Blog Post

Founder Letter: The State of Rehab Therapy Billing

John Wallace breaks down the rehab therapy billing trends clinicians should be tracking—and offers tips on optimizing billing operations.

John Wallace
5 min read
October 5, 2022
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You may have noticed as you clicked on this post that I’m not your regularly-scheduled founder. In advance of our billing webinar later this month, Heidi graciously ceded the Founder Letter to me for a discussion of what’s currently happening in the world of rehab therapy billing—and there’s a lot, to be sure. Unfortunately, much of what’s happening isn’t necessarily positive for rehab therapists. But if there’s one thing you hopefully take away from this blog post, it should be that clinics and billing teams can adjust and organize themselves to the current reality to make things less painful for their practice.    

Targeted Probe and Educate audits are the new reality. 

If you’re a Medicare-affiliated provider, there’s a chance you’ve already dealt with a Targeted Probe and Educate (TPE) audit at your clinic. If you’re not yet familiar, CMS has been kind enough to let you know what to expect with this informative one-pager and Q&A. In short, CMS describes it as a program for providers who have high denial rates or unusual billing practices, with one-on-one educational sessions with Medicare Administrative Contractors (MACs) to help reduce rejections, denials, and appeals—a bit like after-school tutoring for clinicians.  

TPE audits are not a new phenomenon—the program was rolled out in 2017, and CMS notes there were 13,500 providers in the program from October 2018 to September 2019. However, CMS put a pause on TPE probes in March 2020 in response to the COVID-19 public health emergency, and resumed them in September 2021, which means many providers are having to reacquaint themselves with the program. And with COVID beginning to recede and Medicare expanding, TPE audits returned at an even greater frequency in spring 2022. The increased scrutiny for clinics of all sizes also has to do with the coding and documentation discrepancies discovered in the 2018 audit of physical therapy services conducted by the Office of the Inspector General. 

Don’t panic!  

As we’ve learned over recent years, there’s little to be gained by panicking over new changes, or rending our clothes and screaming to the heavens about how unfair the lot in life is for rehab therapists. Regardless of how anyone feels about TPE audits, they’re here to stay—at least for now.  Instead, providers are going to have to get smart about their billing practices—which means getting organized and avoiding the discrepancies that land you on TPE’s radar. Don’t worry, I’ll cover this in greater detail in just a bit.

We’ll have to live with third-party reviewers—for now.

There’s also a good chance you’ve had to deal with a third-party review at some point over the past year. That’s because commercial payers have increasingly outsourced the concurrent management of rehab services to third-party companies in an effort to save themselves money. With physical therapy, occupational therapy, and speech-language pathology only constituting about 1% of all healthcare spending in a given year, payers have come to the conclusion that it’s not cost-effective for them to manage these cases themselves—hence the outsourcing.   

Anthem, Cigna, Humana, and other commercial payers have all implemented programs to allow these intermediaries to authorize or re-authorize treatment and otherwise set policies for PTs, OTs, and SLPs. These companies, like AIM Specialty Health and CareCentrix, are looking to increase their own profitability by decreasing costs, and as such are often roadblocks for providers and patients alike in approving treatment. And while I don’t see the trend reversing in the near future, I do believe that third-party reviews will fall by the wayside eventually, as payers recognize that this type of outsourcing is too great of an expense for too little return.   

Providers need to adapt. 

Although I’m certain that, in the long term, value-based payment models will work in favor of rehab therapy, right now payers don’t need to operate under those models, so we have little leverage to try and force change. So for the time being, however, providers are going to have to deal with the reality of third-party review. And they can deal with that reality in two different ways: by dropping that particular insurer and going out-of-network—if it’s a financially viable option—or by working to organize their billing operations to minimize the potential pain points.


It’s never been more important to be organized in your billing processes. 

As payers continue to fine-tune their rules and reimbursement cuts put more downward pressure on payments, clinics will continue to deal with financial strain. Seeing as there’s not much that we can do in the immediate term about those external forces, providers must focus on improving their own billing processes to ensure they’re maximizing their revenue. 

No matter how your billing department is organized, there are some concrete steps that you can (and should) take every month to ensure an effective and efficient billing process:

  • Make sure you’re responding to requests for information from payers, whether they be commercial or Medicare/Medicaid.  
  • Likewise, have a disciplined process for how you handle denials of all types, whether they’re eligibility or authorization issues or missing data denials, or appealable or non-appealable denials.  
  • No one’s eager to get more emails in their inbox, but subscribe and pay attention to payer update emails, either from payers themselves or third parties managing claims on their behalf.  
  • Follow up on accounts receivable. Many billing departments hate dealing with A/R and end up leaving it until the last minute, and as a result, aren’t devoting enough time each month to collecting
  • Set aside a specific time each month to work on patient accounts.
  • Ensure that each billing department has one person that’s ultimately accountable — because if everyone is responsible, no one is.   
  • Payments should be posted against line item charges, and not dump payments into an unsigned account simply because it’s the end of the month. If you’re not tracking what you’re collecting and from whom, you negate the efficacy of your collection tools.
  • Follow up on patient statements that come back as returned mail. There are effective and affordable tools you can use for tracking patients down—a.k.a. skip tracing.  

One of the best ways you can avoid headaches and mistakes in your billing department is to offload much of the work to billing software. The right billing solution cuts down on the time and effort to track a claim status, payments, and patient balances, so it’s simple to reduce your A/R and increase the number of accurate claims.  

Thanks to Heidi for lending me this space to touch on some of the biggest billing issues of the moment. It would be wonderful to return in the future with more positive news, but until then, providers are going to have to stay on top of changes and adapt their own billing practices to current realities.   

If you want to learn more about the state of billing today, I’ll be discussing these and other billing updates during our live billing Q&A webinar on October 20 at 9 AM PDT. And don’t worry—I’ll try to answer as many of your questions as I can during the allotted time.

Physical therapy billing is confusing—but it doesn’t have to be.

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