Insight, analysis & opinion from Joe Paduda

< Back to Home


Fraud? Abuse? Ignorance?

I promise your eyes will NOT glaze over – but you need to know what’s going on in the arcane world of procedure coding. Why?

Because your PT costs may be $15-$19 per visit higher than they should be.  And the savings your vendor is touting might be even more inflated.

Here’s what’s going on – and remember, this is specific to PT.

It’s common for therapists to perform multiple procedures at the same time – on a single body part.  There’s a list of procedures that are commonly performed together, and unless the therapist adds a specific modifier to the procedure code, only one will be reimbursed.

Nationally accepted standards (under CMS’ National Correct Coding Initiative) allow the therapist to be reimbursed for only one of these procedures.  Sometimes it is appropriate for the PT to bill for multiple procedures – for example, if two procedures commonly done simultaneously are performed at separate and distinct times.

In this circumstance, the treating provider documents the reason for the variance in coding in the medical notes.  On the bill, the “59 modifier” is added to the end of the CPT code to indicate that the code should be paid.

Hang in there – almost done…btw there’s a good overview of the latest info on this courtesy of medical bill review company Equian here

National average statistics (from two HSA customers I’ve been working with on this) indicate the 59 modifier should be on about 11%-15% of lines on PT bills.

Which brings me to the crux of the matter.  Some payers are seeing 59 modifiers on almost ALL BILLs.  After a lot of research, digging thru billing data, and back-and-forth with therapists and PT networks, it appears the 59 modifiers were NOT added by the therapist; they were added by a PT network company.

Further, there’s no explanation in the treatment notes for this billing practice; no evidence the affected procedures were actually performed at separate and distinct times; no indication the PT network company reviewed the treating provider’s notes prior to upcoding.  No documentation, no record, no history.

It appears that the intermediary was adding the 59 modifier as an automated system edit without reviewing the treatment notes. Without putting too fine a point on this, the systemic upcoding has resulted in higher costs for payers, along with significantly exaggerated savings as the bills show higher billed charges.

Perhaps there is a perfectly reasonable explanation for this, however I’ve not heard one to date.  And the coding experts I’ve spoken with can’t seem to come up with one either.

Let me be clear – this is specific to the use – appropriate, inappropriate, or questionable – of the 59 modifier, and only the 59 modifier. Ongoing research has not turned up other billing-related issues.

What does this mean for you?

You need to ask your billing folks to review their PT billing data to determine if:

  • You’ve been paying too much for PT

  • You have made decisions on PT vendors based on inaccurate information

  • Your employer clients have been billed for too much PT, and paid too much for managed care services.

How will you know if this is a problem?
Look at bills processed between 2009 and 2014 –

  • If more than 20 percent of lines on your PT bills have the 59 modifier, you MAY have a problem.
  • If more than 40 percent of the lines on your PT bills have this modifier, you DO have a problem.

What do you do if you think you’ve got a problem?

  • Ask your PT network/billing intermediary to explain, and require them to show why they are adding the modifier and how they are justifying doing this without reviewing the treating provider’s bills.

That will be a very interesting conversation…

12 thoughts on “Fraud? Abuse? Ignorance?”

  1. Joe,

    If true, this is simply stunning.

    There is always a risk when bills are processed through a third-party payer that someone can play with the data. Why? Nobody on the payer side conducts audits. An audit should consist of knowing what the provider billed and then comparing that bill to the one that was produced by the vendor.

    Finally, in order to be sure that this is not a common practice, one should look beyond the PT business as well.

  2. Network Synergy eliminated all of the above, with the same fixed fee to the payor regardless of severity of the injury or number of visits to rehabilitate the injury. Network Synergy’s bill did not go through bill review.

    1. Ok, Shelly. Your position is clear and should be respected by anyone who reads this.

      Who else is going to stand up to defend themselves?


  3. Wow, this does not surprise me. Never have and never will trust the third party networks that abuse the providers and lie to the payers. Have learned too much about how the WC PT Networks make their profits off the backs of hard working PT providers.

    1. Chuck – thanks for the comment. I’d suggest it isn’t fair to tar all networks with the same brush; that would be akin to saying all PTs are bad because some overutilize and overtreat. There are bad ones and there are good ones.

