PT Classroom - Physical Therapy Private Practice Tips - Red Flag Rules ׀ by Chad Novasic, PT


Chad Novasic is the President and CEO of Alliant Physical Therapy Group. He is a 1988 graduate of Marquette University. His focus has been in the field of outpatient orthopedic rehabilitation and injury prevention. Chad has been an independent Physical Therapist since 1989. He is proud to be active in the community having served as President of the Wisconsin Independent Physical Therapists, and on the Board of the Racine Founders Rotary and the Wisconsin Physical Therapy Association. Over the years, Chad's passion for physical therapy and helping others has complimented his capacity to help fellow physical therapists open and run successful private physical therapy practices. He can be reached at, or through the Alliant Physical Therapy Group Website.

Private Practice Physical Therapy Tips - Red Flag Rules

Effective November 1, 2009 the new Red Flag Rules will require compliance from health care providers. Were you aware of this? Do you know what “Red Flag Rules” are? How will it effect you?


The Federal government has been working hard to protect the identities of individuals in the banking and financial world. One of the key component is giving increased regulation to the identification process to financial institutions. In other words financial institutions all need to have proof that you are who you say you are. These regulations extend to any business that extends credit. Most private practice Physical Therapists bill insurance companies, and therefore we do extend credit to our patients, and we are also required to follow the “Red Flag Rules”. I want to tell you that this is very important! There are fines and HIPPA consequences if we do not implement policies immediately.

What do you need to do? Well the first thing is do not panic. The nuts and bolts of these rules as applied to health care providers is relatively simple. You need to have a policy in place for identifying your patients. You need to get a photo ID or two other forms of identification. A copy of this photo ID should be kept in the patients chart. In other words, you need to make sure that your patients are who they claim to be. A sample policy is available from the American Medical Association Website.

Why do we need to care? I can share a story of a friend of mine who lives in the Villages in Florida. Recently she received a notice from Medicare indicating that she had a total knee replacement in Miami. She has never been in Miami nor did she have a total knee replacement. Yet she had several thousand dollars of medical bills that included Physical Therapy. Upon further investigation, it was found that someone at her primary care physicians office copied her Medicare card and billing information. This information was used for someone else and services were rendered under false information. There was never a question about the false patients true identity, and the fraudulent activity occurred.

As private practitioners it is our responsibility and obligation to protect the identity of our patients. Furthermore, it is in your best interest to make sure that the person who you bill, is who they say they are. Therefore be prepared. Generate the policy, and adhere to it!


Other Private Physical Therapy Practice related articles by Chad
- Starting a Private Physical Therapy Practice
- Basic Equipment for Starting a Private Physical Therapy Practice


Last revised: August 10, 2009
by Chad Novasic, PT

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