FAQ – Ancillaries

• Q: Can we only bill one 97001 for a condition in a year?
• Q: Our office purchased DME equipment such as braces and crutches and supplied them to our Medicare patients. Can our doctor who also owns the practice receive a percentage of the reimbursement from Medicare as part of the company’s remuneration?
• Q: Can we locate ancillary physical therapy off-site?
• Q: Can we accept physical therapy referrals from outside physicians?
• Q: Can physicians (not within the same group practice) set up a partnership to own and operate a PT clinic? Could the physicians post notices of “ownership interest” and disclose to patients (like an ASC) and be compliant with Stark Laws?

Can we only bill one 97001 for a condition in a year?

CPT states "…should be reported once per episode, regardless of how many body parts are involved." A patient could be sent to therapy more than once a year and it could be for the same issue – let’s say they started therapy Jan 1st for the left knee. They got better and then in October they re-injured their left knee and are sent to therapy again, that would be a new episode to support 97001 even if same diagnosis/condition..

Dec 2003 CPT Assistant

Physical Medicine Codes

The physical medicine codes 97001, Physical therapy evaluation, and 97002, Physical therapy re-evaluation, are different from the evaluation and management (E/M) codes. They do not include management services and are strictly for the purposes of a comprehensive evaluation and reevaluation needed to support medical necessity for further care. These codes may only be used in addition to other services, if significant enough to report, and require separate effort from the provider in addition to other procedure(s). Codes 97001-97002 should not be used with modifier ‘25,’ as this modifier is intended to be used for codes 99201-99499 included in the E/M section of CPT. Codes 97001-97002 should be used when the physical therapy evaluation and reevaluation are not an inclusive component of the other procedure(s) being provided.

Code 97001 is intended to be used to report a physical therapy evaluation performed at the beginning of an episode of care. Code 97002 is intended to describe a reevaluation provided on subsequent date(s) of service. Reevaluations can be performed on more than one date of service during the episode of care; however, typically reevaluations should not be billed on each date of service. The intent of a reevaluation is to assess progress and modify or redirect future interventions. The following clinical examples will aid in understanding the intent of code 97001, Physical therapy evaluation, and 97002, Physical therapy re-evaluation. Clinical Example for CPT Code 97001.

This is the initial visit with a 56-year-old female who has a medical diagnosis of right shoulder adhesive capsulitis. She is right handed. The patient presents with pain in the right shoulder at rest and during attempted motion. There are limitations in range of motion causing the inability to use the arm for the majority of her activities at work and home. Her medical history is significant for hypertension. She has had shoulder complaints for less than one month. The examination includes but is not limited to range of motion examination; joint integrity and mobility examination; muscle performance examination (in-cluding strength, power, and endurance) left as compared to right; respiration, heart rate, blood pressure assessment; consideration of environmental barriers at home and work.

Pre-service work includes coordination or discussion with other team members and review of any medical records including, but not limited to, pertinent imaging or operative reports.

Intra-service work includes examining the patient, obtaining a patient history, performing relevant systems reviews, and using data collection methods to elicit additional objective information; evaluation of the patient based on data gathered from the examination; organizing and interpreting the data to establish a diagnosis and/or obtaining such additional information as may be necessary; development of a plan of care including prognosis for functional improvement and selection of interventions to produce improvement in the patient’s condition; education and instruction regarding the cause, prognosis, and plan of care for the patient’s condition, which may include prevention and health promotion information.

Post-service work includes documenting the evaluation process (see intra-service work) and the results of the evaluation, as well as communicating with the family and/or caregiver relative to the patient’s care and home program.

Codes 97001 and 97002 vs 97750

Physical therapy evaluation (97001) and re-evaluation (97002) are codes for comprehensive review of the patient including, but not limited to, history, systems review, current clinical findings, establishment of a physical therapy diagnosis, estimation of the prognosis, and determination and/or revision of future course of treatment. Code 97001 is performed at the start of an episode of care and 97002 is performed intermittently after care has begun to assess the medical necessity of continued care. Physical performance test or measurement (97750) is intended to focus on patient performance of a specific activity or group of activities. For example, a functional capacity test used to evaluate a person’s potential to return to work after an injury is an example of a procedure that would be coded with 97750.

How to Code

Code 97001, Physical therapy evaluation, would be reported for the comprehensive evaluation performed at the first visit. This code is not a time-based code and should be reported once per episode, regardless of how many body parts are involved.

