Introduction
Pulmonary and respiratory therapy play a crucial role in helping patients with breathing difficulties manage their conditions effectively. Whether it’s treating chronic obstructive pulmonary disease (COPD), asthma, or pulmonary hypertension therapy, these services improve patients’ quality of life and can even be life-saving. However, for healthcare providers, ensuring accurate billing for these services is just as important as delivering high-quality care.
Incorrect billing can lead to claim denials, delayed payments, and financial instability for healthcare practices. Providers must navigate complex billing requirements while ensuring compliance with payer guidelines. In this blog, we’ll discuss the top five billing issues in pulmonary therapy and respiratory therapy programs and offer practical solutions to help providers maximize reimbursements and reduce claim denials.
1. Incorrect Use of CPT Codes for Respiratory Therapy Services
Problem:
One of the most common billing issues in pulmonary and respiratory therapy is incorrect use of Current Procedural Terminology (CPT) codes. Billing staff often struggle with:
- Differentiating between various respiratory therapy services such as pulmonary function tests (PFTs), nebulizer treatments, and oxygen therapy.
- Accidentally upcoding or undercoding services, which can lead to compliance issues and claim denials.
- Keeping up with frequent updates to CPT codes and payer policies.
Solution:
- Ensure regular training for billing staff on the latest CPT coding changes in pulmonary therapy services.
- Use Electronic Health Records (EHR) with coding validation features to minimize human error.
- Conduct periodic audits to ensure that coding is accurate and up to date.
- Subscribe to CMS updates and payer newsletters to stay informed about coding changes.
By implementing these solutions, healthcare providers can reduce coding errors and improve claim approval rates.
Additionally, understanding the nuances of coding for different respiratory conditions can help prevent unnecessary denials. For instance, pulmonary rehabilitation services require specific CPT codes that differ from those used for diagnostic testing. Regular training sessions and updated coding manuals can go a long way in ensuring that every service is billed correctly.
Real-World Example:
A pulmonary clinic in Texas faced repeated claim denials for their spirometry services. Upon review, they discovered their coding staff was using an outdated CPT code that had been replaced the previous year. After implementing monthly coding updates and using an automated verification system, they saw a 40% reduction in claim rejections within six months.
Also Read: A Complete Guide to CPT Codes for Physical Therapy Billing in 2025
2. Medical Necessity Denials
Problem:
Many claims for pulmonary therapy and respiratory therapy programs get denied due to a lack of medical necessity documentation. Payers require detailed justification for services provided, and missing or vague documentation can lead to:
- Denied claims, resulting in lost revenue.
- Increased administrative work in appealing rejections.
- Delays in patient care due to authorization issues.
Solution:
- Improve documentation practices: Ensure that physicians clearly document the clinical justification for each service.
- Use standardized templates: Templates should highlight symptoms, diagnosis, treatment rationale, and medical necessity.
- Verify payer-specific policies: Different insurance providers have varying medical necessity criteria. Checking policies beforehand can prevent denials.
- Appeal denied claims: If a claim is denied, submit a well-documented appeal with comprehensive medical records.
Accurate documentation not only helps in claim approvals but also improves overall patient care management. Physicians should be encouraged to include thorough notes that provide a clear medical rationale for the services rendered. In some cases, attaching supporting test results or prior treatment history can strengthen the claim and reduce the likelihood of denials.
Case Study:
A respiratory therapy provider in Florida struggled with frequent medical necessity denials for their home oxygen therapy claims. After reviewing their documentation, they found that patient progress notes lacked specific details on oxygen saturation levels and necessity criteria. By incorporating a standardized documentation process and requiring therapists to document all medical criteria explicitly, they saw a 50% reduction in claim denials.
3. Errors in Billing for Pulmonary Function Testing (PFT)
Problem:
Pulmonary function testing (PFT) is a critical diagnostic tool in pulmonary therapy, but billing for it comes with several challenges:
- Incorrect use of CPT codes, leading to claim rejections.
- Unbundling services that should be billed together, resulting in overbilling.
- Failure to differentiate between diagnostic and therapeutic PFT procedures.
Solution:
- Educate billing staff on proper CPT codes for PFTs, including bundling rules.
- Use automated coding tools that flag potential errors before claims are submitted.
- Review each claim before submission to ensure compliance with CMS and insurance carrier guidelines.
- Stay updated on policy changes to avoid using outdated codes or billing practices.
By taking these steps, providers can ensure smoother reimbursement processes and fewer claim rejections.
Example:
A hospital in California frequently received claim denials due to coding errors on PFT claims. A thorough audit revealed that their billing department was incorrectly unbundling certain PFT procedures. After retraining staff on proper bundling practices and implementing software to flag unbundling mistakes, their PFT billing accuracy improved significantly, leading to a 30% increase in successful claims.
Also Read: A Complete Guide to Pulmonary Therapy Billing: Codes, Challenges & Solutions
4. Inconsistent Documentation for Ventilator Management & Oxygen Therapy
Problem:
Poor documentation for ventilator management and oxygen therapy can lead to billing complications, including:
- Missing progress notes and physician orders, leading to denials.
- Insufficient documentation regarding the necessity and duration of treatment.
- Discrepancies in reporting home vs. in-clinic oxygen therapy services.
Solution:
- Train respiratory therapists and physicians on proper documentation standards.
- Standardize documentation templates to ensure all required details are captured.
- Conduct regular medical record reviews before claims submission to verify completeness.
- Differentiate between home and facility-based services to comply with payer rules.
Ensuring consistent and accurate documentation reduces the risk of denials and improves reimbursement rates.
Real-World Impact:
A clinic in New York improved its ventilator management billing accuracy by implementing mandatory physician sign-offs on all therapy progress reports. This simple change reduced their denials by 45% over six months.
5. Challenges with Insurance Authorization & Coverage Limitations
Problem:
Insurance-related challenges can cause significant billing issues in pulmonary hypertension therapy and other respiratory treatments. Common problems include:
- Delays in obtaining prior authorizations for specialized treatments.
- Unclear insurance coverage for pulmonary and respiratory therapy programs.
- Frequent claim rejections due to missing or incorrect authorization details.
Solution:
- Establish a proactive prior authorization process to prevent treatment delays.
- Maintain a database of payer requirements for respiratory therapy services.
- Train staff to navigate insurance pre-approval processes efficiently.
- Use automated tracking tools to monitor authorization status and follow up on pending approvals.
Taking these proactive measures can significantly improve billing efficiency and reduce claim denials.
Conclusion
Billing issues in pulmonary therapy and respiratory therapy programs can create major financial challenges for healthcare providers. The top five issues discussed in this blog incorrect CPT codes, medical necessity denials, errors in pulmonary function test billing, inconsistent documentation, and insurance authorization challenges — all contribute to delayed payments and revenue loss.
By implementing these solutions, healthcare providers can streamline billing processes, reduce claim denials, and ensure financial stability. If managing billing in-house becomes overwhelming, partnering with specialized medical billing services can be an excellent way to improve efficiency and maximize reimbursements.
