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False Claims and Physical Therapy

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If you listen to the news, you may have heard about “whistleblowers.”  Whistleblowing, in the legal context, generally refers to speaking up against activity that a person reasonably believes is either against the law, against a regulation, or against a public policy. The predominant law relied upon by whistleblowers is the False Claims Act (FCA). 

The FCA has what is called a “qui tam” provision. This provision allows a private individual to secretly report fraud when there is a reasonable belief that fraud has been committed against the federal government or any of its agencies. Approximately 80% of fraud committed against the government is related to healthcare services under the Medicare and Medicaid programs.

The rewards for “blowing the whistle” can be significant. Under the FCA, people who “blow the whistle” on fraud committed against the government are generously rewarded. The whistleblower can receive between 15% and 30% of the settlement amount negotiated between the government and the person or entity that committed the fraud.

The penalty of each violation of the FCA may be up to $11,000, plus an additional three times that amount in additional damages. This penalty is assessed regardless of the value of the false claim submitted to the government. The fraud could be as little as $5. Nevertheless, the penalty may still be $11,000 for each occurrence, plus triple damages. As you might imagine, it adds up very quickly.

Within physical therapy, for example, fraud may be present in a variety of ways. One of the most prevalent mechanisms of fraud involving outpatient physical therapy is overbilling. Many CPT codes for physical therapy (and occupational therapy and chiropractic) are time-based codes measured in 15-minute increments. In addition, these codes are defined in terms of one-on-one contact between the provider and the patient. These codes are commonly 97110, 97112, 97124, 97140, and 97530. For these codes, Medicare has an “8-minute rule” that sets forth the minimum time requirements necessary to bill an incremental unit of these codes.

Overbilling also occurs in physical therapy home health settings. Medicare’s Part B physical therapy benefit allows patients to receive physical therapy in their own home. The physical therapist cannot bill Medicare for travel time or include travel as any part of a CPT code. The physical therapist’s billable time does not start when the therapist parks in the driveway of the patient’s residence. It does not start when the therapist walks into the home. Billable time starts when the medically prescribed services actually begin. Documentation is not billable to Medicare either.  Treatment time requirements follow Medicare’s 8-minute rule.

The FCA also makes it illegal to keep money received as a result of an overpayment from Medicare or Medicaid. Medical providers are required to report overpayments to Medicare/Medicaid and return any overpayment within 60 days of an overpayment discovery. An overpayment can result when the provider is paid in excess of the allowable for a CPT code. An overpayment can also result when a provider bills Medicare and subsequently receives payments for costs in which the medical provider did not incur.

In order to be a whistleblower, the necessary steps under the FCA must be followed exactly to recover any money. For this reason, an experienced attorney should be used to prepare and file the claim.