Medicare states in Benefit Policy 100-02 Chapter 15 section 220:

"EVALUATION is a separately payable comprehensive service provided by a clinician, as defined above, that requires professional skills to make clinical judgments about conditions for which services are indicated based on objective measurements and subjective evaluations of patient performance and functional abilities. Evaluation is warranted e.g., for a new diagnosis or when a condition is treated in a new setting. These evaluative judgments are essential to development of the plan of care, including goals and the selection of interventions."

Noridian – Initial Evaluations – (i.e., CPT ® 97001, 97003)

Providers may simultaneously receive multiple physician referrals for multiple medical conditions for one patient. When this occurs, it is expected that one qualified clinician from each appropriate discipline i.e., physical therapist (PT), and/or occupational therapist (OT), and/or SLP, will complete a thorough initial evaluation that encompasses each of the identified medical conditions. Following completion of the initial evaluation, other staff therapists specializing in specific medical conditions may treat the patient as needed. When medical necessity is supported, an initial evaluation is appropriate for:

• A new patient who has not received prior therapy services.
• A patient who has returned for additional therapy after having been discharged from prior therapy services for the same or for a different condition. Time spent evaluating this returning patient should not be coded as a re-evaluation. Prior discharge may have been due to one of the following:
  • Patient no longer significantly benefitted from ongoing therapy services or;
  • Patient no longer required therapy services for an extended period of time or;
  • Patient experienced a significant change in medical status that necessitated discharge.

  For additional information, see the Noridian article titled Therapy Services and Medical Necessity.

• A patient who is currently receiving therapy services and develops a newly diagnosed unrelated condition. Example: A patient is currently receiving treatment following a total knee arthroplasty (TKA). During the therapy episode of care for the TKA, the patient develops an acute rotator cuff injury from an accident at home. The clinician determines that the rotator cuff injury is not related to the TKA. Therefore, it is reasonable for the clinician to provide and code for a new evaluation of the rotator cuff injury since it is a newly identified diagnosis for an unrelated condition.

Re-Evaluations – (i.e., CPT ® 97002, 97004)

Routine re-evaluations of expected progression in accordance with the plan of care, either during the episode of care or upon discharge, are not considered to be medically necessary separately billable services. When medical necessity is supported, a re-evaluation is appropriate for:

• A patient who is currently receiving therapy services and develops a newly diagnosed related condition e.g., a patient that is currently receiving therapy treatment for TKA. During the episode of care, the patient develops wrist pain. The clinician determines that the wrist pain is due to use of a walker which the patient is using as a result of the TKA. In this scenario, the wrist pain is a condition that is related to the TKA. Therefore, it is reasonable for the clinician to provide a re-evaluation of the patient due to this related condition.
• A patient who is currently receiving therapy services and demonstrates a significant improvement, decline, or change in condition or functional status which was not anticipated in the plan of care and necessitates additional evaluative services to maximize the patient’s rehabilitation potential.

Margie Scalley Vaught, CPC, CPC-H, CPC-I, CCS-P, MCS-P, ACS-EM, ACS-OR

Our office purchased DME equipment such as braces and crutches and supplied them to our Medicare patients. Can our doctor who also owns the practice receive a percentage of the reimbursement from Medicare as part of the company’s remuneration?

If the doctor does not own any part of the DME company from which they purchased the DME equipment, then Medicare does not allow for a percentage of the billed cost of the DME to go to the doctor. They have a certain amount they will allow you to charge the patient and they pay a portion of that allowed amount. They are very strict as to what they may consider a kick-back.

Information provided by :

Can we locate ancillary physical therapy off-site?

Yes, an orthopaedic group can own and operate a physical therapy practice at any one or more locations with or without group physicians on-site. To satisfy Stark and Medicare requirements, the group must have exclusive 24/7 use of the therapy space (either through ownership or a lease) and Medicare claims need to be submitted under the provider numbers of the therapists under the physician group number (in the same manner as physician claims are submitted to Medicare), rather than under Medicare’s incident to rules.

Cary B. Edgar, JD

Can we accept physical therapy referrals from outside physicians?

Yes, an orthopaedic surgery group can accept physical therapy referrals from outside physicians. This includes outside referrals of Medicare patients as long as the Medicare claims are being submitted under the provider numbers of the therapists enrolled under the physician group number.

Cary B. Edgar, JD

Can physicians (not within the same group practice) set up a partnership to own and operate a PT clinic? Could the physicians post notices of “ownership interest” and disclose to patients (like an ASC) and be compliant with Stark Laws?

The only way that physicians from more than one group practice can jointly own and operate a PT clinic (or any other designated health service) in compliance with the Stark rules is if all of the physician partners practiced at the same street address as the PT clinic.

In contrast, ASCs can have physicians from multiple groups partner together because ASCs are not subject to Stark (just anti-kickback).

Cary B. Edgar, JD