The laws and regulations around compliance, while challenging to deal with at times, are designed to ensure thorough and high quality care for patients as well as encourage communication between clinicians. The goal for this post (and our new PT Practice Intel product) is to help you understand the myriad ways compliance extends beyond the legal bounds and make adhering to compliance guidelines as easy and beneficial for your physical therapy practice as possible! 

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On a basic level, most physical therapy clinic owners, staff, and therapists understand why compliance is important - because it is a legal issue! Maintaining a legally abiding practice is of the utmost importance to avoid lawsuits, expensive audits, and even being forced to close your doors. However, what most physical therapy clinic owners do not truly grasp is that compliance benefits extend beyond HIPAA and into employee engagement, patient outcomes, and the financial health of your practice! Let’s take a look at all the reasons why you should really care about compliance. 




The reigning regulations that dictate compliance are HIPAA and HITECH as they require security of protected health information. Specifically, HIPAA was designed to protect a patient’s sensitive health information from being disclosed without their consent. Under this law, any healthcare entity must have documented policies and procedures for how your practice handles PHI and these policies and procedures must be outlined, accessible, understood and implemented by clinicians and staff.


The HITECH Act was signed into law for two major reasons. The first being to tighten up some loopholes of HIPAA and the second to encourage the adoption of health information technology (specifically EMRs) to improve security protections of patient health information. While healthcare workers have A LOT of opinions on the HITECH Act and EMRs, that’s a conversation for another day. What is important to note is that both HIPAA and HITECH are laws and if a patient feels their rights have been violated or a practice is found to be noncompliant, they could face a lawsuit or hefty fine. 


In addition to the two biggies, HIPAA and HITECH, there are other laws and regulations you should be aware of as a business owner. Make yourself familiar with The Fair Labor Standards Act, the Civil Rights Act, the Age Discrimination in Employment Act, and Americans with Disabilities Act. All of these laws determine how you hire, employ, provide benefits, and pay your employees and should be considered a vital part of remaining compliant.




While a huge component of compliance is legal, it is also a fantastic way to maintain high standards for your employees. Documentation plays an extremely important role in a physical therapy practice, and ensuring compliant documentation is a must. As a bonus, when therapists are trained to write high quality documentation, they become more efficient and effective in writing those notes. 


Many clinic owners and therapists are shocked to learn that over-documenting is actually quite a big issue in the physical therapy industry. Therapists often intuitively feel the more information they put in a note the better, when in reality this is simply not true. In fact, by including too much information in the patient chart, therapists can inadvertently negatively impact the justification for continued skilled care. A note should be concise and address functional deficits (those that are a medical necessity), while over-documenting typically targets minimally skilled or redundant information. Additionally, having too much information in the patient chart creates many more opportunities for error and makes a note less compliant. The bonus is when therapists are able to consistently write compliant, succinct documentation, they spend much less time on their documentation. This time can easily be spent seeing additional patients or to improve quality of life and job satisfaction. 


Clinical Practices and Patient Care


Compliant documentation is vital for both legal reasons and time savings. It can also serve to provide incredible insight into how a therapist is treating a patient over an episode of care and patient outcomes. Understanding variability of care amongst therapists allows for an in depth look into why patients are or are not completing an episode of care, whether they are improving or declining, and how well a plan of care is being followed. Having compliant documentation makes for the most accurate data to track these trends and provide massive learning opportunities for therapists where they may be struggling to prove value to patients. Ultimately, these learnings lead to better patient care, outcomes, and retention.


Financial Health


Finally, as a clinic owner, you should care about compliance because it can impact your bottom line. As discussed in the first section regarding legal matters, the cost of being noncompliant far exceeds the cost of remaining compliant. Aside from lawsuits and fines for non adherence to rules and regulations, lengthy audits that unearth poor compliance are very expensive and time consuming (and your staff’s time is worth money!). 


On the flip side, remaining compliant carries a small cost, but it certainly saves a lot of time, energy, and money. In addition, having high quality, compliant documentation at your clinic can actually help increase revenue. Documentation holds the key to how your practice can code and therefore bill. Understanding where therapists are inaccurately coding and under-billing gives you the chance to explain the nuances to your therapists and dramatically improve reimbursements. 


Three Cheers for Compliance!

As a physical therapy practice operator, you should now really care about compliance! While maintaining processes and gathering all the information needed to let compliance work for you rather than against you sounds like a lot, PredictionHealth can help. The PT Practice Intel solution uses AI to analyze every word in every sentence across 100% of therapists’ notes to generate dashboards and reports from structured and unstructured data. Ensure compliance, drive revenue, and improve clinical practices - now that’s a compliance win!

Topics: Physical Therapists, Compliance

Keenan Hartman

Keenan Hartman

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