Medicare’s New Policy on Supervision of “Incident To” Therapy Services

Update – 4/7/05: As of today, CMS has not yet released Medicare manual instructions regarding the change in policy on supervision of “incident to” therapy services. CMS does not have a timeline for when the instructions will be released. Although this policy will not be enforced until manual instructions are published, the Academy recommends that members affected by the policy make any necessary changes to be in compliance.

The Centers for Medicare and Medicaid Services (CMS) recently changed its regulations and policy with respect to therapy services provided “incident to” a physician’s service. Effective sometime after March 1, 2005, Medicare will only cover therapy services furnished “incident to” a physician’s service if the services are furnished by physical or occupational therapists or by physical or occupational therapist assistants under the supervision of a therapist.This new regulation will apply only to Medicare patients.“Incident to” therapy services provided to non-Medicare patients are not affected.Additionally, many states have already enacted laws requiring that therapist assistants be supervised by a therapist.

There are provisions in Medicare law that allow physicians to continue to provide “incident to” therapy services when furnished by physician assistants, nurse practitioners, and clinical nurse specialists.Additionally, physicians can continue to bill for any therapy services they provide personally.

“Incident to” therapy is therapy billed under the physician’s provider number as if the physician had performed the service.Prior to the change in policy, Medicare covered therapy services by non-therapists, such as therapy assistants and athletic trainers, provided they complied with the “incident to” rules (e.g., were furnished under the physician’s supervision while the physician was present in the office suite).

The Academy’s position: The Academy opposed this change in policy on the grounds that physiatrists should be able to provide therapy services with individuals of their choosing who are acting under their direct supervision.The Academy submitted a letter and met with CMS staff in an effort to convince them that physicians trained in PM&R had the expertise necessary to supervise therapy provided by professionals other than therapists.In addition, the Academy joined a coalition of other medical specialty and non-physician practitioner societies opposing the proposed rule.Unfortunately, the Academy’s and coalition’s efforts were not successful.The Academy believes that CMS was concerned about the quality of therapy services being furnished by non-therapists and supervised by physicians who were not trained in PM&R (or similar specialties).CMS was unwilling or unable to create an exception for physicians with special expertise, such as physiatrists.

Physicians affected by the change in policy: Academy members who provide physical, speech, or occupational therapy through the use of therapy assistants, therapy aides, or other non-therapist professionals will likely be affected by the new rules.Medicare states that it will implement the new policy some time after March 1, 2005, once manual instructions are published.The Academy recommends that physiatrists begin making whatever changes are necessary in their practices to be ready for the new policy and advise that they be on the alert for communications from their carriers.

Provision of “Incident to” therapy services by non-therapist practitioners: The new rules clarify that it is still permissible for physician assistants, nurse practitioners, and clinical nurse specialists to furnish therapy services “incident to” the physician’s service if they are permitted to perform those services under state law. Thus, individual state scope of practice laws will apply.In addition, Medicare will cover therapy that is provided “incident to” the service of an NPP when furnished by a therapist.In the latter case, the NPP must be enrolled in Medicare and the service must be billed under the NPP’s provider number. Medicare pays for services of NPPs at 85% of the physician fee schedule amount.

This change in policy does not affect situations in which the therapist is billing under his or her own provider number because those services are not considered “incident to” services.

Role of athletic trainers, therapy aides and other non-therapists: Under the new rule, physicians are not permitted to bill Medicare for therapy services performed by athletic trainers, kinesiologists, therapy aides, therapist assistants, or any other non-therapist professionals. Physicians will be able to bill other payers for services of these individuals if permitted under state law and if covered by the private payer under the terms of the policy.

Role of therapist assistants: Physicians cannot bill Medicare for therapy services provided under their supervision by therapist assistants even if those individuals are licensed or certified under state law. Medicare will cover services of therapist assistants only when they are supervised by therapists.

State laws: Many states already have laws contained in their state physical therapy practice acts that require that physical therapist assistants be supervised only by a physical therapist. In such cases, physicians are prohibited from supervising “incident to” therapy services provided to all patients, including Medicare. In states that already prohibit physician supervision of physical therapist assistants, the new regulations should not have a significant impact on the provision of “incident to” therapy services.

The Academy contacted the Physical Therapy Licensing Board in each state to determine the state’s supervision requirements for physical therapist assistants.While many state regulations do not explicitly prohibit a physician from supervising a physical therapist assistant, most state licensing boards require that only a physical therapist supervise a physical therapist assistant.Following are the Academy’s findings on state regulations governing supervision of physical therapist assistants. We are awaiting information from those states not listed below and Puerto Rico. Updated information will be posted on the Academy’s Web site.

States in Which PTAs Must Be Supervised by a PT

• Alabama

• Alaska

• Connecticut

• Delaware

• District of Columbia

• Idaho

• Iowa

• Kentucky

• Louisiana

• Maryland

• Minnesota

• Nevada

• New Jersey

• New Mexico

• New York

• Oklahoma

• Oregon

• Pennsylvania

• Rhode Island

• South Dakota

• Vermont

• Virginia

• West Virginia

• Wisconsin

States in Which PTAs May Be Supervised by a Physician

• Colorado

• Indiana

Additionally, some states have passed laws that restrict the ability of physicians to employ or contract with therapists.In those states (including Delaware), physicians may be entirely prohibited from providing any in-office therapy services to Medicare patients unless they furnish the service personally.

New Medicare supervision policy for therapists: Effective January 1, 2005, therapists supervising therapist assistants no longer need to provide “personal” (i.e., in the room) supervision. Instead, only “direct” supervision is necessary, meaning that the therapist must be in the office suite available to provide assistance, but need not be in the same room with the patient. This permits therapists to supervise more than one therapist assistant concurrently. This more liberalized supervision rule also applies to therapists employed by physician practices.

Supervision ratios: Medicare defers to state law regarding the number of therapist assistants a therapist may supervise at the same time.

Physician certification of therapy still required: Medicare rules have not changed with respect to the requirement that the plan of treatment for therapy services be certified by a physician or NPP, and that the continuing need for therapy be recertified at least every 30 days. In addition, the plan of treatment must still prescribe the type, amount, frequency of duration of therapy, and indicate the diagnosis and anticipated goals.

Further guidance: CMS has published additional guidance on the CMS Web site at www.cms.hhs.gov/medlearn/therapy/billing.asp, addressing, among other things, coding, overlapping procedures and group therapy vs. individual therapy.

For questions on the new Medicare rules please contact the Academy’s offices at 312-464-9700 or via e-mail: info@aapmr.org.

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