      1. Joe, point made and taken. All I can relate to is that these third party networks burden the providers with wasteful and useless rules that add NO value to the equation for either patient or employer. Perhaps the payer is able to shift some of their efforts so they get some benefit. Providers are being forced to do more work and get paid less. This is not as sustainable course. I noticed that MedRisk defended themselves. I wonder what other networks like Align would say. Can’t wait for the audits comparing the provider’s claim forms and those submitted by the network. Hopefully the payers will get right on that and have it done by an independent respected auditing firm.

  4. Was the research on modifiers and the discrepancy found was only modifier 59? You mentioned the research has not turned up other billing related issues. Did research include actual units delivered by the provider vs actual units billed by the specialty network? For example 3 units delivered and reported by provider vs 4 units delivered by the network.

    I would be very interested in knowing that. Heck, I would share notes with the Payor.

    Should we be scared that this rabbit hole goes even deeper?

  5. As President of the Physical Therapy Business Alliance, who represents private practices throughout the country, we of course are extremely disturbed by what the content of this post suggests. We have many concerns with the practices of these networks, but first lets address the direct issue in Joe’s blog.

    The manner PT’s are required to bill for the services they render are governed by contractual obligations with payers, which incorporate various coding principles including CPT coding guidelines, as well as those adopted in Medicare’s correct coding initiative. These “guidelines” require PTs to appropriately append modifier 59 to claims submitted to correctly identify all of the services provided. Among the many patient specific reasons necessitating the use of modifier 59 is that multiple, separately identifiable procedures are rendered during a single patient visit due to the needs of the patient.

    Moreover, we believe any generalized statement as to what percentage of visits should occur in which multiple services are rendered, and appropriately billed with modifier 59, is inappropriate. In the end, whether modifier 59 should be used is a patient specific analysis that should rest with the treating provider.

    Let there be no mistake, PTs as a group are fully committed to billing appropriately, and correctly. Outliers undoubtedly exist, and their practices should not be condoned.

    Furthermore, the Practice Acts for Physical Therapist licensure includes statute and rules language noting the physical therapist’s responsibility for patient care management including accurate documentation and billing of the services provided. Clearly this practice of the networks/middlemen changing the physical therapist’s actual billing places the PT at great legal risk.

    Jeffrey W Hathaway, PT, DPT
    President PTBA

    If networks are in any way changing what a provider codes that is a very serious allegation, and if true, is likely fraudulent. If true, such companies should be excised from the system.

  6. CMS (aka Medicare) has also identified that the ’59 modifier “…is associated with considerable abuse and high levels of manual audit activity; leading to reviews, appeals and even civil fraud and abuse cases. …”

    “CR8863 provides that CMS is establishing the following four new HCPCS modifiers (referred to collectively as -X{EPSU} modifiers) to define specific subsets of the -59 modifier:

    XE Separate Encounter, A Service That Is Distinct Because It Occurred During A Separate Encounter,

    XS Separate Structure, A Service That Is Distinct Because It Was Performed On A Separate Organ/Structure,

    XP Separate Practitioner, A Service That Is Distinct Because It Was Performed By A Different Practitioner, and

    XU Unusual Non-Overlapping Service, The Use Of A Service That Is Distinct Because It Does Not Overlap Usual Components Of The Main Service. ”

    (I found this in the Medicare MLN Matters #MR8863).

  7. I work for OnSite Physio, a nationwide provider of physical/occupational therapy services in the workcomp space. We work directly with the employer allowing them to see exactly what we are charging and the service/results they receive in return. The approach that we utilize is a flat fee for therapy treatments, hence not facilitating the need for any modifiers to be incorporated into the fee structure. In essence, we have been able to create a very transparent fee system that works for our employer clients as well as OnSite Physio, the provider.

    Daniel Sanchez, PT, CEAS
    Vice President – Operations

Comments are closed.

Joe Paduda is the principal of Health Strategy Associates



A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.



© Joe Paduda 2022. We encourage links to any material on this page. Fair use excerpts of material written by Joe Paduda may be used with attribution to Joe Paduda, Managed Care Matters.

Note: Some material on this page may be excerpted from other sources. In such cases, copyright is retained by the respective authors of those sources.