest provider of outpatient surgery, diagnostic imaging, and rehabilitation services in the United States. The Birmingham, AL-based company has about 1,800 sites in all 50 states as well as Puerto Rico, Britain, Australia, Saudi Arabia, and Canada. In August, HealthSouth blamed the Medicare group therapy policy when it lowered earning estimates by $175 million. Shareholder lawsuits were filed questioning chairman and chief executive officer Richard Scrushy’s sale of $25 million in HealthSouth stock before the earnings announcement, and the Securities and Exchange Commission is investigating the matter. The company has said an internal review found no wrongdoing.

Scrushy strongly disagrees with CMS’ position that Transmittal 1753 did not change the way physical therapists bill for group therapy. He says physical therapists traditionally have moved from patient to patient when clinically appropriate in a practice commonly referred to as "dovetailing."

"When you change the rule from dovetailing, which is what all physical therapists are taught in every school in America and the way they have always worked in every practice in America, you’ve got a disaster of a rule," Scrushy says. "It’s a magnificent waste of resources. Could you imagine telling doctors or dentists that they could only treat one patient at a time? We do practice group therapy when patients have similar problems and are all working on the same thing. But CMS is saying that if you are treating two patients, even if they have completely different problems and need completely different therapies, that if they’re laying on a stretcher next to each other and you touch one while the other’s stretching, you’ve got group therapy. It’s absolutely ridiculous."

Forcing physical therapists to work with only one patient at a time means they can see only about six patients in one day as opposed to as many as 25, and that has the potential not only to reduce profits but also to reduce patient access to care, Scrushy says. "PTs can do some outstanding work and have some outstanding outcomes working with more than one patient at a time. This is a tragic waste of some really talented people," he says. "I have two daughters who are physical therapists, and they say they’re spending a lot of their days now just standing around while Medicare patients are out in the waiting room. It’s very inefficient and makes no clinical sense at all. This is going to cost the health care industry billions of dollars."

Scrushy says HealthSouth is complying with the policy 100%, but physical therapists still have a lot of questions about it. "Our PTs are being extremely conservative in our coding. They may have been a little too conservative in their concern that they don’t violate any of the rules," he says. "It’s a confusing situation."

Another problem Scrushy has with this system is the reimbursement amount itself. The Balanced Budget Act of 1997 required CMS to establish uniform coding for outpatient rehabilitation services, which meant that providers went from cost-based reimbursement to the Medicare Physician Fee Schedule. "When we were under cost-based reimbursement, the reimbursement amount took into account rent and utilities and other overhead," Scrushy says. "Now that we’re fee-based, they’re using the same amount, but they didn’t figure in all those other costs. CMS needs to re-price the fees."

APTA claims codes undervalued by 18%

The fee schedule is perhaps the only area of this argument in which the American Physical Therapy Association (APTA) would agree with Scrushy and HealthSouth. APTA, based in Alexandria, VA, supports CMS’ interpretation of the group therapy code, but does have a couple of issues with CMS, including the fee schedule, says Gayle Lee, associate director of federal regulatory affairs. "We’re working on other areas with respect to this fee schedule. We think the practice expense methodology that CMS uses is flawed," Lee says. "We think it significantly underestimates — by about 18% — the value of the codes in the 97000 series [physical medicine and rehab codes]. We’ve met with CMS on that issue. We’re trying to get the payment increased for all of the codes. If they would go back up on that, it would help a lot with finances."

The 2003 Medicare Physician Fee Schedule final rule, published in the Federal Register on Dec. 31, does increase this year’s payment to physical therapists by about 2%. But APTA points out that basic flaws with the fee schedule formula more than offset the increased physical therapy values.

On the issue of what constitutes group therapy, APTA agrees with CMS that any outpatient physical therapy services provided simultaneously to two or more patients constitutes group therapy. "We find it very difficult to say that you’re one-on-one with more than one patient at the same time," Lee says. "The position CMS has taken is if you’re not one-on-one, you can bill for all patients as group or you could go back and forth between the patients and bill for the time that you’re one-on-one with each particular patient and aggregate your time. That’s always been our understanding. From our understanding, this is not all that new."

APTA is concerned that some providers are having difficulty getting reimbursed if they bill both a group code and a one-on-one code for the same patient on the same day. CMS says you can bill both, but you must use a modifier. "We disagree with that edit," Lee says. "We think you should be able to do both of those services in the same session. We’re trying to work with CMS on that. If they’re going to advise people to use the group code, then they need to pay for it. There are some implementation issues out there, and we’re focusing on those rather than making an argument that you can bill more than one patient at the same time."

Thomas Grissom, director of the Center for Medicare Management, sent a letter (available at to APTA in November expressing concern with the payment problems reported by APTA. He requested that APTA send specific information about these problems to CMS’ division of practitioner services.

