Why It Is The Way It Is

A couple of weeks ago Joe Paduda in his Managed Care Matters blog posted that there was a suspicious upcoding of physical therapists billings by some networks using the "59 modifier."

It seems there are some medical networks that are adding the 59 code to bills without a) telling the actual provider of the services, and b) automatically and systematically without supporting documentation.

And they have been getting away with it.

Paduda states that there is a concerning lack of appreciation for what this means - the actual providers, the physical therapists, aren't too concerned as long as they get paid, despite the fact that someone or some entity is modifying their billing without their knowledge against professional protocol.

The modifier is typically used when two procedures are used on the same patient within 15 minutes. In some cases, those services would be bundled together and reimbursed as one item. But for others, the provider appends the number 59 to the code to indicate that they should be reimbursed separately.

Paduda, a principal in the firm Health Strategy Associates, says that some of his clients have seen modifiers on more than 40 percent of their bills, but also notes that there is some official documentation floating around that indicates that the 59 modifier shouldn't be seen on more than 10% of the bills.

Something is amiss.

"I think I'll take a mile..."

One commentator to Paduda's blog post states, "I am in CA and this is on my radar. I am concerned. Several of my colleagues can confirm what you are saying is 100% true. I have seen the smoking gun. In this case, the gun is still red hot and has not come even close to cooling down. The gig is up…"

What is the gig?

The motivation on the part of the networks and the third party administrators they are tied to, it seems, goes to their marketing and reimbursement practices whereby the TPA gets a percentage of billings saved.

Inflating bills creates the illusion that the network is saving payers more than it actually is. Because a network might reimburse for 80% of a bill, it would show the payer that it saved $20 off a $100 bill for physical therapy. But if the bill was $120 because of a 59 modifier, the network would report to the payer that it saved $24.

In an interview with WorkCompCentral, Paduda wouldn't identify who is doing what, and clearly these bad apples are the exception.

And it comes down to transparency, which is tied to the number of entities through which a bill is passed until payment is rendered.

“The only way we could show that this has been done is if we were able to get the bill that was sent on to the third-party administrator or the employer and compare it to what we've originally sent in,” Jeffrey Hathaway, president of the Physical Therapy Business Alliance, told WorkCompCentral. “So there's no transparency. We have no idea what the network is getting paid, we have no idea what the network is telling the third-party administrator.”

So, once again, give someone an inch and they'll take a mile - which is exactly why work comp is the way it is today: because people can't behave themselves without someone overlooking them with baseball bat in hand to keep things in check.

You don't have to wonder why work comp is the way it is. Just open your eyes (ears and wallets).