6 Surefire Signs Medicare Will Audit Your PT Practice (and How to Fix 'Em)

Camping season may be over, but I’m in the mood to tell a scary campfire story. So, here goes: It’s an average work day. Your last patient just left, and you’ve got a little downtime between appointments to grab a cup of coffee and catch up on documentation. As you sit down at your desk, you notice a stack of envelopes. “The mail must’ve come early today,” you think to yourself. As you thumb through the advertisements and bills, one letter in particular catches your eye. You open it up and your blood runs cold: CMS auditors are requesting copies of all your documentation. Are you freaked out yet? I know I’d be.

While the average person may not flee in terror at the mere mention of a Medicare audit, healthcare providers—rehab therapists included—know just how scary these can be. But, undergoing a CMS audit doesn’t have to be a total nightmare—especially if you’ve prepared for one ahead of time and you know which Medicare red flags to watch out for. To that end, here are six telltale indicators that’ll surely grab a Medicare auditor’s attention (and how to fix or avoid them):

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1. Your billing practices make you an outlier from your peers.

When I think of the term “outlier,” it conjures up images of James Dean perched on a motorcycle in a leather jacket. While Dean’s brand of cool nonconformity made him a star, Medicare sees nonconformists in a different—and much less flattering—light. Specifically, Medicare auditors will single you out if:

  • your billing habits are inconsistent with the national average;
  • your documentation has a higher-than-average error rate;
  • you frequently bill a large number of codes for single dates of service; or
  • you bill for certain codes way more frequently than the national averages for those codes.

The Fix: Ensure your documentation supports your billing practices—and possibly hire a coder.

If you suspect that your billing practices are making you stick out, it’s important to show CMS that you’re not just a rebel without a cause. For example, if your claims are returning higher reimbursements compared to your peers, make sure your documentation supports your code choices. Additionally, if your claims are frequently rejected due to coding errors, you may want to enlist the services of a licensed coder.

2. You have aberrant billing practices.

Okay, so maybe you’re not billing above the national or regional average. That means you’re safe, right? Not quite. Medicare auditors are also on the lookout for billing patterns that lack consistency or completely go against standard billing practices. Some notable examples include:

The Fix: Use tools and resources that help ensure Medicare compliance.

It’s vital that you fully understand the rules and requirements relevant to each one of these scenarios. (For example, it’s never acceptable to bill Medicare for services rendered by a student.) Subscribing to educational resources like CMS email updates, APTA news releases, and the WebPT Blog can help you stay in the know on Medicare rules and compliance changes. (If you’re wondering whether your billing knowledge is up to snuff, be sure to take our billing blunders quiz.) Additionally, if your EMR platform features built-in compliance alerts and safeguards, it can help you catch smaller errors such as underbilling and 8-minute rule noncompliance.

3. Your documentation falls short.

Even if your claims appropriately reflect the services you provided, your medical documentation still must stand up to intense scrutiny. If it’s lacking, it could leave you in hot water with Medicare auditors.

The Fix: Triple-check your documentation for clarity, accuracy, and certification requirements.

Before you ship that claim off to Medicare, make sure you dot all the i’s, cross all the t’s, and avoid these common documentation mishaps:

  • Missing certification dates or failure to recertify the plan of care when necessary
  • Documentation that was modified after the claim was denied
  • Cloned documentation
  • Illegible physician or therapist signatures
  • Absent physician signature when one is required

4. Your documentation doesn’t support the medical necessity of your services.

Medical necessity has always been a hot-button issue in the Medicare sphere, and that’s especially true this year. Thanks in part to the terms of the Jimmo v. Sebelius settlement, Medicare has made great strides in clarifying which services it deems medically necessary—particularly with respect to maintenance care. That’s good news for therapists, but as I mentioned in this post on the topic, it also means that “proving medical necessity could become an even larger issue for rehab therapists as charts come under increased scrutiny.”

The Fix: Document defensibly.

For that reason, it’s critical that you not only justify medical necessity within your documentation, but also:

  • supply Medicare beneficiaries with an advance beneficiary notice of noncoverage (ABN) before providing covered services that aren’t considered medically necessary; and
  • refrain from knowingly submitting claims for services that are normally covered by Medicare when they are “reasonable and necessary” without proving medical necessity in your documentation.

5. You frequently misuse codes and modifiers.

The rules around code usage change every year—the 2018 final rule is proof of that. And let’s face it: keeping up with those changes can be a challenge. But, CMS expects you to stay up to date, and failing to do so could lead to some major red flags. Common code-related warning signs include:

  • above-average use of the KX modifier or 59 modifier; and
  • use of any codes under review for overuse by the Office of the Inspector General.

The Fix: Consider bringing in an expert.

In many cases, a billing or coding specialist can help you catch these errors before you ship your claims off to Medicare. But, even if you employ a licensed coder, it’s always a good idea to educate yourself on the ins and outs of various code changes and modifier rules.

6. You’ve received a Comparative Billing Report.

With all of this doom and gloom, it’s easy to paint CMS as the villain. If you’re familiar with alignment charts, you might be tempted to think of it as a “chaotic evil,” when in fact, it’s really more of a “lawful neutral.” In other words, CMS doesn’t want providers to fail, but it also doesn’t want to dispense larger reimbursements than it absolutely has to.

Case in point: When CMS identifies a provider with potentially aberrant billing practices, it will notify that provider with a Comparative Billing Report (CBR). Simply put, this report will show you how your billing practices compare to those of other providers in your region.

The Fix: Identify the source of your irregular billing practices.

While receipt of a CBR doesn’t always mean you’ll be audited, it can often be a precursor to an audit if your documentation does not support your billing practices. So, if your billing practices have room for improvement, be sure to use the feedback in the CBR to make the appropriate adjustments to your process. That said, there may be a perfectly valid reason why your practices fall outside the norm. If that’s the case, just be sure that your documentation supports your practices, because as this PT Compliance Group article states, “If you’re firm in your belief that you’re doing nothing improper in your billing/coding and make no changes [to your billing practices], then it is fair to say that, eventually, Medicare will want to take a look.”


In scary movies, it seems like the main character can never outrun the bad guy. The same is true when it comes to Medicare audits. No matter how fast you are, questionable billing practices will always catch up with you. If and when they do, you better be ready to defend yourself with defensible documentation. With a healthy dose of vigilance—and the right tools to keep your documentation up to snuff—you’ll be ready for anything CMS throws at you.


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