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Violation of No-Fault Fee Schedules - Provider Billing in Excess of Fee Schedules

By: Steven Veroxie, Owner of PhysioBilling, LLC

Physical Therapy No-Fault Billing Dilemma



If your practice treats even a few No-Fault patients you could be in violation of billing in excess. Most outpatient physical therapy clinics have seen their share of post-operative patients as a result of a motor vehicle accident. One of the Suffolk County clinics that we work with shared a concerning letter related to a post-op No-Fault patient. The letter was issued by the New York State Department of Financial Services. The practice and insurance company info was removed from this article to protect both parties. Here is an actual excerpt from the letter:


‘The New York State Department of Financial Services (Department) was notified by the Insurance Company of repeated instances in which you billed in excess of the applicable No-fault fee schedule for services rendered to patients covered under No-fault. Enclosed is a representative sample of bills submitted by your company to an insurance company for reimbursement for services rendered to patients covered under No-fault. A review of the bills confirmed that the services were billed in excess of the allowable fees contained in the applicable fee schedule.


Section 5108(a) of the New York Insurance Law states that charges for any professional health services which are incurred as a result of injuries sustained in an automobile accident shall not exceed the charges permissible under the schedules prepared and established by the Chairman of the Workers' Compensation Board or other applicable No-fault fee schedules for use with the New York No-fault program. Also, no provider of health services may demand or request any payment in addition to the charges authorized in the fee schedules. In addition, Section 5108(c) of the Insurance Law states, "Every insurer shall report to the commissioner of health any patterns of overcharging, excessive treatment or other improper actions by a health provider ..."


Kindly review the billing procedures for your office to assure that they are in conformity with fee schedule parameters and in compliance with the New York Insurance Law. Please outline the steps that will be taken by your office to review your outstanding files to assure that the applicable fee schedule rates are consistently and correctly being applied to patients covered under No-fault. In addition, please advise us of the action that will be taken by your office to refund any money that was paid to you by injured parties and /or insurers in excess of fee schedule maximums.’


The patient was being seen following a rotator cuff repair. As the patient progressed through his treatment, the treating physical therapist added to the treatment program. More challenging and functional based exercises were introduced and joint mobilization was performed on a regular basis to restore full range of motion.


 As the treatment progressed so did the therapist’s billing. 2 units of therapeutic exercise (97110), 1 unit of manual therapy (97140), 1 unit of neuromuscular re-education. The PT was simply billing to accurately reflect the treatment provided. Not knowing that this billing practice would red flag his clinic for an excessive billing violation.


The practice had to respond to the notice in writing. Describing in detail how the clinicians and billing staff would conform their billing procedures to be in compliance with New York State Insurance Law. The clinic's director conducted hours of training for the entire practice. Luckily, the No-Fault insurance company did not take action requesting payment be returned.


Need help with your no-fault or workers' comp billing or collection issues? Contact us immediately! 


(516) 780-0132

Percentage-Based Medical Billing Contracts Violate New York State Fee-Splitting Laws

By: Steven Veroxie, Owner of PhysioBilling, LLC

A percentage-based contract with your current medical billing company violates New York’s anti-kickback law which restricts licensed professionals (including physical therapists) from

“directly or indirectly requested, received or participated in the division, transference, assignment, rebate, splitting, or refunding of a fee for, or has directly requested, received or profited by means of a credit or other valuable consideration as a commission, discount or gratuity, in connection with the furnishing of professional care or service…” New York Education Law  Sec. 6531 Additional Definition of Professional Misconduct, Limited Application

Unfortunately, two NY state entities recognize this regulation. Not only does this violate New York State Health Law, but it is also cited in the NY Office of Professions Rules of the Board of Regents/Part 29

“permitting any person to share in the fees for professional services, other than a partner, employee, associate in a professional firm or corporation, professional subcontractor or consultant authorized to practice the same profession, or a legally authorized trainee practicing under the supervision of a licensed practitioner. This prohibition shall include any arrangement or agreement whereby the amount received in payment for furnishing space, facilities, equipment or personnel services used by a professional licensee constitutes a percentage of, or is otherwise dependent upon, the income or receipts of the licensee from such practice, except as otherwise provided by law with respect to a facility licensed pursuant to Article 28 of the Public Health Law or Article 13 of the Mental Hygiene Law;”

Having to be mindful of two professional bodies. What does a violation mean for you and your practice? A guilty dental practice had to pay $450,000 as a civil penalty. After dealing with this judgment. A defense of the dentist’s professional license began with the NY Office of Professions. I optimistically doubt that a physical therapy practice would be slapped with the same six-figure penalty, but I don’t think you would like your clinic to set the legal precedent. 


This regulation is stating that a percentage-based billing contract could incentivize a medical billing company to over-bill or go above and beyond standard billing practices in order to increase their own profit.

I have over 13 years’ experience in the outpatient physical therapy world. Most Physical Therapy Clinic Owners that I have come into contact with have no idea about this New York exclusive law. No other state with the exception of California presents with such a statute. 1 out of 5 medical billing companies that I have mentioned this law to was completely unaware and offered no reasonable legal solution. Huge out-of-state billing companies don’t seem to be up to date on New York State law. Your practice could pay for their negligence.


How to legally contract a medical billing company for your PT Clinic?

If you are still paying a percentage for billing services. STOP! Call your medical billing company immediately and inform them of this law.

To be in compliance with New York State law. PhysioBilling offers a simple, legal solution. We charge a low hourly rate for all billing and collection services. This payment arrangement is according to the fair market value for services rendered and usually lower than your current billing company’s contracted rate.

Please see the links below for more information concerning this New York State Health Law.

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