They’re throwing therapists to the dogs’

Scrushy of HealthSouth says APTA is making "a tragic mistake" by agreeing with CMS’ interpretation of group therapy. He says they like the policy because it will increase the need for physical therapists. "APTA is burying its head in the sand," Scrushy says. "They are letting the industry down. They’re throwing therapists to the dogs."

APTA, of course, doesn’t see it that way. Andrew Guccione, PT, PhD, senior vice president of practice and research for APTA, doesn’t buy the argument that this is the way therapists have traditionally worked.

"Traditional doesn’t necessarily mean right," Guccione says. "It’s done, but APTA has advised against it. It’s been a longstanding principle in our code of ethics that you abide by the law, that you represent your services truthfully. If there’s a discrepancy, we have the responsibility as a professional organization to advise people how to describe their services appropriately. We’ll fight for your reimbursement if we think there has been a capricious denial. We are vigorous in promoting fair payment, but you can’t fudge on the description."

Guccione says there’s no uniform definition of dovetailing, which could either mean staggering patients’ arrival throughout the hour or going back and forth between patients. He says the key is to look at whether the therapist is giving the patient divided or undivided attention. "In order to provide one-on-one services, which is the way many of the CPT codes in the 97000 series are, that means I’m paying attention to you and you alone. That doesn’t necessarily mean I will work with you for a half hour straight," Guccione says. "I may work with you for 12-14 minutes — one unit of one-on-one care — then I may ask you to rest or give you an unattended modality, and then I see the next patient, and then I may come back to you. That’s different from group. The situation that has arisen is that if I call in three or four patients and I run around the room and speak to everybody, that’s the divided attention. That has the characteristics for group. One-on-one is one-on-one and group is not."

This isn’t Hollywood

As for the profit issue, Guccione says he’s confident that many providers are following CMS’ interpretation and doing just fine. "You may not be making money hand over fist," he says. "This isn’t Hollywood. If you really want to get paid like a rock star, keep practicing the guitar. There is legitimate profit, but there is not overwhelming profit. It’s a human service with an ethical basis. It’s not the business to have enormous profits."

What about the issue of potential reduced access for patients? Guccione says it’s true that physical therapists have to hustle, but they must continue to put the patients’ needs above profits. "There is probably an optimal combination to provide care efficiently and still make money," he says. "But our code of ethics is very clear. You can’t put financial gain above the patient. There are cost efficiencies; many clinics are billing this way and still making a profit. If you need to cut costs, look at your square footage, your mix of personnel, whether you’ve hired too many people, whether your productivity standards are too low. You also have to recognize what a reasonable profit is given your case mix."

The bottom line, Guccione says, is that this is the way it is. "When you enter into a contract with any insurer, you agree to abide by their rules. The rules say please use the CPT codes. That’s what you agreed to do. You don’t fudge. If you disagree, you argue with it."

Theresa Woodard, PT, director of rehabilitation services for St. Francis Hospital in Greenville, SC, says her institution tries to avoid billing the group code altogether. "Medicare allows it, but it has to be coded with a modifier, and you have to make sure the documentation supports it," she says. "Your note has to explain why they needed group and why they needed individual, what the difference was, and what the goal of each was. We try to avoid having to do that. It would be the exception, not the rule, that we would do group and individual on the same day. From a clinical standpoint it’s hard to explain the difference in your documentation."

From a compliance standpoint, Woodard says it’s just easier not to use the group code. "It’s almost like they’re asking you to fail," she says. "They’ve made it so difficult that it’s next to impossible to comply. You can bill differently in the private sector, so that’s going to complicate things even more. You have to think, Is this a Medicare patient?’ and it can cause problems to treat them differently from other patients. It’s cleaner all the way around to treat all patients the same."

Besides the documentation issue, billing group comes down to simple economics, Woodard says. "If we bill therapeutic exercise, it’s something like $26 or $28 every 15 minutes, so if you see a patient for an hour, that’s over $100 for the hour that Medicare is going to pay you," Woodard says. "For the group rate, they only pay $13, so you’d have to see six or seven patients in that same hour to get the same amount of money from Medicare. It’s really just not cost-effective for us to get $39 for that hour with three patients when we could see just one patient and get $100, and that patient gets more individualized care."

Woodard says the CMS policy doesn’t jibe with what she learned in PT school. "We were taught dovetailing where you have two patients at the same time. You might work with two patients at the same time where they’re doing different things but they’re in close proximity to you," she says. "You could let one rest and then spend a few minutes with the other one. Now, if you have two in the gym at the same time, that’s group therapy. We’ve stopped doing that."

Dovetailing makes sense, Woodard says, because each patient has a different tolerance level. "If you were able to have two or three patients working in the same vicinity, then they could work at their own pace and take rest breaks, and they ultimately could probably do more," she says. "If you are confined to a 45-minute period, then you’re going to try to cram everything in and make sure they’re busy that whole 45 minutes. If I’m scheduling patients for one-on-one therapy, then if I give them a 15-minute rest break, I don’t have anything to do. That’s non-billable time for me."