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Chiropractic News

July 2008

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CHIRO BIZ QUIZ: Physical therapy and Medicare

Are you currently considering adding a physical therapist (PT) to your practice, or are you seeing Medicare patients in an integrated practice that incorporates a PT?

If so, there are important policies and procedures the Centers for Medicare & Medicaid Services (CMS) has adopted for therapy reimbursement you should be aware of.

The consequences of not abiding by Medicare’s rules can range from denial of claims and requests for retroactive return of payments to allegations of fraud and abuse. As a chiropractor, you are not able to write prescriptions for physical therapy, but for integrated practices with MDs or DOs, this does not present a problem.

For the sake of continuity of care, it is preferable to have the same doctor follow the patient and do periodic re-evaluations and prescription renewals if possible. The chart notes should clearly document the medical necessity for the therapy.

Problems can occur if the patient must be sent to their primary-care physician (PCP) for evaluation. The PCP may not agree therapy is necessary, or refer the patient to another therapist.

The inconvenience of having to make an appointment with the family doctor may delay patients getting physical therapy in your office.

For these reasons, it is a good idea for practices incorporating chiropractors and PTs to establish relationships with PCPs so you do not lose control of the patient’s therapy referral.


For Medicare patients, the rule is simple: Only a licensed PT or physical therapy assistant (PTA) working under the direct supervision of a licensed therapist may perform physical-therapy services, except for certain unattended modalities. Direct supervision means the PT is in the building and on site while therapy is performed.

Medicare also imposes a “one-on-one” rule. Each therapist can only be in attendance with one patient for timed codes. This applies to both exercise codes and manual therapy. Because of the high cost of PTs, this rule may dilute the profitability of therapy services. However, you can maximize profits by using less expensive PTAs along with a PT.

Each PTA may also see a patient one-on-one, thus maximizing the number of Medicare patients who can be seen at one time, but the number of PTAs that

can be supervised by one PT varies from state to state.
Also, remember Medicare’s requirement that only “qualified personnel” may perform therapy services has been extended to apply to the use of anyone other than a licensed PT doing therapy services billed “incident to” an MD — even if the doctor directly supervises the therapy. In other words, a PT still must be in attendance, even if an MD is present.


In addition to performing an initial evaluation, the PT must create a plan of care. This treatment plan should clearly show the medical necessity for treatment as well as the long- and short-term goals of treatment.

Functional goals relating to activities of daily living should be included.

This is important because Medicare regards pain relief and maintenance of current level of function as maintenance or palliative treatment, which is not reimbursable. If you do not clearly state goals and show progress towards those goals, you could get a request for a hefty refund.


Currently, Medicare reimbursement for therapy services is capped at $1,810 per beneficiary per calendar year. It does not matter if the patient saw a different provider, or has a new condition. There are, however, exceptions to the therapy cap.

In the past, there were automatic exceptions and requested exceptions, however now all are automatic. CMS provides a list of diagnosis that will allow an exception, but you must still have medical necessity. CMS emphasizes that most cases, even with an accepted diagnosis, should not require an exception. Be aware that once you exceed the caps, you must use a special modifier “KX” — which  alerts Medicare that your claim has exceeded the caps.

In short, physical therapy can be rewarding and beneficial to your Medicare patients and profitable for your practice, but the rules are complex and must be followed to the letter.

You should employ knowledgeable experts in practice management and billing to help guide you through the complexity.  

Marc H. Sencer, MD, is the president of MDs for DCs, which provides intensive one-on-one training, medical staffing, and ongoing practice management support to chiropractic integrated practices. He can be reached at 800-916-1462 or through

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