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In a changing healthcare environment, physical therapists and physical therapist assistants need to be paid for services rendered. Therapists cannot afford third-party payer denial for services they provide. This textbook will help lay the foundation on what, how, and why to document. Clinical decision-making, evidence-based practice, legal issues, coding, and utilization review are just a few of the content areas covered.

Frequently asked Medicare billing and coding questions:

1. Are Medicaid managed care organizations (MCOs) mandated by CMS to follow Medicare billing guidelines?

A: No. MCOs must provide all benefits offered under the state plan, but can provide benefits additional to traditional Medicaid fee-for-service (FFS). MCOs are not mandated by the federal government (Centers for Medicare & Medicaid Services [CMS]) to follow federal Medicare billing and treatment guidelines, unless there is a state statute or regulation that mandates Medicaid MCOs in that state to follow Medicare guidelines. It is recommended that providers review their individual Medicaid MCO contractual agreements and meet with their prospective (and current) carriers to determine the details of the applicable billing and treatment polices applicable to physical therapist services.

2. Can the physical therapist assistant complete the Medicare progress report?

A: No. The physical therapist must write the entire progress report, but can use the information that was gathered by the physical therapist assistant and is in the physical therapist assistant’s note. See Medicare Benefit Policy Manual Chapter 15, Section 220.3.

3. Can I bill a re-evaluation (CPT 97164) every time a progress report is completed (at a minimum, every 10th treatment visit per Medicare coverage guidelines)?

A: No. Continuous assessment of the patient’s progress is a component of ongoing therapy services—it is not payable as a re-evaluation. Actual re-evaluations, however, are another matter—they are separately payable and should be conducted when indicated during an episode of care when the professional assessment of a physical therapist indicates significant improvement, decline, or change in the patient’s condition or functional status that was not anticipated in the plan of care. Remember: A re-evaluation is not a routine, recurring service, but is focused on evaluating progress toward current goals, making a professional judgment about continued care, and modifying goals and/or treatment or terminating services. A formal re-evaluation is covered only if the documentation supports the need for further tests and measurements after the initial evaluation. According to CMS, indications for a re-evaluation include new clinical findings, a significant change in the patient’s condition, or the patient’s failure to respond to the therapeutic interventions outlined in the plan of care. Although some state regulations and state practice acts require re-evaluation at specific times, re-evaluations for Medicare beneficiaries also must meet Medicare coverage guidelines. The decision to provide a re-evaluation must be made by the physical therapist.

4. Is direct care (1:1 rule) a Medicare rule?

A: No. In fact, the language supporting the idea of “direct patient contact” appears in the American Medical Association’s Current Procedural Terminology (CPT) book, in a section that accompanies the therapeutic procedure codes requiring that the “physician or qualified healthcare professional have direct (one-on-one) patient contact.” The language is part of a resource aimed at providing a uniform language that will accurately describe medical, surgical, and diagnostic services—but it is not generated by CMS.

5. Do I have to discharge patients from physical therapy when they reach the Medicare payment outpatient therapy threshold or targeted medical review threshold?

A: As long as skilled physical therapy continues to be medically necessary, you should not discharge Medicare patients when they reach the outpatient therapy threshold or the targeted medical review threshold. What used to be the Medicare therapy caps now are annual thresholds that you can exceed when you append claims with the KX modifier for medically necessary services. This change from the earlier “hard” therapy caps is the result of the Bipartisan Budget Act of 2018 (BBA of 2018), which provides for Medicare payment for outpatient therapy services, including physical therapy, speech-language pathology, and occupational therapy services. If services exceed the annual threshold amounts, include the KX modifier as confirmation that services are medically necessary, as justified by appropriate documentation in the medical record. If you furnish medically necessary services over the targeted medical review threshold of $3,000, continue to affix the KX modifier and maintain the documentation to justify it. This medical review focuses on categories of providers deemed at higher risk for rejected claims.

Common reasons for denials by third-party payers include:

Technical errors such as:

  • Identifier omission

  • Incorrect form use

  • Incorrect or inadequate information

  • Missing physician’s/nonphysician practitioner’s (NPP’s) signature and date of certification of the plan of care or progress note indicating the physician/NPP reviewed and approved the plan of care

Nontechnical errors such as:

  • The medical documentation submitted did not show that the therapy services were reasonable and necessary and at a level of complexity that requires the skills of a therapist

    • Lack of detail for the level of severity

    • Illegibility

    • Good documentation in wrong place

    • Bad documentation anyplace

    • Billing information does not match documentation of care

    • Goals do not match problems or diagnosis

    • Outcomes or effectiveness of therapy services for patient’s illness or injury (i.e., goals not achieved) are not documented

    • Patient achieved their restorative potential and was provided repetitive, nonskilled exercises

    • Documentation does not establish thorough objective measurements that the patient is making progress toward goals

    • Loss of function or functional limitation was not identified (problems were physiologically impairment based)

    • Potential for significant improvement not identified (goals were not significant enough to justify care, or patient was too high level or too low level)

    • Need for skilled therapist not identified (improvement would have been made without therapeutic intervention)

    • Skills of therapist are not required to actually carry out the maintenance program

    • Critical thinking not supported by evidence-based care

Incorporating all the general principles for documentation and health information management should help the therapist maintain records appropriately, organize the record, record appropriate information, and receive payment based on the documentation content. The therapist should seek to write only what is relevant and necessary and in an objective manner, using verbiage that indicates skill, but is universally understood based on all purposes of the medical record. By appreciating why payment for therapy services is denied, the therapist can reflect on documentation content guidelines and the importance of content adherence.

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